Today’s Mobile Game Economy: Fun & Profit are Not Mutually Exclusive
I recently had the opportunity to moderate a panel at the always-exciting Game Developers Conference (GDC) in San Francisco. We convened to discuss the best methods of monetization - advertising, in-app purchases, and pay-to-download - and the debate was spirited and informative.
A common theme that we noted in the panel, and observed in the conference as a whole, was the strong desire on the part of developers to provide as “pure” a gaming experience as possible for their users, while ensuring that their software is economically viable. This led to an in-depth discussion around how to strike a balance between the ideal user experience and the reality that interruptive experiences are the best performing for advertisers and internal promotions alike.
Coincidentally, we recently published the annual Millennial Media State of the Apps report based on a survey of app developers and publishers. Taking a games-specific look at this survey, we see that 87% of game developers and publishers monetize their apps in some way.
Among the findings, the majority of game developers are dealing with this issue of “balance”, while trying to develop new applications and drive revenue.
One growing trend that takes a first step at striking that balance is the introduction of user segmentation based upon their propensity to monetize. Those users are then provided with different experiences based upon the “bucket” to which they have been assigned.
For instance, a developer may determine that a particular user is unlikely to make an in-app purchase (a revenue method used by about a third of games according to our survey data), and as a result their advertising experience will become more interruptive, yielding the publisher revenue from an alternate monetization channel. Conversely, a user who has made one or more purchases may have a significantly more passive advertising experience, or perhaps see no ads at all for a prescribed length of time. Making these data-driven decisions about monetization down to the user level may be considered the latest turn in the programmatic/algorithmic revolution.
Another common theme among the GDC attendees with whom I spoke is the desire to gain deeper and less obvious insights about their users. With smartphones being the most personal devices that consumers own, a vast collection of actionable intelligence can be gleaned based upon observed in-app behaviors, along with equally important third party data. Ultimately, these insights enable advertising to work far more efficiently, and let developers make faster, smarter decisions about the best ways to monetize their apps.
Lastly, no discussion of GDC would be complete without an acknowledgement of the jaw-dropping innovation and creativity that developers are bringing to consumers every day. A walk through the Expo floor is filled with “the future is now” moments. Advertising plays an important role in helping publishers delight consumers, and it is clear that, as we develop new ad experiences and monetization opportunities together, the game has only just begun.
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Millennial Media is the leading mobile ad marketplace, making mobile simple for the world’s top brands, app developers, and mobile web publishers. The company's data and technology assets enable advertisers to connect with target audiences at scale, while driving monetization for publisher and developer partners. AOL acquired Millennial Media on October 23, 2015. Millennial Media boosts AOL's global, mobile capabilities and scale across ONE by AOL for advertisers and agencies, and offers the most attractive monetization platform for app developers.