Mobile ads: the key to monetizing gaming apps

Looking for the best way to monetize your mobile game? Monetizing with in-app advertising allows your users to play for free while you earn revenue. Read on to learn more about why developers choose to monetize with ads and discover best practices for implementing ads in your mobile game.

Historically, developers have used a wide variety of game monetization strategies, including subscription and in-app purchase (IAP) models. IAP allows users to pay for features to upgrade their game performance. However, in most cases, only a small percentage of mobile app users spend in apps during a given month. As a result, many developers are turning to mobile advertising as a way to unlock new revenue streams.

Because not all users are willing or able to pay for mobile games or in-app purchase items, advertising has become the most popular way of monetizing apps. Mobile app advertising is a win for everyone: developers, users, and advertisers. Developers can earn the revenue they need to keep producing content they’re passionate about. Users get to continue playing the games they love for free, which increases engagement and retention. And advertisers have the opportunity to acquire new users with targeted and relevant ads.

In addition to providing a free user experience, in-app advertising is a highly flexible model that goes hand-in-hand with other revenue streams, such as IAP. An increasing number of developers are finding that ads can co-exist with IAP without cannibalizing revenue. Developers are also discovering that rewarded ads can even give users a preview of in-app items available for purchase, sometimes converting more non-paying users into spenders. In fact, we have seen adoption of what’s often called “hybrid monetization” has increased by more than 50% in the past year.¹ Read on to learn how a developer like you chose to add in-app advertising to its game monetization strategy.

Chinese developer Avid.ly wanted to grow its revenue by finding a way to monetize non-paying gamers. With over 2 million daily active users across 50+ mobile games and only a small percentage of users making in-app purchases, Avid.ly saw that in-app advertising provided the opportunity for a new revenue stream. Avid.ly initially began working with AdMob to implement static interstitial and banner ads in a few of its apps, and devised a strategy to maintain its IAP revenue while adding revenue from advertising.

In the summer of 2016, following AdMob’s release of rewarded ads, Avid.ly decided to take the next step and add rewarded ads to a few of its mobile games. Although Avid.ly initially worried rewarded ads would cannibalize IAP revenue, the results showed the opposite effect. In one of its mobile games, Avid.ly saw a 40% increase in average revenue per user, an 18% increase in in-app purchase revenue, and a 20% increase in session length. As a result, Avid.ly now implements rewarded ads across its entire portfolio of mobile games.

Ready to start implementing mobile ads in your own games? AdMob provides a wide variety of flexible, non-intrusive, high-performing ad formats to help deliver a great ad experience for your game.

Banner ads are simple to use and a great way to get started with mobile advertising. Interstitial ads provide users with a full-screen experience. Rewarded ads deliver a highly engaging experience with an added value for users in the form of in-game rewards. Finally, if you’re looking to tailor the look of ads to your in-game content, native ads may be the right solution for you. Whichever format you select, your choice impacts the gaming experience. AdMob offers a variety of resources to test different ad formats and analyze their performance with your users. Read on to learn which format is best for your apps.

What is a banner ad? Banner ads are rectangular ads that can be anchored to free space at the bottom or top of the screen, or embedded in title or end-of-level screens. Banner ads can show up as text, image, or video.

When should you use banner ads? Banner ads are super easy to implement. They fit in well with casual and single screen games, as it’s typically easy to reserve a portion of the screen for advertising. Banner ads can help you maximize ad exposure while the user plays the game without interrupting the experience. Banner ad slots refresh automatically at an optimized rate calculated from historical data, providing fresh and engaging ads that complement a user’s gaming experience. Additionally, AdMob offers “smart banners,” which automatically adjust the banner size to adapt to different devices. Smart banners take the full width of the screen and use a height proportional to the screen height, making it easy to serve ads across device sizes and orientations without any extra effort.

Best practices for implementing banner ads:

• Banner ads can be placed on the top or bottom of the app screen and should be clearly distinguished from game content. One way to do this is by separating the ad from interactive elements. For example, you could place a border next to the banner ad.
• If the banner is anchored to the top or bottom, use the “smart banner” feature to have AdMob automatically fit the banner size to match the screen size, ensuring that your banners provide a great experience across devices (smartphone, tablet, etc.) and orientations (vertical and horizontal).
• If you don’t want to use smart banners and prefer to set the size of the banner ad manually, it’s critical to choose one that delivers the best performance. Typically 320x50 banners will be the best choice for a fixed display ad space. You can use 728x90 for larger devices such as tablets.
• Consider placing large banners in title or splash screens, if you have available space. For these placements, 300x250 banners deliver the best large banner performance.
• Finally, use the optimized refresh rate feature to let AdMob maximize revenue for you by picking the best frequency based on historical performance.

