How Viable Is Mobile In-Game Advertising?

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gamer11.jpgADOTAS – I promised myself it wouldn’t happen to me. Spending Christmas with my extended family, I watched in horror as my younger cousins became addicted to Angry Birds. They spent most of Dec. 26 in bed with their eyeballs glued to a tiny screen, obsessed with catapulting winged brutes onto the heads of thieving swine.

But my curiosity got the best of me — I had to see what was so engaging. It roped me in fast — I have to fight the urge to play Angry Birds every time I get a free moment. I’m in the middle of the second mission and I believe there are seven more ahead… I don’t know whether to be excited or afraid.

Angry Birds still costs a dollar at the App Store, but there’s an ad-supported version for Android and other mobile platforms. However, on GetJar’s Angry Birds page, a good percentage of the user reviews complain about the ads.

Recently gathered data suggests that, in general, mobile gamers would rather pay for a game than sit through ads — and that attitude is not going to change in the near future.

eMarketer estimates of the $849 million in U.S. mobile gaming revenue gained in 2010, only $55.5 million came from advertising. That’s $793.4 million in user payments. By 2014, U.S. mobile game ad revenue will hit $185.9 million, still 12.3% of all mobile gaming revenue ($1.514 billion).

Globally, mobile game ad revenue $87 million in 2010 and will grow tenfold to $894 million in 2015, according to Juniper Research. However, that’s only one-tenth of the revenue garnered through user payments. The only bright note is that ad revenue will grow at a slightly faster rate than user payments — woohoo.

You have to wonder how much of an advertising market the mobile gaming sector is. Most mobile games cost less than $10 and provide hours upon hours of entertainment — and possible addiction (perhaps rehab centers should consider advertising on mobile games). Given the choice between paying a few bucks upfront or being interrupted constantly by ads, it’s not surprising that the majority would choose the former.

By this same logic, one would expect mobile users to pay a few bucks to subscribe to ad-free content via an app, but it’s arguable that banner advertising within mobile content isn’t considered disruptive — after years of ignoring display ads while roaming the Internet, we’ve just shifted the practice to our smartphones and tablets.

It woud seem sponsorships and game co-development may be a more fruitful way of marketing through mobile gaming, especially from a brand engagement standpoint. However, gamer opinions about ads would likely change if mobile game pricepoints jumped — but how high before the ad-supported version would be preferable?

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