Video Game Advertising in 2023

William Chen

Raid Shadow Legends. How many times have we seen this ad?

As a gargantuan industry that generates revenue in the hundreds of billions, advertising in gaming is a very strong tool for any marketer’s arsenal. In particular, mobile gaming is an area with massive potential for marketer’s to reach consumers with both scale and accuracy.

As most users are drawn towards free games due to the frontloaded cost savings, developers and marketers alike have been depending more and more on in-game advertising for free games. Whereas it may be unlikely for a user to buy a new game upfront, they are much more likely to watch an ad in order to receive some sort of in game “incentive” to advance their progress in game. For developers, although this won’t generate as much revenue per user per instance depending on CPMs, it can generate a significant amount of ad views, which a user may view as “free” since they spend time instead of money. For marketers, this opens the floodgates for potential to advertise with enormous scale.

In-Game Advertising Formats

According to Adjust, there are 6 different types of dynamic in-game ads.

  1. Interstitial Ads – Interstitial ads are rich interactive ads covering the entire screen. These ads take advantage of natural pauses in the user’s gaming experience, such as the break between levels. As they don’t interrupt the user experience, interstitial ads generally generate high impressions and conversions. The creative and timing of an interstitial ad are critical to its success.
  2. Native Banners – Native banners appear similar to web banner ads in that they blend seamlessly into the background in which they are placed for an unobtrusive ad experience. Unlike display banners, native ads are embedded and therefore, appear as part of the content. By 2025 native ad spend worldwide is anticipated to reach $400 billion. The increase in ad spend for this ad type is due to continued technical innovation, such as in-feed native ads, which are fully integrated with content.
  3. Contextual ads – Contextual ads are delivered to users based on the user’s state at the time the ad is served. Advertisers share set topics and keywords to their digital media source, which then use algorithms to match the ad with relevant content, keywords, topics, and images. Contextual ads are rising in popularity thanks to the latest privacy regulations that have changed the type of information advertisers can collect. Check out our blog: Contextual advertising’s comeback for further insights on harnessing contextual ads.
  4. Rewarded video ads – As the name suggests, this format of ads rewards users if they watch a full-screen ad. After users watch a 15-30 second video ad, they are given in-game currency, extra lives, more levels, etc. Users tend to prefer rewarded video ads to in-app purchases, and 62% of developers reported increased user retention after introducing rewarded video ads. Ready to get started with rewarded video ads? Our article Understanding rewarded video ads offers 10 best practices when utilizing rewarded ads.
  5. Playable ads – Playable ads are interactive video ads. In this form, users can play a short preview of the gaming app before deciding to download it. This pared-down version offers the app’s essential features so that users can “try before they buy”. By allowing gaming audiences a glimpse of how the app works, playable ads tend to reduce uninstall rates and increase retention.
  6. Advergaming – Technically speaking, advergaming isn’t a single dynamic ad, but rather an entire game built specifically to promote a company or product. In advergaming, ads are embedded throughout the game, all pointing to the singular brand that built the game. For example, it could be a racecar game where users race with an automotive company’s latest model. For more advergaming examples, read Advergaming: Why your brand needs a mobile game.

Fortnite and Jordan Collab – A Real World Example of Brand Advertising in Gaming

As it did with many different brands already, Fortnite announced the continuation of its cooperation with the Jordan brand. Players could compete for the Air Jordan XI Cool Gray, the iconic sneaker model, and discover rooms dedicated to the best players. The MVP would receive access to a virtual museum, a basketball court to test their abilities and an immersive video that advertises Jordan brand. This collaboration would cross-promote both brands by increasing awareness of the already popular Jordan brand and also bringing Jordan fans over to Fortnite.

Photo from epicgames.com

Video Game Advertising in 2023 and Beyond

  • Historically, mobile advertising has been geared towards attracting users from one mobile game to another. As time goes on and some games reach a significant player base, more and more mobile game ads are now marketing actual brands instead of another game in order to capitalize on the current popularity.
  • Gaming companies such as Roblox are looking into rolling out gaming advertisements in a virtual reality setting.
  • Fortnite has invested heavily on branded skins and weapons. More and more gaming companies are likely to follow suit.
  • Sony and Microsoft are planning on supporting ads in ad-free games on the console, a space that has previously been mostly free from ads.
  • Video game companies are falling under the scrutiny of the law
    • The Federal Trade Commission filed a lawsuit to prevent the Microsoft & Activision Blizzard deal from happening due to antitrust concerns.
    • The FTC reached a $520 million dollar settlement with Epic Games over Fortnite’s alleged violation of COPPA and the use of dark patterns.

Sources

Success usually comes to those who are too busy to be looking for it

Henry David Thoreau
Photo by Pixabay on Pexels.com

Published by William Chen