This article is part of a Gaming Insights series in partnership with Facebook and VB Lab. 

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Alongside the disruptions of 2020, gamers play on. And they continue to engage with ads.

Industry data increasingly shows that ads complement in-app purchase revenue without a negative impact on retention or experience. As a result, more game studios are integrating player-friendly ad formats like rewarded video.

If you still see ads as the Dark Side of the mobile game experience, then it’s time to reassess.

Here are reasons why in-app ads won’t hurt your game — and instead, could spur the new revenue streams your business needs.

Rewarded video drives revenue and player experience — without impacting IAP

In the past, publishers and developers feared that in-app ads could cannibalize IAP revenue. In reality, publishers find that players who engage with in-app rewards after watching a rewarded video ad are more likely to make an in-app purchase.

IDC reports that rewarded video ads are particularly popular among U.S. gamers — specifically, that 71% of hardcore mobile gamers either like (41%) or are OK with (30%) rewarded video in their games, as detailed in the blog: Rewarded Video for the Win in Hardcore and Midcore Games.¹

Ludia, a Montreal-based midcore publisher, saw this positive player response to rewarded video in their titles Jurassic World: The Game and Dragons: The Rise of Berk, as noted in this case study.

“We’ve seen a jump in revenue when it comes to rewarded video; ad revenue increased 4x without having a negative impact on our IAP monetization strategy,” said Rose Agozzino, Senior Marketing Specialist at Ludia.

Gogii Games, a New Brunswick-based indie games publisher, saw a 2x increase in revenue after implementing rewarded video — without an impact on IAP sales, as noted in this Q&A. Players actually asked Gogii to add rewarded video to more titles.

It’s clear that players like rewarded video ads. So if you choose not to maximize the revenue potential of your game with ads, you are ceding valuable competitive territory to those who have moved faster.

Ads offer sustainable revenue streams — along with higher retention

The future of mobile game ad spend is promising. In a recent forecast for U.S. mobile ad spending, eMarketer predicts overall gaming ad revenues to grow roughly 10% in 2020 to $3.61 billion, with the bulk of this spending in mobile, stating: “Most ads in games are for other games, so most gaming advertising avoided the worst effects of the lockdown, and in some cases, gained users and engagement.”²

Heading into 2020, 89% of the top mobile games worldwide had installed an ad SDK to support monetization,³ according to the report: Ad Monetization in Mobile Games: The Untapped Potential — a Facebook-commissioned report using App Annie data from the world’s top 1,000 gaming apps (March 2020).

According to the same report, retention and engagement factors held steady across mobile games that installed their first ad SDK in 2019, across genres and countries. Specifically, mobile games that started with ad monetization continued to grow in downloads, monthly active users, and time spent in-app over the three months following SDK installation³. Some genres or sub-genres showed an especially strong affinity between ads and engagement:

• Casual: user sessions nearly doubled one month after ad SDK install
• Puzzle: 133% increase in total minutes and over 100% increase in overall sessions three months after ad SDK install
• Simulation: 54% increase in monthly active users three months after ad SDK install³

We also heard from gamers on their reaction to in-app ads. In an online survey of 12,277 respondents across 11 countries, 60% said they are happy with an ad-supported game model and 24% have taken an action directly after viewing an in-game ad, according to the Mobile Games Advertising 2020 Report by 2CV, commissioned by Facebook Audience Network (July 2020).⁴

Moving beyond myths — embracing the in-app ad opportunity

As you plan your monetization strategy and build new games, you can rely on mounting evidence that mobile ad formats like rewarded video can deliver an engaging player experience, along with the opportunity for new streams of revenue for your business. And remember, the Dark Side is just a brilliant piece of fiction from the mind of George Lucas.

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For more insights and tips to help position your game for growth — including genre-specific best practices for integrating rewarded video in your game — visit Facebook Audience Network’s Supercharge Your Game resource hub.

Nate Morgan is global gaming strategy lead, Facebook Audience Network

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¹IDC, U.S. Mobile and Handheld Gamer Survey, 3Q19, February 2020.

²eMarketer, US Mobile Ad Spending Update Q3 2020, July 2020.

³Ad Monetization in Mobile Games: The Untapped Potential, App Annie (commissioned by Facebook Audience Network), March 2020 – a study of the global top 1,000 game apps, averaged across iOS and Google Play, from January 1 through December 31, 2019.

⁴Mobile Games Advertising Report 2020, 2CV (commissioned by Facebook Audience Network), a qualitative and quantitative study in the UK, US, FR, TK, BR, AR, JP, RU and VN between March to May 2020, July 2020

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