How To Monetise Your Games By Ads: 10 Questions To Erick Fang

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Posted: May 12, 2016

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Erick Fang was the product partner of Umen, and later joined Alimama (a business within Alibaba Group), becoming the youngest senior product expert in the company. At the moment, as the Mobvista’s Vice President of product management, Erick is in charge of advertising products.
What is the best time for advertising, what’s the difference between the monetisation of casual and role-playing games, why video ads is the future of mobile advertising but not for every market, and how to ensure that your users are not scared away by the ads – Erick Fang, Mobvista’s VP of Product, explains.
Is that true that all the mobile games can be monetised by ads?
No. The decision whether to monetise your audience through mobile advertising depends on the type of the product you’ve developed. Generally speaking, hardly can “heavy” games such as the role-playing (RPG) or casino games be monetised through ads as that will affect their user experience. Also the return on investment (ROI) from the in-app advertising will be incomparable with the in-app purchases. In Vstargame, the sub-brand of Mobvista, we prefer the free-to-play model with the additional fee-based options and functions.
Casual games could be monetised easier though ads as a majority of people don’t want to spend money on them. Despite Mobvista offers the wide range of the ad formats such as app walls, ad feeds, interstitial, customised icons, and banners, for game publishers we would recommend to try app walls or native feeds that usually demonstrate at least 50% better performance.
Is pay-to-play the only option for the heavy games?
Not really. If the publisher wants to use mobile advertising for monetisation of the “heavy” games, video ads and incentive ads is the best option. For example, in some “pirates” games the ads are represented in the form of the a treasure box floating in the sea with a question mark on it. After the user clicks on it, he or she will be asked whether they want to watch advertising video. As a reward, they will receive a game credit (gold).
What trends have you seen with the types of ads mobile players engage with?
We’ve noticed some remarkable trends in mobile advertising industry: fewer banner ads, increase in native ads, growing popularity of the video advertisement. In other words, with the tech developments and the faster and accessible mobile Internet, the industry is shifting to more dynamic and entertaining ad formats. The mobile users’ habits and preferences are also evolving: now they are ready to spend their time on ads on condition that they are interesting and diverting. That is why we believe that native ads and video ads is the nearest future of mobile advertising.
Since 2015 video ads have gained their popularity on the market, and the campaigns with video advertisements were ranked on the very top in the ad networks. According to the eMarketer reports, the mobile video ad spending in the U.S. is nearly doubling every year, and will reach almost $7 bn in 2019. No wonder the ad networks are eager to compete for this piece of pie!
What are the disadvantages of video advertising inside the games?
The main disadvantage of using video ads is the high volume of the traffic they consume and, consequently, the larger users’ expenses on mobile Internet what might become considerable barrier for the monetisation through video advertising in some countries such as India and Indonesia. This means that not only should game developers make sure that their games are supporting video advertising but also provide the technical opportunity to compress video inside the app for balancing the quality and size. As the ad network, we shall recommend our users to turn on WiFi before watching the video.
Meanwhile, game publishers and ad networks are looking for the innovative ways to monetise their products. Next month Vstargame is going to launch a new casual mobile game, that could be played offline, and the ads will be displayed only when the device is connected to the Internet. We shall test different business models as a combination of a few monetisation schemes (in-app purchases and advertising) too.
What metrics should the publishers track?
Basically there are two types of operating metrics used by the game companies to examine the games’ performance: those that measure the audience, and financial ones demonstrating the revenue and profitability of the products.
The first category includes daily and monthly active users (DAU and MAU respectively), number of installs, retention rate etc. Besides, games could be measured on the player engagement: you have to take into consideration session frequency, session length, and number of game sessions played.
The second group consists of the average revenue per daily active user (ARPDAU), average revenue per paying user (ARPPU), and return on investment (ROI).
Successful game is a business that has to satisfy gamers’ needs in fun and entertainment, and guarantee the profit to the developers. In terms of monetization, ROI is the most important metrics that game developers have to track.
How do the ad platforms help to monetise the games?
In terms of monetisation we do a lot of technical retargeting. For example, developers can accumulate some device information such as the OS version etc. (of course, if they get the permission for this). If they are willing to share some information with us, our data team can optimise the ad performance according to the users’ preferences, for instance, suggest the apps they would likely to download. Also using tags inside the ads helps us to send pertinent advertisements to the mobile users. At the moment we are working on the new video SDK for game developers that will be released soon.
How must developers prepare before approaching ad networks?
The first step any game developer has to take is to evaluate the game and polish it if necessary.  Secondly, you have to choose the right monetisation model: freemium, free-to-play (F2P), pay-to-play (P2P), pay-per-episode, try-to-play etc.
Also you must have a clear picture of your audience to target it effectively. To monetise games through advertising you have to choose the proper ad formats and be sure that they do not annoy and irritate your players.
How can publishers ensure their game is enjoyable for players?
To keep users satisfied, the best solution for the developers is to make the ads the part of their game to balance the ROI and user experience (that’s what we call native ads). The ads must be relevant too: usually another games are promoted inside the games (although there are always the exceptions, such as the e-commerce ads for the female players). The well-designed ads can also help to enhance the user experience.
Video and incentive ads are the most popular mediums in games now but you have to put them in the right place at the right time. For example, instead of interrupting the gamer with the pop-up  ads while he or she is focused on passing the level, it’s always better to demonstrate the ad in between the activities or during the pause.
Any good samples of in-app advertising?
Let the users make their own decisions whether to watch ads or not. For instance, when the gamer’s avatar “lost the life”, there might be an options either to start level from the very beginning or to watch video ads and move forward. In this case, ads are welcomed by audience.
Try-to-play is an effective and native way of advertising too: in between the tours the advertisement  with another game comes out, so that the customer can play it. With the call to action (“Install” button) appearing in the end, the player can decide whether heshe liked the game and wants to download it on the device.
Developers can integrate branding ads into their games. For instance, few years ago American insurance company State Farm launched its branded power-ups inside the game Angry Birds Go! Although this kind of advertising is hard to customise for another publishers but both designers and advertisers are working on the ways to adjust and integrate native ads in a wider range of apps.
When is the best time to demonstrate ads?
There is no “perfect time” although I recommend avoid advertising too early. Wait 2-3 days after the installation before demonstrating the first ads to not affect the user experience.
Overall, always evaluate your game as you are the player yourself. If something is annoying or seems inappropriate for you, it’s better to change the ad format or try another ads.
You can visit Mobvista’s site here.