Soon after the advent of mobile apps we started seeing advancements that are related to them and the trend is not believed to stop anytime soon. For years now, game ads, which are the ads that urge people to install the latest mobile game app have been quietly serving the lifeblood of mobile advertising in the digital marketing spectrum.

As the trend of playing games on the mobile phones boosted, thanks to the development that the mobile application development sector seen in the past few years, a growing number of marketers are finding games to be solid space to run video ads. The mobile advertising company “AdColony” let go of about 100 people a few weeks ago, and one of the potential problems that the company’s parent company Opera identified was unpredictability in mobile game advertising. In short, the number of hit games before was very limited and softer ad prices than in recent years.

The company representative also told us that now they are moving more of their focus towards the “performance ads” and programmatic as opposed to directly sold ad packages from leading marketers. Overall,  mobile advertising is growing at unimaginable pace. So in this scenario if a business owner’s wants to know what are the benefits in the current scenario and future, it will be a very wise question to ask for now.

Jeremy Sigel, global director of partnerships and emerging media at the ad agency Essence, who previously logged a stint at the mobile ad company Linkstorm, explained it in this way:

“Our clients were never comfortable with mobile gaming, but they wanted to run video in apps. So they looked the other way for years.”

Then, in the past few years, Facebook video became huge, and soon Snapchat came on the scene. “Brands would much rather run an ad next to video on Snapchat featuring content from ‘The Voice,’” he said. At the same time, mobile game ads “never graduated to premium for our clients.”

“We used to work with companies like [AdColony] and Vungle [another mobile ad network] and we liked them,” he said. “But we don’t do business with them anymore [for brand advertising].”

The constant stream of mobile game companies advertising their own games isn’t what it once was, Sigel added. It used to be a lot easier to launch a mobile game when there were a few hundred thousand apps in the Apple and Google app stores. So lots of big VC-backed game publishers spent as much as they could on game install ads.

Now, “discovery is impossible,” in app stores, said Sigel.

Thus, ad spending from small, independent mobile game publishers has thinned out. KC Srinivas, vice president and general manager, video and gaming at the mobile ad company InMobi, said that because the top 10 gaming companies now fully dominate the app store charts, “they no longer have to spend on user acquisition.”

A few years ago, “it was about installs, driving ranks,” Srinivas said. “Now, the Top 10 mobile game rankings haven’t changed in 12 months.”

Overall, eMarketer says that app install ads climbed 12% to $5.7 billion in 2016 in the US so it’s still a solid market. Zain Jaffer, CEO of Vungle, remains bullish on game advertising, noting that consumers are expected to spend over $100 billion on mobile games globally by 2021, according to the analytics firm App Annie.

“The gaming app install market is definitely not drying up,” he said. “Advertisers are putting more of a priority on the metrics that matter … what we’re seeing instead is that the industry is growing but advertisers are shifting spend away from inefficient platforms that don’t meet their [goals].

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