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Study reveals that video ads can pump up revenues without hurting in-app purchases

Above: Fusepowered video ads run in mobile games.

Image Credit: FusePowered

Video ads can increase ad revenue in games without hurting the retention of gamers or the purchases they make, according to a study by ad mediation firm Fuse Powered.

Toronto-based Fuse Powered studied millions of ad impressions for games for 15 days prior to adding interstitial video ads (which run in the middle of a pause during a game) and 15 days after adding them. The result was a 300 percent increase in eCPM (effective cost per mil, or ad revenue generated per 1,000 impressions) and a 700 percent lift in average revenue per daily active user (ARPDAU). Fuse Powered said that these ads did not affect rates of retention and in-app purchases — something key the mobile gaming industry, which brought in nearly $16 billion in 2013.

Adding video ads to games helps.

Above: Adding video ads to games helps.

Image Credit: FusePowered

In one tower defense game, eCPMs saw a 400 percent increase, moving the average gross eCPM from $4.02 to $19.83. During the same time, average revenue per paying user (ARPPU) remained flat, which indicates no loss in in-app purchases. This is important, because these account for the bulk of a free-to-play game’s standard revenue. During the same time, first-time in-app purchases increased slightly.

The inclusion of one video per player per day in a word game delivered an increase in ad ARPDAU of 40 percent. ARPPU from in-app purchases remained stable in the word game. Ad revenue in the game increased from 38 percent to 45 percent of total revenue, resulting in a 7 percent increase in total revenue from the game, with the addition of only one video ad per player per day.

Meanwhile, a racing game saw similar results. Over 31 days, video ads did not affect in-app purchases. During the same time, ad revenue grew from 3 percent to 22 percent of total revenue. The average number of sessions per user during this same time also trended up slightly.

And in a strategy game, the inclusion of video ads saw global eCPMs of $29.43 over the first 28 days. Retention was steady in the same period.

 

 

More information:

Fuse Powered helps mobile publishers make more money every day with AdRally, a fully managed ad mediation solution with integrated analytics and publishing tools. AdRally is the only fully managed ad mediation platform for mobile ap... read more »

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3 comments
Sanjay Gandhi
Sanjay Gandhi

Big flaw I think in the study. It says "During the same time, average revenue per paying user (ARPPU) remained flat, which indicates no loss in in-app purchases." The negative effect of putting video ads (or more ads) is not seen in the short term. After a few months, it becomes a myspace-loads of ads, and people start to leave. You don't leave a network right away after seeing ads-you go slowly, looking for other options in the market, who do not show so many ads or irritating ads. It should be obvious to anyone that putting ads in something in the middle will be bad for the user. They keep taking "data" to show otherwise-as you might expect from a firm whose business is to create and distribute these ads. Dump the analytics and big data...use your common sense, that's what many of these ads people lack. I work in this industry-full of "selective data sets" to prove whatever you want to prove. These people make astrologers look scientific. Sanjay Electrical Engineer

VentureBeat
VentureBeat

I'd be interested to see that as well

Rik Haandrikman
Rik Haandrikman

This seems to graph the transition from static ads to videos, as done by a video ad mediator. Did anyone ever do any (independent) research on the effects of adding any type of ads on retention? As in: No ads Yesterday, ads Today?

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