In-game advertising hasn't been done especially well, says King

Tyrone Stewart

Candy CrushGame development company King is relatively new to advertising, and programmatic advertising at that. Despite this, it was going into mobile game ads sitting on an already hefty revenue of over a $1bn from in-app purchases to fall back on, if it didn’t quite work out.

King’s range of more than 200 mobile games includes Candy Crush, Farm Heroes, and Pet Rescue. It was acquired by Activision Blizzard in 2016 for around $6bn, and has continued to grow – boasting over 400m monthly active users and two of the top 10 grossing apps in the US App Store for three years in a row.

Building on what was already clearly a solid model for generating revenue could have presented a challenge for the company, but it seems to have its advertising strategy all figured out. And the key to that is rewarded video advertising.

Watch the below video on in-game advertising

“We looked at all of the ad formats and we thought ‘where do we go with this? There’s a few different avenues we can take’. The most popular one is rewarded video,” said Greg Carroll, director of programmatic advertising at King, speaking at the Festival of Marketing. “The average consumer is spending about five hours a day on a mobile device – 92 per cent of it is in-app, of which 12 per cent is in games. So, about 35 minutes a day spent in-game, and that’s a 20 per cent increase on 2015.”

Reaping the rewards
On top of those figures, third-party research has also shown rewarded video to be above skippable, pre-roll, vertical, and social auto-play formats in likeability.

To see if those findings were correct, King enlisted the help of Millward Brown to conduct its own tests with early brand partner Nestlé’s cereal ads. Through panels and online surveys, King found that rewarded video was 35 per cent more liked than pre-roll, 130 per cent more liked that social auto-play, and people were eight times more emotionally engaged. In addition, all of King’s rewarded video ads are user-initiated.

It’s still very early days in King’s advertising journey, however. Of its around 200 games, it’s currently only running advertising on five apps, reaching only around seven or eight per cent of its user base currently – though it has plans to increase this considerably over the next six months.

King became profitable in its add business in Q1 2018
King became profitable in its ad business in Q1 2018

Industry issues
Though it has enjoyed a relatively positive start to its advertising life, King is still very aware of the problems that face the industry surrounding brand safety, viewability, transparency, and the rest. But, it knows that its already strong financial position puts it a good position to work past these issues, and help others deal with the issues across the industry.

“I think gaming is faced with a few issues. A large amount of them are focused on advertising revenue,” said Carroll. “I think King’s in a fairly unique position where it’s entering this market on a fairly strong financial basis. We’re able to focus on the issues, address them and maybe not get there as quickly as everybody else, but try and build a sustainable plan to get there in the end.

“The advertising in-game, I don’t think, has been done especially well. I think the frequency is too high, and the quality too low – and King needs to address that. I think it’s big enough to not just be able to address the needs of the advertiser, but the needs of the industry as well, and try to push everything forward,” he continued.

“The issues around brand safety, as far as King are concerned, we’ve got to address that pretty head-on and make sure we leave no stone unturned… that we’ve done everything in our power to make sure it’s the most brand safe environment going.”

In order to best ensure it maintains high levels of brand safety, King has chosen to have a brand-only environment, as opposed to also allowing performance advertising. It works directly with brands through agencies to ensure that this happens.

“We’ve worked closely with the likes of Nestlé and a few other CPGs to make sure whatever KPIs they’re trying to move towards… we’ll build that for them. But, otherwise, we’re working with most to make sure viewability is addressed and we we’ll leave no stone unturned when it comes to the objections that any demand partner could have when they’re addressing gaming,” said Carroll

“I think King is big enough, as far as an ecosystem is concerned, to make a real impact on that going forward. And we want to make sure it’s not just King that benefits from this, but the whole of the industry, because I think there’s a lot of really premium games out there that could really benefit from this.”

In addition, King looks to help within the industry by offering to share its first-party data. This, at moment, includes basic demographics and device IDs, but it’s building more-engaged audience profiles also. It says that it offers up as much data as possible because “we don’t want to be a walled garden” like Google or Facebook, as it knows that if you try to emulate the big boys “you’re not going to win”.