As more and more publishers opt to balance in-app purchase revenue with in-app ads, we've continued to observe the impact of this shift on player experience and retention.
Why? Because we understand that your monetisation model needs to do more than simply generate revenue for your game. You also need to know how incorporating ads into your current model could keep players happy and enjoying your game.
That's why we've commissioned research to look at the impact of ad monetisation from both the publisher and the player perspectives.
First, the March 2020 report that Meta Audience Network commissioned with App Annie: Ad monetisation in mobile games: The untapped potential looked at games with an ad platform SDK installed and the impact on performance factors, including app downloads, monthly active users, consumer spend, user sessions and time spent in app.
Secondly, the 2CV Report "Why the ad-supported model of in-game advertising is a win-win-win" asked players about the impact of in-app ads on their experience.
And finally, in the Facebook IQ-commissioned study: Genre and Great Games, Interpret surveyed more than 13,000 mobile gamers across 11 countries to better understand the types of ads that players liked to see and what monetisation models work well across all genres.
Here's what we found out about how in-app ads deliver short-term value for the game experience and long-term retention value.
How do ads affect time spent in app?
Some publishers have the misconception that ads could hurt time spent in app. But here's what the research showed:
Publisher data pulled by App Annie showed that total time spent in app increased, at both the 1-month and 3-month post-period after installing an ad SDK¹.
Players surveyed by 2CV shared that just over half (51%) of mobile gamers say they played for longer due to seeing ads in their games, which is universal across markets tested². In new markets, increased playtime is particularly prominent. Players in Vietnam (74%) and Brazil (59%) say they played for longer as a result of seeing ads in their games (2CV, July 2020).
How do ads affect in-app purchases and player experience?
Some IAP-heavy publishers (e.g. RPG) have been concerned that incorporating IAA could cannibalise their IAP revenue and diminish the player experience. Interestingly enough, we found evidence to the contrary.
One of our RPG publisher partners shared that after struggling to monetise only with IAP, they implemented rewarded videos and saw consumer spending increase³.
The ARPDAU of our game has increased more than 20% after implementing in-app advertising. As compared to the waterfall setup, we were also able to sustain a higher performance level for a longer period of time after the bidding integration. With Audience Network's strong support, we have the confidence to develop more of such hybrid model games."
Jinxi Yang, Director of Publishing, Mechanist Games
Gogii Games, another one of our game publisher partners, shared that the biggest, most pleasant surprise was the players' response to rewarded video ads. Not only was there a rise in the time players spent in app, but Gogii's customer service actually received requests to add rewarded video to more games as players enjoyed the opportunity to earn more in-game currency⁴.
Players surveyed in the Genre and Great Games Study shared that too much reliance on in-app purchases can turn RPG players away. More than one third of RPG players in South Korea and one fifth of US players have abandoned an RPG mobile game because it aggressively pushed in-app purchases⁵.
We recommend that developers implement a mixed monetisation strategy, incorporating in-app ads alongside in-app purchases to balance this. RPG players are open to this, with around 90% of players in Japan and 70% of US players saying they're OK with seeing in-app ads (Interpret, November 2019).
How do ads affect retention?
Publisher data pulled by App Annie showed that retention holds steady post-ad SDK installation. Plus, games that started with ad monetisation continued to grow downloads and monthly active users worldwide and across genres (App Annie, March 2020). Furthermore, 57% of mobile developers believe that in-app ads can improve player retention without detracting from the game experience⁶.
Players surveyed by 2CV shared that in-game ads encourage players to play for longer and more frequently, which means more exposure to ads. In fact, 47% have played more often, and 51% have played for longer directly because of in-game advertising (2CV, July 2020). Why?
ACCORDING TO THE 2CV REPORT:
53%
got rewards from the ads
38%
ads helped me unlock gameplay
31%
I liked what the ads were showing
30%
They didn't interrupt my gameplay
The consensus from mobile gamers is clear – that they are happy with in-game ads if they show things they like, and they don't disrupt their gameplay (2CV, July 2020).
How are publishers leveraging monetisation trends?
Some publishers may be curious about how the most successful publishers are monetising their games – whether through an IAP, IAA or a hybrid model of both. Here's what the data says:
Publisher data pulled by App Annie showed that shared advertising platform SDK installs are on the rise; 89% of top games worldwide had an advertising platform SDK installed as of December 2019 (App Annie, March 2020).
According to nearly seven out of ten publishers (69%) surveyed by Walnut Research, hybrid monetisation is now their top-used monetisation model (Walnut Unlimited, April 2019).
One of our publisher partners – Habby – shared that after implementing ads in Archero, they successfully launched the game globally and saw 60% of daily active users watching ads (App Annie, March 2020).
And what about the player response to ads?
Players surveyed by 2CV shared that most (79%) are happy with games on an ad-supported model. Notably, players enjoy rewarded video, as many find it the most useful and least disruptive to gameplay (2CV, July 2020). What drives this happiness is that the ad-supported model keeps players engaged with the game. And ongoing engagement with the game aids in new content discovery.
You already know: it's one thing to build a successful game, but building a successful game business is another challenge altogether. As we've seen, between publisher and player perspectives, incorporating in-app ads can help maximise revenue and evolve the game experience.
Ready for more useful publisher and player insights on shifting your game monetisation model to incorporate in-app ads?
Take a look at our partner report with App Annie "Ad monetisation in mobile games: The untapped potential" for more publisher data on in-app ads. And take a look at the Meta-commissioned 2CV report "Why the ad-supported model of in-game advertising is a win-win-win" to learn more about the impact of in-app ads on the player experience.
¹ Source: "Ad monetisation in mobile games: The untapped potential", App Annie (commissioned by Facebook Audience Network), March 2020 – a study of the global top 1,000 game apps, averaged across iOS and Google Play from 1 January to 31 December 2019.
² Source: Mobile games advertising report 2020, 2CV (commissioned by Facebook Audience Network) – a quantitative and qualitative study in UK, US, DE, FR, TR, BR, AR, KR, JP, RU and VN between March to May 2020 on the changes in the mobile game advertising since 2017 and how advertising impacts players, July 2020.
³ Source: Audience Network: Mechanist Games: Mechanist Games sees growth in in-app purchases after integrating an in-app ads strategy (April-May 2019).
⁴ Source: Audience Network: Gogii Games: Mobile games publisher Gogii Games doubles ad revenue with Audience Network rewarded video
⁵ "Mobile gaming genre study" by Interpret (Facebook IQ-commissioned online survey of 13,412 mobile games aged 18+ across AU, BR, CA, DE, FR, ID, IN, JP, KR, UK, US, Nov-Dec 2019)
⁶ Ads, IAP or both? Mobile games monetisation research by Walnut Unlimited (commissioned by Facebook), April 2019
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Meta Audience Network empowers app developers and publishers to deliver a great user experience whilst growing a sustainable business. With Facebook demand from millions of diverse global advertisers, publishers can expand their app's reach, keep users engaged and monetise globally.