The mobile gaming industry has seen a meteoric rise over the last decade, with an explosion of games, players, and revenues. Yet, despite mobile games accounting for 11.1% of total time spent on mobile, they only generate 3.8% of the total ad revenue in the mobile ecosystem. This intriguing insight was highlighted in a June 21, 2023 article by Sara Lebow in Insider Intelligence. As digital marketers, this disparity presents us with a unique challenge and opportunity.
The Disparity in Numbers
From a digital marketing perspective, the potential reach of mobile games is huge. Industry insights show that US mobile gaming ad revenues are projected to reach $6.67 billion this year, growing by 12% from the previous year. However, when compared to the massive user engagement in mobile games, this figure seems small. Mobile games predominantly rely on in-app purchases for revenues, estimated to exceed $20 billion in the US this year.
The Potential of Mobile Gaming Ads
Despite the current disparity, there’s an untapped potential for digital marketing in the mobile gaming industry. Hypercasual games like Candy Crush are particularly effective at driving ad revenues. The high user engagement rates in such games present an opportunity for digital marketers to reach a large, engaged audience.
Why the Gap?
From a digital marketing standpoint, one of the reasons for this disparity might be the nature of in-game ads. Users often find them intrusive, which can harm the gaming experience. As a result, many games have moved towards in-app purchases or premium models to generate revenue, which may limit the potential for ad revenues.
Another challenge for digital marketers is targeting the right ads to the right users in a gaming context. Unlike browsing on social media or search engines, where user behavior and preferences can be tracked and analyzed, the gaming environment might not provide as much detailed information for precise ad targeting.
Closing the Gap
To leverage the potential of ad revenues in mobile gaming, a shift in digital marketing strategies might be needed. Ads need to be less intrusive, more relevant, and possibly even integrated into the gameplay itself to enhance rather than disrupt the gaming experience.
Furthermore, the digital marketing industry could benefit from advanced data analysis and machine learning techniques to better understand user behavior in games. This would allow for more targeted and effective ads, and potentially a higher return on ad spend (ROAS).
From a digital marketing perspective, the mobile gaming industry holds significant untapped potential for ad revenues. By innovating ad formats and leveraging user data more effectively, digital marketers can close the gap and create a win-win situation for game developers, advertisers, and players alike. This represents an exciting frontier in digital marketing that is ripe for exploration and innovation.