Gaming is an inherently trial-by-error medium for both players and developers alike. It’s common for gamers to fail a level over and over again before either getting good enough or lucky enough to solve the problem and move on.

So it’s fitting that game developers are following the same learning process when it comes to monetizing free-to-play mobile games, first getting it wrong before discovering how to do it right.

Offering in-app sales for new levels, extra moves, or bonus material is an interesting tactic and is working to a degree. But the most recent report from mobile marketing firm Swrve found that only 1.35 percent of gamers spend money of any kind in a mobile game. That’s a decline from the 1.5 percent cited in July. What’s worse, that figure represents 62 percent of all mobile game revenue.

Now, you could certainly try to boost this figure by targeting your game at the people most likely to buy things, or you could develop your game in a way that makes in-app purchasing practically required. You could even double-down on the few who are spending money in games with new offers and opportunities. But you’re still relying on a fraction of your audience to generate income.

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The game industry has to embrace traditional brand advertising as well if it has any chance at generating revenues proportionate to its audience. But despite that in-app ad revenue is expected to grow 60 percent this year — and outpace PC online display advertising by 2017, claims a report from market researchers App Annie and IDC — many app developers are still balk at inserting ads into their games.

That’s because their first attempts at mobile advertising failed. Traditional banner ads didn’t work, because gamers hated them; any app that contained them was destined for a 1-star rating. Incentivized ads, the sort that ask players to watch a video or an ad in return for some type of reward, only push gamers to other games. And now Apple is banning the practice, doing everyone a favor in the process.

Beyond traditional banner ads, what really works is native advertising, and in particular native video ads, which are ad formats designed to fit naturally into the layout of any mobile experience. Native ads have great potential to generate ad revenue for developers without annoying gamers in the process. While certainly not new, native video ads have exploded in popularity in recent years due to their incredible effectiveness as an advertising format. When properly executed, native video ads can boost revenues by between 50 percent to 120 percent.

A recent survey from the Interactive Advertising Bureau found viewers responded far more positively to this kind of advertising. Three out of five said they were more receptive to ads that tell a story rather than just try to sell something, and 86 percent felt such advertising is necessary in return for free content.

But for this to work, game developers have to be engaged and hands-on. After all, they created the game, the environment in which the gamers exist. They know what fits and what doesn’t in their games, what’s contextually appropriate and what’s not.

The hallmark of native video ads is the practice of placing relevant content into an ad stream rather than just ads for random products. When done properly, native ads can appear more of a service and an enhancement rather than an interruption.

Just as gameplay updates and rewards are developed based user behavior and segmentation, so should ad strategy. It makes no more sense to arbitrarily add a new level to a game with no thought to how it would be executed or received, than it does to add advertising without similar thought to the overall experience.

The good news for game developers is that the technology has advanced leaps and bounds since then. Native advertising can be difficult because it requires a system that can place the right ad in front of the right person. That takes sophisticated targeting capabilities and a flexible ad inventory. But the technology now exists to customize ad strategy and deliver it to different gaming types.

Video publishers and networks today are creating mobile apps with an ad layer built in using a simple SDK that taps into powerful programmatic tools to buy and sell inventory and optimize campaigns, along with real-time predictive analysis of the results. Game developers can tap into that same SDK to easily do the same.

A good implementation of native ads is complementary to the overall experience on any type of content, be it video or gaming. It’s time for the game industry to get on board. Happy gamers means better revenues, better revenues means better games, and better games make gamers happy again.

frank sintonFrank Sinton is the CEO of Beachfront Media, a full-stack video company with solutions for publishers, advertisers, and developers. Previously, he worked for Sony Pictures Entertainment as executive director of architecture. Beachfront Media provides solutions for video discovery, video syndication, and video app development for managing and monetizing video applications across screens and devices. For more information, please visit