The Mobile Ad is Dead, Long Live the Mobile Ad

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Kevin Ford

April 19th, 2013

Originally posted on GameSauce on April 17, 2013 – Mobile gaming is one of the fastest growing and most rapidly changing parts of the entertainment industry. In just a couple years, we’ve seen it evolve from a wild-west market chock full of indie developers figuring out the best way to utilize a touch screen, to a place where developers of all shapes and sizes create AAA-quality games with strong lifetime values. Through all of these changes, there has been one constant: people are constantly searching for the best way to turn a buck in mobile games. Whether it’s premium games, lite games with ads, or freemium, monetization is arguably the biggest driving factor in mobile games, and native advertising is one of the best ways for game developers to make money off their titles without taking away from the user experience.

So, what exactly is a native ad?

The term has been thrown around a lot in the advertising and public relations markets as the next big iteration of paid content. It could mean anything from a sponsored post to a branded advertisement. In mobile games, the native ad takes on a slightly different form. With mobile games, developers and advertisers are paired to games and products that share similar themes and are going after the same audience. Companies such as NativeX (formely W3i) help developers to create branded interstitials where the ad can be displayed.

Torch-Offerwall-Device-Lite-600x339

For example, let’s say there is a developer whose game has an audience of mostly older women. They may want to advertise a children’s game in their native interstitial. Mom sees a game her kids might like without being taken away from the game experience, the developer makes money off the ad, and the advertiser gets targeted ad views from people that are much more likely to check out their game. It’s a triple-win situation.

Based on early data, NativeX found that click through rates on native ads are 225 percent higher than on traditional ads. Additionally, effective cost per thousand impressions (eCPM rates) are, on average, 142 percent higher on native ads than on traditional ads. This data was found by comparing publishers who used native ad interstitials against publishers who ran non-native interstitials from February 2013 to March 2013. Each publisher used the same relevant advertisement. Click through rates on non-native ads were .06 percent on average, with an average 3.46 percent on native ads. For eCPMS, non-native ads had rates of about $4.98, where native ads had average rates of $12.04.

In layman’s terms, this means that a gamer is almost three times as likely to click on an advertisement if they see it as a native ad than a regular banner ad. Having an eCPM that’s 142 percent higher in native ads means that total earnings gained from the ads will be significantly higher. Using native ads means more money for developers and a better experience for the user.

Nativex

As developers continue to innovate new ways to monetize their games, it’s a safe bet that native advertising will continue to rise in popularity on mobile. In the relatively short time NativeX has been working on native ads, they’ve shown incredibly promising results as a new source of revenue for developers of all sizes. The time of native advertising is at hand, so consider well what ads to include in your mobile games when the time comes.

Kevin Ford

Marketing Manager

2013-04-19

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