In-Game Advertising:
Levelling Up User Acquisition
Table of Contents
The mobile gaming industry is booming, and advertisers need to connect with audiences in this immersive environment. Enter in-game advertising – a rapidly growing channel that allows brands and gaming companies to engage users directly in their favorite titles. But what does it take to succeed in this space?
At IndieAd, we had the chance to sit down with Pau Quevedo – who was, at the time of this conversation, VP of Product Performance and Growth at Smadex – a mobile DSP specializing in programmatic in-game advertising. Originally presented in our podcast, this article dives into the technical side of programmatic ad buying and why gaming developers need a tailored approach to maximize return on ad spend (ROAS).
What Is In-Game Advertising?
In-game advertising refers to the integration of ads directly within video game environments, creating natural touchpoints to engage users. From rewarded video ads to banners and playable formats, this type of advertising works best when it feels seamless to players. Pau explains why programmatic in-game advertising offers game developers a competitive edge by combining algorithmic precision with highly targeted ad placements.
Key Takeaways
1. Why Gaming Companies Need a Specialized DSP for In-Game Advertising
Gaming companies aren’t just looking to fill ad slots; they’re seeking to optimize player engagement and retention. Pau shared that the gaming industry is unique because it operates like a user acquisition machine – focused on driving installs and long-term retention. Traditional DSPs often lack the granular controls or the niche expertise required to succeed in in-game advertising.
Specialized DSPs tailor their algorithms for gaming advertisers by:
- Focusing on retention rates to find high-value players
- Optimizing ad placements for key touchpoints, such as post-level completion or during rewards
- Enabling creative formats, like playables and rewarded videos, to align with the gaming experience
In-game ads are like power-ups on a Mario Kart track - they’re strategically placed, adding value to the user experience without taking players out of the race.
2. Understanding the Value of Transparency in In-Game Advertising
One of the most common complaints from advertisers in in-game advertising is the lack of transparency from ad networks. Pau discussed how niche DSPs provide better clarity on the following:
- Where ads run → Many networks offer limited insights into the apps or placements, leaving advertisers in the dark about their ROI
- Performance metrics →Gaming DSPs allow brands to see which placements and creative formats perform best
3. Why In-Game Ad Pricing Needs a Rethink
Many advertisers focus on keeping costs low, but Pau emphasized the importance of balancing price and performance in in-game advertising. He explained: “Sometimes the best-performing users come from higher-priced placements, but advertisers must be open to testing to unlock this value.”
DSPs specializing in in-game advertising help game developers shift their focus from cost-per-install (CPI) to metrics like cost-per-retained-user and long-term ROAS.
4. Apple’s Role in the Future of In-Game Advertising
The conversation wouldn’t be complete without touching on Apple’s growing role in the in-game advertising ecosystem. Pau predicted that Apple’s moves to expand its app store ad offerings and create its own ad network could dramatically change how gaming companies approach iOS campaigns.
Contextual targeting and retention-based strategies will become essential tools for advertisers to thrive in an increasingly privacy-focused environment.
Why DSPs Are Game-Changers for In-Game Advertising
DSPs bring unique advantages to in-game advertising by offering:
- Retention-focused algorithms: Helping developers target users who stick around longer.
- Creative innovation: Playables, rewarded videos, and other formats that fit the gaming context.
- Granular transparency: Detailed insights into ad performance at the placement level.
In such a competitive market, success depends on partnering with experts who understand the nuances of gaming and programmatic ad buying.
Ready to Win at In-Game Advertising?
Whether you’re a gaming studio looking to boost user acquisition or a brand ready to dive into in-game advertising, DSPs with tailored capabilities are the key to unlocking growth. As Pau said, “The secret is to partner with a team that truly understands gaming.”
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