Today the gaming industry is generating more annual revenue than the music and film industries combined. Over the next few years, the number of potential mobile gamers will grow exponentially as Ericsson predicts there will be 1.5 billion 5G smartphones in use by 2024.

During a virtual panel at Digital Media Wire’s annual LA Games Conference, Ayzenberg president Chris Younger spoke with industry leaders from Anzu, Google, Com2us and more about the growth of mobile games and how they’re navigating privacy updates, in-game advertising and community-building efforts beyond the industry’s record-breaking year.

With the arrival of iOS14 and IDFA updates, users must opt-in to share their phone’s serial ID, which will forever alter the way mobile game publishers measure, target and acquire. Apple introduced a proprietary solution, SKAdNetwork, enabling ad measurements to take place. Nevertheless, 47 percent of people said they’re unlikely to consent to sharing their Apple device identifier with apps that seek it.

The stakes for the mobile game industry is particularly high as digital ad spending is set to increase 20 percent this year with mobile ad spending accounting for approximately 75 percent of all digital ad spending.

When asked how Google is approaching the matter, Brandon Cubillas, head of industry for app gaming at Google, said that although it’s been a pain point not being able to track the new pandemic-induced influx of mobile gaming users, he sees the privacy changes as an opportunity to test new methods.

“We’re looking at things like exploring the effectiveness of signed-in users, which is privacy-compliant and doubling down on incrementality tools. The progress we’ve made in integrating Google Analytics via Firebase SKAd partners has opened a new trove of audience data that we’re leaning into to inform creative marketing strategies, game experience strategies, dynamic deals and updates” said Cubillas.

At Zynga, the response has been to invest in in-house resources. The company recently acquired mobile ad and monetization firm Chartboost to buffer against IDFA, noted Gabrielle Heyman, head of global ad sales, Zynga.

“It’s about bringing control in-house and being more in charge of your destiny by being able to control every piece. For Zynga, we’ve acquired a lot of studios, a lot of talent and a lot of users so being able to cross-pollinate all our games to our 170 million monthly uniques and having the ad tech infrastructure to be able to do that has been part of our strategic look forward,” Heyman said.

Kyu Lee, president, Gamevil, Com2us US, said that amid these changes, one of the company’s games, Summoners War, has shifted its focus slightly from user acquisition to brand and creating more content for its 100 million monthly uniques.

“The bigger thing is instead of looking at numbers, it’s been a great opportunity to engage more with the community and listen to what they really want. User voices can have a lot of noise and numbers speak reality, but it’s a good opportunity to look at what we have and what’s important,” said Lee.

Next, the discussion turned to innovation in revenue modeling for in-game advertising. Anzu, co-founded by Itamar Benedy, who’s also the company’s chief executive officer, is approaching this in a novel way as it’s the first company to address in-game advertising in the world of programmatic.

As brands’ perceptions around the mobile gaming industry change, there’s more opportunity for developers and publishers to work with brands to find the right target audience, Benedy noted. Anzu gives developers full control of ad placements, what content they allow and what data to share. After this one-time integration, Anzu can dynamically change the content and set it in a programmatic way, according to Benedy.

Liz Waldeck Pinckert, vice president, business development supply North America and Europe, AdColony, said the company pushes its team to play the games for at least one hour a day to guarantee proper ad placement recommendations.

“We try to become a user within the game. We look at data as well as actually become players ourselves,” Waldeck Pinckert said.

Adding to that, Heyman emphasized the importance of looking past programmatic and creating authentic bespoke ads that match a game’s look and feel.

“Our game studios actually love it because it’s non-cannibalistic revenue and it’s not competing against an ad unit that could be sold for performance or brand. The whole thing about gaming is winning, like your serotonin is being boosted and you’re getting stoked to win something. So the key for brands is to play a part of that elation and to give something better than you might get just for playing the game on its own, like have it be extra,” said Heyman.

On the topic of esports, Lee touched on Com2us’ efforts to increase user engagement with their newest title, Summoners War: Lost Centuria. For example, he said they added a TV button to the right corner that enables people to view other players as well as bet on game outcomes. Though they’re not streaming the content yet, Lee noted they’re going to launch esports tournaments soon.

When asked about viewing esports as a way to retain existing users versus a way to find new users, Lee said:

“What we learned is our game is so hardcore that the first time users watching the game don’t understand what’s going on. We want it to be both, but the reality is that it’s more user-focused.”

The subject of how to innovate around the owned and earned community rounded out the panel.

“You’re selling yourself short if you’re only integrating community features within your game. The full value can only be realized when you’re maintaining that environment outside of the game. That opportunity goes hand in hand with data about your users and incentivizing folks to create more user-generated content,” said Cubillas.

Click here to watch ‘The Growth of Mobile Games: What’s Next in Creativity & Innovation?’