How Advertising in Mobile Games Boosts Revenues and ROI

Viola Zannarini
December 20, 2023
How Advertising in Mobile Games Boosts Revenues and ROI

Advertising within apps is a really useful and important part of how mobile apps make money, especially when it comes to mobile games. It's a great way for game developers and advertisers to boost ROI and their profits by taking advantage of the huge number of people who use mobile games and how much time they spend playing with them.

While this may result in better user engagement with ads, publishers need to ensure that the advertisements in mobile games don't disrupt the user's experience, and are relevant to the content that the user is already consuming. 

In this article we’ll take a deeper look at the various types of in-app advertising that can be found in mobile games, as well as the outcomes that could result when choosing one kind of advertising in mobile games or another.

Characteristics of Advertising in Mobile Games

Various forms of in-app advertising exist, all strategically placed within the app's interface to engage players without interrupting the overall user experience. 

While banner ads, typically displayed at the top or bottom of the screen, serve as an unobtrusive presence, interstitial ads become larger, full-screen moments between game levels or during pauses, which need to be noticed without making the game experience worse.

Look here an example from Monopoly GO!

Video Ads

IAA also includes video content, with interstitial videos giving immersive, full-screen experiences that really grab gamers' attention. Video ads are a powerful and persuasive type of IAA, especially common in mobile games. 

These ads use visuals and narrative elements to draw people in and get their message across. 

Here's an example from the mobile game Family Farm.

Playable Ads

Playable ads take user involvement even further by providing an interactive experience, letting players test out a mini version of the game before deciding whether or not to download it. Even though they cost more, playable ads give the highest engagement rate of all the different creatives.

Take a look at this video ad of Whiteout Survival

Incentivized Ads

A particularly interesting and profitable kind of advertisement in mobile games is incentivized or rewarded ads

They're basically a form of advertising that gives users something in exchange for watching an ad. These ads usually pop up in shopping or gaming apps, and they reward people with things like extra lives, virtual currency, or power-ups when they watch certain videos. Ad networks make use of custom creatives, user targeting, and real-time bidding to get the best results for advertisers and increase ROI. 

Studies show that users are much more likely to make in-app purchases after engaging with incentivized ads. On top of that, people actually like these ads and are happy to use them to get ahead in their game.

Both video and playable ads can be shown to the users as interstitials or incentivized ads, each with its specific perks and drawbacks.

Fake Ads: a Concern when Advertising in Mobile Games

Beyond the trustworthy and captivating commercials, there's a problem that has been gaining more and more attention: the prevalence of fake and misleading ads

In order to preserve authenticity and transparency in the mobile game ecosystem, consumers and marketers must both be aware of the effects of these deceptive advertisements.

These ads frequently include gameplay or features that are not representative of the actual user experience, with the goal of attracting consumers through misleading promises or exaggerated claims. The goal is to increase downloads by luring consumers with content that is drastically different from the actual game.

There are some common characteristics that define fake ads in mobile games.

It is usual for them to display misleading gameplay footage, showing actions that are not actually part of the real game. This is often matched with exaggerated graphics, in the hopes that enhanced features can make the game more appealing than it actually is.

Other abused tactics are making ambiguous statements about the game, such as exaggerated difficulty levels, exclusive content, or using well-known game titles, characters, or themes to attract attention, even if the advertised game has no association with them.

Fake ads can be frustrating for users who download a game based on false expectations, leading to a negative user experience and potential dissatisfaction. 

In reaction to this problem, app stores and advertising platforms have been attempting to combat deceptive tactics by setting up stricter policies and rules.

Monetization and Advertising in mobile games: IAA vs IAP

In-App Advertising (IAA) is not the only form of monetization available for free mobile games. The alternative is In-App Purchases (IAP).

Buying items or subscriptions within an app is what's known as an In-App Purchase. You'll usually find these in mobile games where you can use coins, weapons and other items to help you advance. 

With the IAP model, users can actually carry out transactions while using the app, to then unlock lots of extra content, cool features, virtual items, and other bonuses. There are a variety of in-app purchases available, like virtual money, upgrades, and even subscriptions that give you access to special content or features on a regular basis.

Finding the right combination of free experiences and enticing premium content is key to keep users from feeling left out. Developers have to be careful to follow the rules for in-app purchases too, so users know what they're getting into and give their consent.

IAPs are really versatile, with options like limited-time offers and subscriptions, which makes them really important for staying up to date with mobile app monetization

A pivotal consideration arises in the choice between In-App Purchases and In-App Advertising.

Developers and advertisers need to weigh up the pros and cons of each model, such as user experience, revenue potential, ROI optimization and how much money to make without compromising the player’s experience. 

It's essential to evaluate how In-App Purchases and In-App Advertising work together to create a monetization plan that benefits both developers and app users.

In this choice, it all comes down to factors like the type of app you have, who it's for, and what you're trying to achieve. If you're making something content-driven with the aim of getting people involved, like strategic, simulation, RPG games which require a bit of effort and time to play, then In-App Purchases might be a good option, as purchases become essential to advance rapidly in the game.

On the other hand, if you're creating something more widely appealing with lots of interactions, In-App Advertising might be the way to go. It is mainly used in hyper-casual games, as users return frequently to the game during breaks or commutes and don't want to spend too much time or money on the app.

You need to think carefully about user expectations and how you want to make profits and maximize ROI. And if you want to get the most benefits, you can use a combination of both strategies, to increase your income. 

Ultimately, you want to be making money, but you also want your customers to have a positive experience and to keep engaging with your app.

Make Careful Choices when Advertising in Mobile Games

To sum up, advertising in mobile games is an essential and profitable part of the app money-making and ROI- optimizing process. Developers and advertisers need to be cautious and make sure that ads enhance the user experience, not ruin it, by using various forms of IAA - banner ads, interstitials, video content, playable ad and incentivized ads.

Unfortunately, there's a worry about fake and deceiving ads, so both consumers, marketers and app stores, need to work together to make sure the ads are authentic and honest.

In the end, it all comes down to finding the right balance between user experience and revenue when deciding between IAP and IAA, and maybe combining the two together is the best way to go.