Microsoft completed its largest ever acquisition of Activision Blizzard earlier this month. Buried under the lede is the fact that it now owns King, a hugely successful mobile advertising platform with over $300 million in advertising revenue annually. It’s not the first acquisition of its kind: Earlier this year, console gaming giant Sega purchased Rovio, the Swedish maker of “Angry Birds” for $776M. Now the pressure is on Sony’s gaming unit to pursue a similar vertical acquisition of a studio. Take-Two, the owner of Zynga, currently leads the speculative race. And with Google updating its publisher policy on in-app rewards on October 31, casual game developers are being welcomed, rather than maligned, as advertising supply partners.
In-Game Advertising Offers Reach And Addressability
As advertisers push into quickly maturing environments such as CTV, podcasts, and digital out-of-home, many find the same challenges from the early days of display advertising: poor viewability, low-quality traffic, and weak measurement signals. On the other hand, a casual mobile game offers first-screen engagement; interactive, skippable full-screen ads; and the addressability of a mobile app. It’s estimated that as much as 50% of the population is casually gaming daily, an overall reach that eclipses the most popular streaming services and podcasts.
Yet advertisers have been sleeping on this opportunity. What should they do now?
- Start gaming to familiarize themselves with the environment and placements. Pick a popular, ad-supported mobile game and hit “play” to get a sense of the mobile game development space, the types of ad units and experiences available, and the quality of advertisements being served today. The iOS and Android app stores offer a wide selection of free-to-play games, and Netflix and Apple now have their own gaming subscription services with exclusive, innovative titles that are not processor-intensive.
- Develop standards around in-game ad units. Not all mobile games, ad formats, and placements are suitable for all brands. Using the incentivized traffic framework that we recently published to document and enforce brand-specific standards helps advertisers translate existing ad standards around risk, viewability, and incentivization into policies that can be applied to in-game ad buys.
- Build rich creative with a native look and feel. With 15 seconds of unskippable, interactive, full-screen real estate at your disposal, how can your brand craft memorable, compelling ads to run in mobile games? Cut through the noise with creative that users can play through as a hypercasual game, and aim to align gameplay styles contextually. For example, serve a puzzle-based sponsored content experience to users in puzzle-based games.
As every major hyperscaler and even large publishers look to expand their footprint in the gaming industry, the sudden surfeit of opportunity creates a buyer’s market for in-game inventory. Early movers will benefit from relatively low CPMs in a market largely unsaturated with competitors. Moreover, as a US election cycle looms and global chaos persists, marketers will be left to navigate the minefield of brand safety. Games offer a welcome escape for users and ad buyers alike.