Mobile game publisher Gameloft has selected AerServ as their partner to drive in-app brand advertising, and this partnership illustrates the growth in mobile video advertising. Gameloft Advertising Solutions, Gameloft’s mobile advertising network, will gain AerServ’s expertise and technology to monetize and optimize yield across Gameloft’s arsenal of in-app advertising units. The goal is to bring high quality branded advertising into games. To that end, AerServ ads have been integrated into Gameloft games for rewarded video and mobile display ad units.
Mobile advertising is growing rapidly, and mobile video ads are leading the way as major brands see the benefits from in-app brand advertising. Video is the fastest-growing category on mobile, according to survey data from Cowen and Company. US mobile video ad spending is predicted to reach $17.42 billion in 2020, up from $4.35 billion in 2016, according to their numbers.
AerServ COO, Andrew Gerhart, spoke in depth with [a]listdaily about the deal and the future of mobile video ads.
Mobile video ads are performing well on mobile now, and Gerhart is optimistic about what lies ahead in 2017. “2016 was a fantastic year for mobile video, and we saw really great growth in that area and across all mobile applications, but video in particular had extreme growth,” said Gerhart. “That’s where we specialize the majority of our business. It performs really well for advertisers. Studies that we and other people have run indicate strong engagement and strong completion rates for advertisers that use those units. In addition, they seem to be the most engaging units for publishers and customers, as opposed to more intrusive units like an interstitial or a small banner ad. We’re seeing video continue to grow, and we anticipate in 2017 we’ll see continued growth in that area.”
Usually, in-app ads are about cross-selling other games, yet there’s a huge amount of brand advertising in other media that has yet to reach mobile in any great amount. Exploring opportunities for brand advertising in mobile games is what “kickstarted the Gameloft/AerServ partnership,” according to Gerhart. “That is where AerServ brings value to the mobile community. There are a number of different ad networks, exchanges and platforms that bring ads from other apps, cross-selling other apps. Where we add value is bringing the tools and the demand from brand advertisers like a McDonald’s, and a Chevrolet, and a Best Buy. That’s really where we focused our business, and it allowed us to engage with customers like Gameloft and drive great results for them.”
Brand advertisers have been dabbling in mobile ads, but the major influx that many have anticipated has yet to occur. “For brands, it’s not new for them, but they are certainly not at the maturity level (for mobile ad spend) as the games from Machine Zone or Supercell,” Gerhart said. “Those guys still dominate mobile ad spend, but it’s starting to shift. We’re seeing more brands come into mobile, but there’s still an education process and there are still some things that have to be worked out, but we’re seeing more spend in mobile coming from TV and non-digital media.”
AerServ has expertise and technology that can help brand advertisers take advantage of the mobile medium. “There’s a couple of things that we do differently,” Gerhart explained. “The main thing we do really well, which gets customers like Gameloft to engage with us and drives successful partnerships, is our focus on mobile video.” That includes the technology that AerServ has built, the way their server supports mobile video, and the formats they support. What’s also important is AerServ’s ability to handle programmatic advertising. “All the stats show that 60 or 70 percent of ad spend today is programmatic, and they’re expecting that to increase in coming years,” noted Gerhart. “We’re positioned really well to allow publishers and developers to consume the demand from programmatic, but also to use our technology and tools to get their own demand from there. Customers can not only take in open marketplace demand, but they can set up private marketplace deals to sell their inventory at a premium.”
On the other end, there’s a lot that game developers can do to make these ads more effective. The key is to integrate advertising into the gameplay. “When ads are intrusive, they don’t work for anybody,” Gerhart said. “In the long term, the advertisers don’t get good engagement, and the users aren’t happy. Rewarded video is a great option because it’s integrated well and it’s not intrusive.” He also noted that native ads are “still up and coming” and that banner ads still have a place. One thing Gerhart stressed for games is making sure that they’re using programmatic so that brands have access to their inventory. “That’s really important, and not all games do that today,” Gerhart pointed out.
Gerhart is very positive about what the future holds for mobile video ads. “In terms of the next twelve months, we’ll continue to see an increase in marketers and advertisers coming into mobile,” he said. “We need to see some better technology around attribution and different things that advertisers care about. There are still some of these lingering issues, but those are small. If we fast-forward five years and we’ll see an explosion in connected TV and other media like that, but I still think mobile has such a long way to go. For the past four or five years, we’ve been hearing that now is the year of mobile. Now that consumption is at an all-time high, the market is starting to become educated. Game developers are becoming aware of brand, which is great—they understand that they don’t always have to advertise their competitors in their games.”