What is an interstitial ad? Interstitial ads are full-screen overlays. AdMob delivers all types of engaging interstitial formats, including interactive creatives and video ads. Interstitial ads can be easily closed at the user’s preference.

When should you use interstitial ads? Interstitial ads are easy to implement and do not affect game content layout because they are full screen. They are ideal for games with natural transition points in between game loops, as you can show the ad to users while they’re taking a break from gameplay. Although interstitial ads typically generate less impressions than banner ads, they tend to deliver much higher cost per thousand impressions (CPMs), resulting in significant overall ad revenue.

Best practices for implementing interstitial ads:

• Consider the flow of your game. Interstitial ads can be naturally inserted between different levels or stages of a game.
• Preload your interstitial ads to ensure the creative content is cached in time and ready to show when the user reaches the transition point.
• Think about your user’s mindset at the point you insert interstitials to make sure they do not become frustrated with the ads. For example, do not show interstitial ads when the user’s mindset is in tap mode, such as at the start of a level. Users can feel annoyed when shown an unexpected ad at the time they want to play.
• Be careful not to overwhelm your users with too many ads. You can leverage AdMob’s frequency capping feature to limit the number of interstitials a user sees in a period of time. One good strategy for finding the correct frequency capping is to start low and increase carefully to find the optimal volume for your game. This way, you can introduce ads without adversely affecting user retention.

What is a native ad? Native ads can be customized to match the visual design, layout, and content of the game. Native ads typically include a main image or video asset accompanied by text that matches the campaign story.

When should you use native ads? By matching an app’s look and feel, native ads may reduce user churn and increase long-term value. Native ads are suitable for most apps so long as you’re willing to take the necessary steps to customize a beautiful ad layout.

Best practices for implementing native ads:

• Match the style of your content. Design your native ads to resemble content on the same screen while using visual cues such as color, elevation, or shadow to differentiate them. All native ads must include an ad attribution and the AdChoices icon, and should not be mistaken for navigation buttons.
• Show a clear call-to-action and make it easy for users to engage.
• Use MediaView to display the main asset of a native ad. This ensures that both video and image assets can be successfully rendered.
• Consider how you want to integrate your ads. Native ads are best shown when users are reading through the screen, not when they are engaged in the app’s main activity. Popular approaches for integrating native ads into the gaming experience include placing ads in a menu, a splash screen before the game’s start, or in a storefront between in-app purchase and upgrade options.

What is a rewarded ad? A rewarded ad experience occurs when users opt in to engage with an ad in exchange for a “reward” within the app. Rewards can range from extra time playing the game to power-ups and features usually available only through in-app purchases. Rewarded ads will render video ads and interactive ads, such as playables.

Why use rewarded ads? Rewarded ads give users control of the ad experience: they decide whether to engage with an ad in exchange for a valuable reward. Rewarded ads have become an increasingly popular format in gaming, since they drive user engagement while delivering a huge boost to revenue for developers. In the last year, the number of apps using rewarded ads has grown 4x.² Rewarded ads generally have the highest eCPMs across ad formats as advertisers see increased user engagement and unprecedented performance. However, because impression volume is directly related to user opt-in rates, rewarded ads will only deliver great performance if they offer valuable rewards at the right time.

Best practices for implementing rewarded ads:

• Consider when and where your users might be interested in engaging with an ad to receive a reward, as well as the amount and type of reward that might be best. For example, let users watch an ad to keep playing when they “die” in a game, instead of having to restart the level. Or, offer bonus points in progressive games so that users can advance faster.
• Use rewarded ads to complement in-app purchases. Some developers have found success by letting users consume items typically offered via IAP. Once users get a taste of the premium version of the app, they are more likely to spend on in-app purchases in the future.
• Experiment with different reward types and amounts until you find the right implementation for your game. A robust A/B testing solution such as Firebase Remote Config can be used to run these experiments.
• Finally, just as with interstitials, make sure you’re prefetching your ads ahead of time so that creatives are already buffered and ready to go when the user opts in.

Many game developers use a combination of ad formats to maximize their revenue. For example, you can anchor banner ads at the bottom of your game while showing interstitials at the end of the level, and offering extra lives or bonus points with rewarded ads at the same time. With Google AdMob, you can successfully boost your revenue to keep doing what you love - developing games.

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