At least one developer is finding that it can make more money by serving both in-app purchases and reward-based advertising to its players.
Moble advertising network Tapjoy and Fresh Deck Poker developer Idle Games released the results of a case study that found that players (at least in this instance) still continue spending money on in-app purchases even when they have the option to get rewards from ads. Mobile apps are on pace to bring in $25 billion in sales and ad revenue in 2014, but many mobile-game creators are hesitant about implementing rewarded ads (which is what Tapjoy specializes in) because they worry that players will stop spending money buying virtual goods. Gamer spent $16 billion on in-app purchases in 2013, and if they can get stuff just by clicking through ads and watching videos, they may start spending less. In the case of Fresh Deck Poker, it turns out that the opposite is true.
In this case study — which isn’t a scientific experiment — Idle Games took the segment of its audience that previously made in-app purchases in Fresh Deck Poker and split it into two. One half started seeing rewarded advertising, while the other continued seeing the game as they did before. The studio found that it ended up making 14 percent more total revenue from having both in-app purchases and rewarded ads.
“We were fairly certain that Tapjoy helped us drive more net revenue, and this test proved our hypothesis,” Idle Games chief executive officer Stuart Lewis-Smith said. “Additionally, we were pleasantly surprised to learn that it helped us drive more in-app purchase revenue — not to mention deeper engagement and longer retention. We have found that in our games, player lifetimes are extended by interacting with rewarded advertising and collecting free currency. This keeps players engaged who may otherwise abandon the game, and we found that these players were more likely to the go on to make purchases further down the line.”
We’ve asked Tapjoy for a comment and whether it will conduct a followup study to confirm its results, and we’ll update this story with any new information.
Idle Games found that it generated 11 percent more from digital purchases when it had both in-app purchases and rewarded ads. The company also found that players that engaged with Tapjoy’s ads stuck with the game 2.2-times longer than players who didn’t.
Of course, this is just one game, and studios that make most of their revenue from in-app purchases are still likely going to hesitate before opting into incentivized adverts. Tapjoy is probably just happy that it can show that it’s possible to make more money all around by using its services.