Television ads used to be the big leagues for games, the place where the top-selling (or those that aspired to be top-selling) games would go to find a massive audience. Primarily, we’d see ads for console and PC games. Then, as Facebook became the platform for massive growth in games, TV ads for social games became popular. Once mobile games became the high-growth segment of the games industry, TV ads for games shrank.
Now television advertising for games is on the rise in a big way, according to iSpot.tv. Its report on 2015 showed enormous growth: “Ad dollars spent on TV by the video game sector increased 47 percent last year vs. 2014,” the report states. “During 2015, 65 brands placed 406 different spots on US national television just over a quarter million times, adding up to an estimated media value of $629.2 million. That’s up significantly from 2014 when 52 brands ran 298 different spots, spending an estimated $427.4 million to air them 154,500 times.”
The investment in television advertising isn’t trivial for publishers. The biggest brands spent heavily to get good exposure. “Supercell, for instance, spent heavily on Clash of the Clans,” noted the iSpot.tv report. “It was the only game maker to hit the $3 million mark in estimated media value on a single day for its TV ad placements, in fact, it did that multiple times (during the Super Bowl and the NBA Finals). The company ran 29 unique commercials throughout the year with a cumulative estimated media value of $59.8 million.”
More than half of television advertising for games occurs in the last four months of the year, according to iSpot.tv. This year looks to be no exception, as the summer months see a slowdown in ads. July had only $23.4 million in advertising, led by Machine Zone, with King in second and PlayStation in third place. We’ll see a boom for the holidays, not only with important console software launches, but with console hardware new arrivals and the potential for VR hardware advertising as well.
Why the surge in TV ads for mobile games? The answer is simple: It works, and it’s more cost-effective for the right product than install ads, especially for reaching the right demographic. A What’s App’ning study examined TV spending and app traffic for 60 mobile apps across ten categories including games, between October 2014 and December 2015, using comScore, Nielsen and Think Gaming data. “Fully 77 percent showed a direct correlation between TV spending and app traffic,” the study noted. “When TV ads ran, unique visitors went up 25 percent; when TV didn’t run, unique visitors dropped 20 percent.”
The study listed some specific examples, including how Pet Rescue Saga saw a 40 percent difference, averaging 2.5 million unique visitors when spending $1.1 million a month, but falling to 1.8 million unique visitors the months when ads didn’t run. Game of War, which typically spends $9 million/month on TV, saw its unique visitors fall 25 percent, from 2.5 million to 2 million, when TV ads didn’t run. Clash of Clans, which averaged $4.5 million per month in TV ads during that time, lost 17 percent of unique visitors when off-air, with the total falling from 11.9 million to 10.2 million visitors.
It was a cost-effective investment for these game publishers. “Brands’ estimated monthly revenues far exceed their TV investments,” the study noted. “For example, Clash of Clans averages $36 million in monthly sales vs. $4.5 million in TV spending; and Game of War averages $24.6 million in monthly sales for its $9.1 million in TV ads.”
The prime target of these TV ads for games are live sports, where the viewers aren’t likely to record the shows and skip over commercials and represent a great demographic for the right type of game. “For many of these raiding-strategy games, if you can target an audience that “delivers more men 18-34, 18-49 and 25-54 who are in upscale households ($100,000+) than any other cable network,” according to a Prime Media Productions report discussing ESPN and a mostly male and the hard-to-reach 18-49 demographic. “Well why not go after them?” said Carter Dotson in a TouchArcade article about TV ads for mobile games. Dotson also points out that ESPN is losing viewers so that venue may be losing some of its appeal to game advertisers.
Damon Danieli of Appuri believes that we’ll see even more TV advertising for games, as publishers figure out ways to track the performance of their TV ad spend versus app installs. “Top-tier mobile gaming companies have a User Acquisition (UA) team responsible for managing their Cost Per Install (CPI) campaigns . . . These companies are becoming hyper-local and temporal in their segmentation criteria in order to see lift from campaigns shown in regions and different times. Statistical rigor is applied to see if there are significant lifts in the organic traffic or if it is just noise,” Danieli wrote.
“Companies are building very sophisticated systems for combining all sources of user acquisition, temporal data such as media campaigns running, properties of their player and in-game behavior,” Danieli continued. “Appuri helps these companies by providing the post user acquisition data platform, churn prediction and retention management. From this platform, they can determine the per-unit cost, retention and LTV while campaigns are running and bring up or tear down those sources to maximize revenue. Adding this to their own inventory management system for serving up ads from non-competitive games gives these companies the ability to effectively arbitrage their user acquisition cost.” This accounts for the way sophisticated publishers like Machine Zone, King, and Supercell continue to increase their TV ad spend because they have the data to show that it works.
