For long, video games remained a niche hobby in India, limited to a relatively small number of console and desktop gamers. However, with the increased prevalence of affordable smartphones and cheap data plans, Indians have taken to mobile gaming a big way. As a result, within a short span of time, the nation has propelled itself among the top-5 gaming markets in the world with over 250 million gamers.
In fact, mobile gaming has surpassed the popularity of video streaming services in the country, with Indians spending over an hour daily playing on their phones as compared to nearly 45 minutes spent watching videos. However, Indian gamers typically do not like paying for games, which is well evidenced by the overwhelming popularity of free-to-play and freemium games such as Candy Crush Saga, Ludo King and Subway Surfers. While these free-to-play and freemium games account for the majority of mobile gaming revenue in the country, only a fraction of it comes from in-app purchases. According to a KPMG-Google report, advertisers and publishers dominate the monetization avenues for game developers today.
As mobile gaming replaces TV and movies to become a major avenue of entertainment for Indians, it has emerged as a promising marketing channel. Indeed, mobile ads are expected to grow from a 34.5-billion-rupee industry in 2017 to 304.5 billion rupees within the next 3-4 years at a compounded annual growth rate of 44%. With less than 1% of gamers willing to pay for playing mobile and online games, in-game advertising is not only helping game developers monetise a large user base, but also brings a lot of value to consumers as well as advertisers. In-game advertising, which is basically putting ads in the virtual environment of a video game, has numerous benefits for all stakeholders involved as its strong connection to entertaining increases the acceptance rate of the consumers. This is especially true for “opt-in value exchange ads” or rewarded ads, where the gamer has the choice to engage or not to interact with the ad in return for a reward in form of in-game currency or extra lives.
How are brands benefiting from in-game advertisements?
Demographic reach: In-game ads present a targeted marketing opportunity for brands to reach diverse demography as the popularity of mobile games is not limited to a particular age group or gender. Nearly 45% of mobile gamers are females and almost a third are over 35 years old, give advertisers access to a wide range of consumers. Since most games are designed with a particular audience in mind, in-game ads allow marketers to access its target customer-base with ease.
High acceptance rate: In-game advertising, especially when it rewards users for engagement, has a high rate of acceptance. Study shows that over 86% of gamers consider it desirable and appropriate to watch ads if they get some sort of in-game reward. This is largely due to the opt-in feature of rewarded ads, which let users remain in control. In fact, data indicates that gamers are 3.5 times more likely to click on a rewarded ad than watch a pre-rolled ad.
Favourable association: As long as the in-game ads are not intrusive or disruptive, gamers’ attitude towards them is generally positive, with nearly 80% of them not seeing any impact of ads on their enjoyment. Instead, players have a strong recall of the brand, which manifests the purchase intention after being exposed to a brand during a game session, according to research. Moreover, rewarded advertising almost doubles the percentage of users who feel positive toward brands.
Brand Safety: Compared to other digital advertising platforms such as social media, promoting brands through games also helps in maintaining a controversy-free and relatable image. As there is a lack of user-generated content in games, there is little chance that a company will become associated with contentious material which may hamper its credibility. Even the games, in which the ads might appear, are vetted for inappropriate content by the app stores, making mobile games one of the best promotional platforms in terms of brand safety.
How do in-game ads enhance consumer experience?
Greater control: The prevalence of smartphones has reversed the dynamics of the traditional advertiser-consumer relationship, with more power in the hands of end users. Consumers, and more so gamers do not appreciate disruptive ads and instead prefer opt-in ads where they have full control. By giving users the control through rewarded ads, brands can actually build a stronger and more beneficial relationship with their target audience.
Exciting rewards: Most of the in-game ads appear at a critical time for the players as they are well integrated with the content or the game flow. By opting-in to watch such advertisements, gamers can continue to enjoy the game without having to buy coins or wait for in-game timers to expire. This way brands are not only getting their word out but also helping consumers continue their entertainment or play-session without having to pay for it.
The number of smartphones and mobile games in India is poised for continued growth, which is creating a lot of opportunities for advertisers to reach out to consumers in a way that is efficient and effective. At the same time, brands need to cautious towards not creating an unfavorable impression through intrusive and pre-roll ads which take away the entertainment of the game. By creating rewarding experiences for gamers, brands can leverage the virtual connection through in-game ads to create real-world bonds with a diverse and ever-growing consumer base.
Written by Rohit Sharma, Co-Founder and CEO of POKKT Mobile Ads