In-game advertising in mobile gaming: Benefits, strategies, and top examples

In-game advertising is a revenue strategy game developers employ in which they earn money by selling ad space in their games. While the ads come in various formats, the goal for each remains the same—draw attention to the ad without interrupting the player’s gaming experience.

A popular choice for ad campaigns, in-game advertising can deliver up to a 12% uplift in purchase intent. In fact, 81% of UK and US-based media buyers say they will increase their in-game advertising spend in 2022. Discover the benefits of in-game advertising that make it so popular, the different types of in-game ads, as well as several key strategies for effective in-game advertising.

How do in-game ads work?

This monetization method functions as advertisers purchase ad space within a developer’s game. These ads can be directly integrated into the game or be viewed as traditional banner ads.

Thanks to the revenue generated from ads in their gaming apps, app developers can offer a free user experience while producing the content they love. Moreover, advertisers have a highly effective way to engage users in their ads to acquire new customers for products, services, or other apps.

The benefits of mobile ads in gaming are far-reaching. In addition to generating revenue and in-app purchases, app developers can enrich the user experience for increased engagement by offering rewards for watching videos or delivering relevant content with in-game ads.

Advertisers like that mobile gaming provides brand safety as it doesn’t contain user-generated content. Brands can rest assured that their ads only appear in appropriate and relevant gaming environments, offering them more control. Additionally, as in-game ads rely on user interaction, advertisers can accurately track key metrics such as engagement, reach, and completion rate.

There are two main categories of in-game advertising: static and dynamic ads. The different ad formats fall under one of these categories.

Static in-game advertising

Static ads are built into the game during the app's development stage. As the name suggests, the ads cannot be changed in static in-game advertising. Similar to product placement in a movie or music video, static ads often appear in the games on billboards or signs. Given that these ads cannot be changed, they haven’t been as popular as the dynamic ads we’ll discuss below.

However, static in-game advertising is increasing as newer iterations allow for greater customization. In fact, by 2028, static ads are anticipated to generate a revenue of $6,365.3 million.

Dynamic in-game advertising

In contrast to static ads, dynamic ads are banners displayed in a game that can be updated in real-time. Dynamic in-game advertisements provide advertisers with a great deal of flexibility and are easy to scale. They can also be used to geo-target opted-in users.

The diversity of ad formats is another reason dynamic ads are the popular choice among advertisers. Below we’ll cover the six most common types of dynamic ad formats.

1. Interstitial Ads

   Interstitial ads are rich interactive ads covering the entire screen. These ads take advantage of natural pauses in the user’s gaming experience, such as the break between levels. As they don’t interrupt the user experience, interstitial ads generally generate high impressions and conversions. The creative and timing of an interstitial ad are critical to its success.

2. Native Banners

   Native banners appear similar to web banner ads in that they blend seamlessly into the background in which they are placed for an unobtrusive ad experience. Unlike display banners, native ads are embedded and therefore, appear as part of the content.

   By 2025 native ad spend worldwide is anticipated to reach $400 billion. The increase in ad spend for this ad type is due to continued technical innovation, such as in-feed native ads, which are fully integrated with content.

3. Contextual ads

   Contextual ads are delivered to users based on the user's state at the time the ad is served. Advertisers share set topics and keywords to their digital media source, which then use algorithms to match the ad with relevant content, keywords, topics, and images.

   Contextual ads are rising in popularity thanks to the latest privacy regulations that have changed the type of information advertisers can collect. Check out our blog: Contextual advertising’s comeback for further insights on harnessing contextual ads.

4. Rewarded video ads

   As the name suggests, this format of ads rewards users if they watch a full-screen ad. After users watch a 15-30 second video ad, they are given in-game currency, extra lives, more levels, etc. Users tend to prefer rewarded video ads to in-app purchases, and 62% of developers reported increased user retention after introducing rewarded video ads.

   Ready to get started with rewarded video ads? Our article Understanding rewarded video ads offers 10 best practices when utilizing rewarded ads.

5. Playable ads

   Playable ads are interactive video ads. In this form, users can play a short preview of the gaming app before deciding to download it. This pared-down version offers the app’s essential features so that users can “try before they buy”. By allowing gaming audiences a glimpse of how the app works, playable ads tend to reduce uninstall rates and increase retention.

6. Advergaming

   Technically speaking, advergaming isn’t a single dynamic ad, but rather an entire game built specifically to promote a company or product. In advergaming, ads are embedded throughout the game, all pointing to the singular brand that built the game. For example, it could be a racecar game where users race with an automotive company’s latest model. For more advergaming examples, read Advergaming: Why your brand needs a mobile game.

By 2028, the global in-game advertising industry is projected to reach $13,990 million in revenue. We have some tactical tips for game developers and app marketers competing for these users with in-gaming ads.

• Know your gaming audience

  According to Statista, five out of ten people will be mobile gamers by 2025. Gaming is no longer a niche market. For example, did you know that 55% of females in the U.S. play mobile gaming apps versus 45% of males? As often purported, males do not make up the lion's share of mobile game players.

  Additionally, mobile gaming is not just for the youth, as 60% of Gen X play mobile games and 42% of baby boomers, according to data from NewZoo. With these stats in mind, take time to understand your gaming audience and create your in-game ads accordingly.

• Pay attention to ad placement

  You want your ad to delight the user, not frustrate them. Where and when your ad appears can make or break the user experience. The golden rule in ad placement is this: Never interrupt the user experience. Consider the three most noninvasive opportunities: Before gameplay, during a natural pause in the game, or post-game play.

• Measure and optimize

  With such fierce competition in the mobile app gaming environment, it’s essential to monitor your in-game ad campaigns. A mobile measurement partner (MMP) helps app marketers and game publishers to track their campaign performance across multiple advertising channels.

  Most MMPs allow their clients to segment and build custom audiences for retargeting, tracking cohorts, and utilizing deep links. The granular data gained from MMPs enables marketers to understand conversion data to know how best to optimize their campaigns for maximum return on ad spend. To learn more, check out Why do you need a mobile measurement partner?

Relevant to measuring and optimizing in-game ad campaigns, Adjust is one of the leading MMPs worldwide. In addition to the classic MMP features mentioned above, Adjust will help you understand the user journey from every possible channel with real-time analytics so you can discover which channels perform best. You can even build your own attribution logic and apply it across partners with our customizable settings and features.

Every day we help gaming companies like IsCool Entertainment use ad revenue data to grow user acquisition. To discover how we can help your in-gaming advertising succeed, schedule a call with us!