- Developer King Digital is testing video ads in its games, ending a four-year hiatus as new approaches and formats gain traction across the gaming app category, according to a report in The Wall Street Journal.
- The tests come as "rewarded ads" — which offer players in-game incentives like game currency, points or extra lives in exchange for viewing — are increasingly seen as attractive to marketers and less annoying to players than earlier ad formats like banner ads and pre-roll.
- Nestlé SA and Visa Inc. are among the brands testing ads within King's games, including iterations of its flagship Candy Crush franchise. Coca-Cola Co., Ford Motor Co. and McDonald’s Corp. have run "rewarded ads" on games from King rival Electronic Arts Inc.
Game makers have had a long-running aversion to in-game video advertising, as the Journal notes. Developers have argued that interrupting gameplay with an advertisement has a much stronger negative effect than interrupting a TV show, for example. The fear was that gamers would simply close the app and move to another game rather than watch a video.
Now, however, attitudes are changing, because data are proving earlier assumptions about in-app ads and in-app video ads, in particular, may have been wrong. Tapjoy, which connects mobile advertisers to developers, teamed with measurement firm Moat to examine drop off rates earlier this year, and found in-app video ads actually delivered 98% viewability and 81% completion rates.
Metrics like those have turned the previously verboten videos into the darlings of the gaming world. Some 78% of the top 50 grossing games on Apple Inc.'s and Alphabet Inc.'s U.S. app stores in the first half of 2017 featured ads, according to Apptopia data cited by The Wall Street Journal, up from 45% a year earlier.
Before doubling down on in-game ads, however, advertisers need to be cognizant of potential pitfalls. Consumers still respond negatively to ads they perceive as an interruption. Any foray into using in-app rewards needs to focus on enhancing user experience and avoid detracting from it. According to Forrester Research released early this year, more than half of smartphone users say positive experiences involve ads that aren't disruptive.