Despite the strong growth of mobile games, brands outside of the gaming industry have yet to take full advantage of the platform. There are multiple possibilities as to why, but analysts agree that brands are largely missing out on an opportunity to target a diverse and engaged audience.
According to data gathered by DeltaDNA, mobile gaming grew globally by about 19.3 percent to $46.1 billion, but brand spending in mobile games accounts for only 15 percent of total ad spend. DeltaDNA CEO Mark Robinson told AListDaily that the reason brand ad spending was low is because of an outdated view of mobile gaming demographics, which has changed significantly in recent years.
“In 2008, the year that the App Store launched for iOS, just 4 percent of the global mobile population downloaded games to their phone, and the bulk of mobile game development was dedicated to adventure and sports simulation. These are genres that broadly appeal to men aged 18 to 30,” explained Robinson. “Five years later, analysts were still extolling the virtues of in-game advertising as a way of reaching the young male demographic that represents the majority of mobile game users.”
Today, according to DeltaDNA’s findings, 62 percent of mobile gamers are female, with the majority over 25 years old, making games a prime platform for industries such as beauty or fashion. The typical mobile gamer of today is a professional woman around 35- to 44-years-old, but Robinson notes that audiences vary according to the types of games. Women tend to prefer casual and social casino games, while men lean more heavily towards action and strategy games.
Data analyst firm App Annie has similar findings. Its 2017 gaming report, which released in March, shows that games represent nearly 80 percent of total worldwide consumer spend across iOS and Android, and account for roughly 35 percent of worldwide downloads in 2017. According the App Annie, 25- to 44-year-olds made up 38 percent of US gaming demographic last year, with 37 percent older and 25 percent younger. US gamers age 45 and over spent around 37 percent of their total mobile time playing games, which is greater than in other countries the firm analyzed.
Although App Annie’s director of market insights Amir Ghodrati also notes that demographics change from game-to-game, he said that both men and women are taking to mobile games. He agrees that ad spending on mobile gaming is lower than what it should be, given the data, but he believes it has more to do with how brands need to learn the benefits of the gaming platform.
“It’s easy to do app-install type advertising, especially when it comes to gaming, where those companies tend to be ahead of the curve,” said Ghodrati. “You can have a specific call to action to install an app directly from an ad, and that’s something that’s easy to measure.”
With app-install ads, companies—usually games—can quickly see how many impressions an ad made, how many people downloaded the app, how many continued to play and which spent money. The direct link between these types of ads and revenue is easy to see, but the connection isn’t necessarily as direct when it comes to brand advertising.
“You have to do a lot more complicated research to measure what kind of impact advertising is having on your brand,” said Ghodrati. “But if you look at the total time spent in mobile versus other ways people consume advertising, the amount of money people are spending on mobile should still be a lot higher.”
“Mobile increased its share of global ad spend to 20.6 percent in 2017, showing massive growth year-on-year, and pushing itself into distant second behind TV at 36.5 percent,” Robinson added, stating that the shift does not reflect the importance of the gaming audience, as investments are still heavily focused on web, video and social media. “We have all these huge figures and yet there are still huge discrepancies between where users spend their time and advertisers spend their money.
DeltaDNA found that as of January this year, games accounted for a higher percentage of all active apps on Apple’s App Store than any other category, at 25 percent. Robinson also stated that 57 percent of all mobile app users are gamers and 86 percent of total smartphone time is spent in-app. But only 73.2 percent of mobile ad spend is dedicated to it, with the rest going to mobile web. Judging by its data, Robinson said that brand ad spend should be spread out with 83.72 percent going to gaming apps, 8.14 percent to social media, 4.65 to business apps and 3.49 to other types of apps.
However, Ghodrati said that in the US, only about 11 percent of people’s time is spent in gaming apps, with the remaining 89 percent spread out across other categories, with the top being communications at 21 percent of time, social with 22 percent and video players and editors comprising about 10 percent of time. While this indicates that there are more opportunities for brands to take advantage of, non-gaming apps still only represent 20 percent of global consumer spending on the app market. Games also have the added benefit of cycling at a faster rate in comparison to other apps, meaning that the time from download to spending tends to be much shorter.
Robinson also points to a study by Tapjoy, which reports that gamers tend to feel more engaged, focused and happy while playing. Comparatively, a 2017 report by the American Psychological Association (APA) shows that users tend to feel stressed when engaged with non-gaming apps such as social media.
Both analysts agree that rewarded video—ads that offer in-game currency or other benefits in exchange for viewing—is the ideal format for brands, since players opt-in to watching them.
A prime example of how effective rewarded videos can be, and how they’re evolving, comes from a recent partnership between Tapjoy’s newly launched in-house brand experience design studio, Interplay Studios, and 20th Century Fox to promote the animated film Ferdinand.
For Ferdinand, Tapjoy took a traditional rewarded video and added interactive end cards to them. Trailers for the movie were accompanied by branded minigames that included a mix and match memory card game, a fall-and-catch game called Bull in a China Shop and a maze for players to puzzle over.
According to Tapjoy’s findings, all three campaigns saw an average completion rate of 97 percent. Although Tapjoy CRO Shannon Jessup told AListDaily that this was the same completion rate of rewarded videos in general, the interactive end cards added another 30 seconds to the 30-second trailer, totaling a whole minute of in-ad engagement time. She also notes that the click-through rate of end cards is three to fives times higher than traditional mobile video ads.
“Over the last year or so, we have seen a notable increase in the amount that brand advertisers are spending to reach mobile gaming audiences,” said Jessup. “Mobile gamers are an extremely desirable audience for brands, and our data shows that 63 percent are women, mostly between 18 and 44-years-old. The best time to reach them is while they are engaged in a fun, entertaining, low-pressure activity like mobile gaming.”
Rewarded videos are an effective way for brands to engage with mobile gaming audiences because they not only offer positive brand affinity, but they help drive the metrics that they care about most: viewability, audibility and video completion rates. Jessup said that interactive end cards add downstream metrics such as conversions and sales.
Brands may also take advantage of cross-promotional integrations, the way the NFL partnered with Rovio to promote Super Bowl LII in Angry Birds 2. Ghodrati said that App Annie observed a 30 percent bump in downloads and an active user increase for the game during the time leading up to the Super Bowl.
But Robinson doesn’t believe that in-game cross-promotions offer good ROI for the majority of advertisers, stating that a worldwide survey from last year revealed that only four percent of mobile marketers were excited by these ads. Cross-promotions stand in fifth place behind native ads, social video, full-screen video and playable ads, which is by far the most popular at 45 percent.
“These partnerships only make sense for huge names with huge budgets and massive studios,” said Robinson. “Brands are missing out on ideal targets at every level from indie upwards, not just the very top bracket.”
However brands choose to engage with the mobile gaming audience, both Ghodrati and Jessup emphasize that the method needs to naturally complement the gaming environment so that it doesn’t create tension with the user.
In the meantime, it looks like brands are becoming more aware of video games. App Annie reported that the global average for advertiser spend is set to grow from $13 to $52 per user by 2021, as “advertisers increasingly leverage technology and new ad formats that allow for better targeting and measurements of ads and their effectiveness.”