Rewarded advertising is a great way to generate revenue within mobile apps. Read on from this article from Forbes for more information on the direction mobile gaming is going.
Gaming Apps in 2020
Gaming apps are experiencing their biggest year yet, fueled by record levels of app downloads and consumer spending. Mobile app usage across all categories grew 40% year-over-year with Gaming apps leading the way, according to data from app store intelligence provider App Annie for the second quarter of 2020. April saw an all-time high of over 200 billion hours. Meanwhile, consumer spending in apps spiked to $27 billion. Games and esports analytics firm Newzoo reckons roughly one-third of the planet’s population—that’s 2.6 billion people—will play mobile games this year. Many are die-hard gaming fans, and many more are part of a new and captive audience forced by global events to practice social distancing and use their downtime to seek digital distractions.
The lockdown also opens opportunities for models and approaches that monetize audience attention, as well as optimizing spend. This is critical at a time when the gaming industry is set to experience both a windfall of profits and the headwinds of a potential global recession. Right now, the “increase in playing time will naturally lead to revenue growth in mobile gaming,” Tianyi Gu, Newzoo Market Lead – Mobile.
Once COVID-19 restrictions ease and players shift attention to other pastimes, though, momentum is bound to slow. And lighter wallets will likely depress in-app spending: Full or partial work closures impact “more than 80% of a global workforce of 3.3 billion currently.” Newzoo is cautious. “We expect engagement growth to be much higher than revenues, as it is notoriously difficult to convert players into payers on mobile,” Gu says.
It’s why Fouad Saeidi, Founder & CEO of App Growth Network, a full-service app product marketing agency focused on optimization throughout the funnel from acquisition to retention, is bracing for “a boom” in approaches that incentivize and monetize audience attention. The global pandemic may have increased appetite for gaming apps. “But it’s also diminishing the purchasing power of users across a number of key regions and growth markets such as Brazil,” He tells me in an interview. To make up for the decline in revenues, he observes companies are doubling down on efforts to “drive organic efforts and growth and construct viral loops to acquire and keep users in the app.”
Rewarded advertising gets a refresh
Rewarded video, an ad-supported scheme that offers players perks and prizes in exchange for watching or interacting with an ad, has become the standard ad unit to engage and monetize gaming audiences at scale. The ad unit cashes in on an established behavior: watching commercials. The reality is that most game enthusiasts understand and accept that advertising has become an integral part of the games they play. For publishers looking to reduce their dependence on in-app purchases, rewarded video offers more than an effective monetization tool. It allows publishers to pursue a more balanced business model, diversify revenue sources and dial down the practice of targeting the high spending users (roughly 2% of players, also known as whales) who account for the lion’s share of in-app purchases. Rather than hunt for whales, publishers can double-down on models like rewarded advertising that offer greater value to a wider pool of players. For players, the payoff is the opportunity to gain additional benefits in the game without having to wait or pay.