Expected to be worth $257 billion by 2025 with 2.5 billion gamers worldwide, gaming is a profitable industry with high ad monetization potential. And, yet, in-game advertising is relatively small: by September 2021, ad spend within video games drove $421 million year-to-date, while Twitter earned $3 billion in ad revenue all by itself.
Gaming platforms often resist in-game ad monetization for fear of disrupting the user experience. When there were rumors of EA launching TV-like ads, fans were livid. People were outraged at the thought of seeing annoying pop-ups while playing their favorite games.
In-game ad monetization, however, doesn’t have to involve terrible banner ads. There are many opportunities for user-friendly ads that natively integrate into the gaming experience. In this article, we define in-game ads, present opportunities for integration, and discuss how to launch your own in-game ad platform.
In-game native ads are ads inserted within gaming experiences. Ads could appear on in-game billboards, involve featured avatar items, and include brand-sponsored levels, all uniquely personalized to players.
Many game publishers already monetize with in-game native ads, like:
Video game developers drive substantial revenue from game sales and in-game purchases, but driving new sales is expensive, and in-game purchases can slow down, pushing publishers to figure out what’s next.
Ad revenue, however, is a controllable and scalable source of revenue. If game sales go down, you can turn on advertising and make up for lost revenue, thereby increasing the revenue you make per gamer. And if you want to make more money, you just launch new ad units, integrate premium targeting options, and so on.
Indeed, gaming companies can drive substantial revenue by charging advertisers premiums to reach their engaged audience with immersive ads. Advertisers leap at the chance to launch ads with such non-traditional publishers.
Fearing ads hurt the user experience, though, many companies opt against ad monetization. But there are many ways to serve unobtrusive in-game ads:
These ads are all native to the user experience and could even enhance game play (perhaps users enjoy the realism of branded items). Either way, native in-game ads allow you to drive incremental revenue without upsetting your players.
Not all in-game native ads will involve targeting. Sponsorships like branded karts may appear for every single user, and if your game doesn’t require Internet connectivity, you may have ads that are hardcoded into the game from the beginning.
But many game publishers will nonetheless place ads in real-time, using targeting and priority rules to decide what ad appears.
There are many different options for in-game targeting, such as:
Given the level of customization involved with ad ideas like sponsored skins and branded items, you would need to work directly with advertisers for these placements.
For in-game billboards, however, there are ad networks you can connect with, who will provide turnkey access to advertisers willing to buy those spots. One such company is Admix.
The downside of partnering with a network is the middleman ad tech fee that could reduce your revenue potential.
Building an ad platform to serve native in-game ads could take years, millions of dollars, and dozens of ad engineers. After this, you’ll still need to spend time and resources maintaining this ad server. With server costs, engineering resources, certification fees, refunds for bugs, and so on, the costs involved can scale greatly over time. Additionally, building out needed targeting for an effective ad server can be challenging. You’ll want these features sooner rather than later to drive revenue.
Unsurprisingly, many game studios choose to avoid in-game ads altogether, focusing on other forms of monetization first.
Given this, to serve ads within your game, you’ll need to build a custom ad serving solution. There are two ways to do this: build from scratch, or build faster with ad APIs. Here, we’ll weigh the pros and cons of both:
Building from the ground up means full control over your in-game ad platform’s scope and vision, but requires a large team and could take years to launch.
The alternate option is building the ad platform yourself, but using ad APIs to save time and resources. You integrate via APIs to get instant access to the tools you need to design a native in-game ad product, including ad decisioning, tracking, targeting, management, and reporting.
Integrating in-game ads can be a high revenue source for your company. With native in-game ads, you can monetize your gaming experience without hurting user experience.
To launch your own in-game ad server, Kevel’s APIs can help you get there in just weeks. Kevel has helped non-traditional publishers like TouchTunes, Klarna, and more build flexible ad platforms in a fraction of the time and cost as doing it from scratch, with more control and flexibility. Let us know how you can start today.
Sarah is an experienced writer with a software background, allowing her to translate between ad tech experts and lay readers. As Kevel's Associate Product Marketing Manager, she helps broadcast new products and features.