In-Game Advertising: Are We Doing it Right?

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Looking at the current status of the in-game advertising industry makes us question – are we doing it right?

The mobile gaming industry is rapidly attracting a good number of business sectors who want to monetize by reaching a dedicated audience. Before entering the new decade, the gaming industry in APAC is expected to generate more than US$72 billion, amounting to 47% of the global gaming revenue. And much of it is due to mobile games. Mobile games can bring close to US$68 billion in revenue, and yet, it remains the most underused ad medium, with organizations spending a meager 7% of their total mobile ad spending. If you look at it, we aren’t making much use of in-game advertising opportunities.

It is surprising how some brands still look at in-game mobile ads as “unworthy” of their ad budget and focus on several other in-app advertising strategies instead. Let’s look at the possible misconceptions about in-game advertising and how to address them. Let’s dive in!

 

Reason #1: Mobile In-Game Advertising Is Distracting for Users

In-game advertising, when done poorly, can indeed distract players, and this can lead to poor user experience, lousy gaming reviews, and reduced user engagement.

However, advertisers and publishers who can get in-game advertising right – meaning they can provide relevant and suitable content that amplifies user experience – can enjoy a win-win situation.

Once advertisers can closely work with publishers to create a high-quality in-game advertising campaign, this will minimize distraction and instead encourage interaction and improve user experience. The goal is always to choose quality over quantity.

If you look closely at the mobile game ad space, you’ll realize that they have tons of ad placement options – banners, interstitial, and native – that would help satisfy various objectives at different effective cost per miles (eCPMs). One effective way of doing targeted ads with maximum relevance is to do rewarded videos – awarding virtual goods or in-game currency can encourage gamers to watch videos in exchange for advancing in the game.

 

Reason #2: Mobile Games Are Bad for Brands

One of the reasons why brands fail to recognize the benefit of increasing their ad spend on mobile games is the perspective that mobile games do not reflect well on their brands. Of course, the need for brands to know who will see their ads and under what context is understandable. There have been instances where several social gaming platforms, such as those that allow user-generated content (UGC), have put brand integrity at risk. Hence, advertising platforms must work doubly hard to provide accurate user demographics and behavioral targeting functions. This way, it would be easier to understand what content will work best with the brands being promoted.

In the case of most mobile in-game advertising, its environment is highly controlled and utterly devoid of UGC, so brands no longer have to worry that their ads will be displayed together with inappropriate content that can harm their online reputation. In addition, working with reputable advertising platforms, like AlgoriX, that have several tools and filters in place to ensure brand safety can eliminate this risk.

 

Reason #3: In-Game Advertising Is Unwelcome

While advertising fatigue is real, mobile game advertising is an entirely different medium, and many mobile gamers understand that. This behavior is particularly true for free-to-play games. Many mobile players now prefer playing games that use the free-to-play model over pay-to-play games. They’d rather watch in-game advertising than pay for the games they download. In fact, a study showed that as much as 75% of gamers reported that they would instead continue playing the game and watch advertisements rather than upgrading to an ad-free version of the game.

These three reasons highlight that in-game advertising still has an opportunity to grow as both advertisers and publishers need to switch their mindsets. There needs to be more focus on developing sophisticated ad placements that seamlessly fit into gaming behavior.

Ready to benefit from in-game advertising? Don’t hesitate to connect with us.

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Pranav Kataria

Associate Director, Programmatic Strategy

As the Associate Director of Programmatic Strategy, Pranav brings over 8 years of experience in the adtech industry working with Publishers, DSPs, Agencies, and Advertisers from global regions to improve their monetization, performance, and strategies. With great understanding of the mobile market, his expertise lies in analytics, account management, strategy, and ad sales. With this refined skill set, he brings customer-centric mindfulness that enables growth and innovation.

Before joining AlgoriX, his keen business perspective and skills have earned him opportunities to work across different organizations and verticals in the advertising ecosystem; be it improving the processes, sales enablement, and managing client relationships.

Ray Xia

VP, AlgoriX Partner Studio

Ray Xia was a mainstay at Tencent Games, having worked at the company for 13 years. There, he took on various roles including backend developer, application development manager, and game producer. During this time, he actively participated in the development and operation of popular titles such as QQ Pet, QQ Pet Fight, and games involving the Naruto franchise. To date, these games have over 10 million daily active users. Through this rich well of experience he has accumulated covering all aspects of game development and operation, he aims to spearhead more creative endeavors via AlgoriX Studios.

Naomi Li

VP, Research and Development

Naomi Li has a decade’s worth of experience in research and development for the adtech industry. She started her career at Baidu where she was mainly responsible for the Automation Testing of the Baidu Fengchao Ad Search Engine. There, she focused on the fields of overlapping experiment infrastructure, rich media ads rendering, and ad antispam technology. Moreover, as part of Baidu’s International Group, she led the research and development of various monetization and advertising mechanisms for Baidu’s overseas app store, SDK, and AdNetwork. At present, she is responsible for the overall direction of AlgoriX’s R&D efforts, which include product planning, technical architecture design, and talent training.

Frederic Liow

SVP, Revenue Growth & Strategy

A veteran in the digital advertising industry, he began his career during the early days of the dotcom era. To date, his passion for the digital industry is still as strong as ever (and getting even stronger). Spanning twenty years of his digital career, he has worked for leading companies like Nielsen, MRM McCann, Omnicom Media Group, Millward Brown and Smaato. Currently, Frederic is the revenue officer for AlgoriX spearheading global revenue growth, business expansion and strategic partnerships. He has set up and built AlgoriX’s global mobile ad exchange, hiring talents, establishing best practices, and injecting global industry standards into the company. Prior to his current role, he was the Head of Demand for Smaato, overseeing the demand business and operations in APAC. Frederic is currently based in our Singapore HQ.

Xinxiao Guo

Chief Operation Officer

Equipped with a decade’s worth of experience in global product operation as well as a deep understanding of emerging markets, Xinxiao brings her expertise in mobile traffic monetization and programmatic advertising to the table. Before her role at AlgoriX, she was a core member of iQIYI’s research and development unit. After that, she moved to Baidu as Head of Programmatic Advertising.

At present, she is AlgoriX’s co-founder and Chief Operation Officer. Together with the team, she aims to help game developers effectively reach global audiences and implement better monetization strategies.

Ruiz Xie

Chief Executive Officer

With nearly 20 years of business experience, Ruiz Xie founded AlgoriX with the vision of creating a global advertising platform and entertainment ecosystem. Through AlgoriX’s services, he aims to create a more inclusive tech ecosystem by providing customized solutions that meet the needs of businesses at every stage. At the same time, through AlgoriX Studios and its third-party partner studios, the company is currently bringing to life a greater goal of providing a comprehensive entertainment platform for people worldwide, which covers games, IP, comics, movies, and more. At present, he leads nearly a hundred employees with concrete plans to expand the company by establishing more offices worldwide.

Before founding AlgoriX, Ruiz Xie joined CoreMail in 2002. There, he created the first Ajax version of the mailbox in China for NetEase, which was the largest Internet company in China at the time. After that, he joined Tencent in 2005 and contributed to the creation of Tencent Games while also building a large scale distributed storage system. In 2013, he moved to Baidu where he took part in developing Baidu International’s overall architecture and search advertising system. During his tenure, he was also the Chairman of the Baidu Global Technical Committee and Baidu’s chief architect.