Mike Shields from the Wall Street Journal recently published an article claiming, mobile games are the next great ad medium. Notice he specifies mobile games, NOT mobile. It’s a profound argument based on the premise that “Americans are spending inordinate amounts of time flinging angry birds and crushing candy.” This claim came just a few weeks before the 2014 GamesBeat conference, where the theme this year was about games contending to become the world’s most dominant medium of entertainment.
In an interview last year with VentureBeat, NativeX’s VP of Product Management, Michal Pilawski made a similar claim, suggesting that games are destined to become the new TV. Pilawski stated, “games are the most persuasive medium ever invented, making them attractive to advertisers.”
At this point, it’s still rare to find articles like this about the dominance of mobile games as an advertising medium in broader business publications such as the Wall Street Journal. Coverage about mobile games is typically limited to leading developers like Rovio, King, and Supercell.
When interviewing game developers on the issue, Mike Shields was told by Dave Madden, Senior Vice President of Global Media Solutions for Electronic Arts that, “EA believes mobile games will eventually mirror ESPN” as a publisher. EA makes a lot of sports games and they predict advertising in these games will continue to pick up in the years to come so they want to be ready.
Right now, the ads in mobile games are primarily for other games, rarely including brands. This ratio will balance out as the industry matures. According to Madden, “we’re going to see a pretty dramatic shift to brand ads in games.”
There is a huge opportunity for brand advertisers in games, from product placement to native ads. As it stands today, most mobile games are free-to-play and the majority of them only monetize 2-5% of their players. Ad networks like NativeX are helping game developers make money from the other 95-98% with creative forms of advertising such as rewarded video, discovery walls, and interstitials.
The problem is that the ecosystem is still very new and most indie game developers don’t have the time or resources to investigate their options. Instead of finding the best partner for their particular app, they default to Google’s AdMob which is known to industry veterans as the tool used by the “least successful app developers.”
Executives in advertising and mobile gaming are still split on the issue but momentum continues to grow in favor of mobile games. A recent study found, “32% of time spent with apps is spent on gaming.” On top of that, Emarketer predicts “rapid growth is ahead for mobile game ad spending.”
What are your thoughts?
Will brands shift their ad dollars, making mobile games the next great ad medium? Let us know your opinion in the comments below.