THE MEDIABRIX SOCIAL AND MOBILE GAMING REPORT Q

Transcription

1 THE MEDIABRIX SOCIAL AND MOBILE GAMING REPORT Q

2 TABLE OF CONTENTS Overview Key Findings Benefits for Brands Benefits for Developers Demographics The MediaBrix Advertising Benchmarks Developer Case Study: JackBox Games Methodology About MediaBrix 2

3 OVERVIEW Led by the growth of mobile, social gaming is one of the most engaging and popular activities across all screens desktop computers, laptops, mobile devices and tablets. In fact, according to Newzoo data, people around the globe spend one billion hours daily playing games, which is more than five times the amount they spend on YouTube or Facebook. According to emarketer, playing games continues to dominate as the most popular activity on mobile devices and tablets, and a over a third of smartphone owners and nearly 70.0% percent of tablet owners in the U.S. play games on their devices more than they perform any other activity. Also according to emarketer, by 2015, approximately million, or over 50.0% of the U.S. population, will actively play games on their mobile devices that s 8 out of 10 people. As marketers look for scalable solutions across all demographics, they will find one in cross-platform social game advertising, and this trend is being recognized throughout the industry. Recently, MediaPost reporter Steve Smith said, If marketers want to understand mobile content and usage, and think harder about how to integrate either ads or services into consumers lives, they need to wrap their heads around gaming. If marketers want to understand mobile content and usage, and think harder about how to integrate either ads or services into consumers' lives, they need to wrap their heads around gaming. What s more, as the digital media industry attempts to resolve the pervasive issues of click fraud, bots, viewability, fraudulent traffic and banner blindness, cross-platform social games provide brands with 100% viewable advertising where marketers get 100% share of voice, 100% of the time in a high quality environment with the most engaged users. For this reason, cross-platform social gaming has become an important digital marketing tactic for top brands, as well as a monetization tool for developers. According to emarketer, this year, U.S. social game ad revenues will increase by 22.9% and mobile gaming advertising revenues will also reach double-digit growth, proving that in-game advertising can t be ignored. This third installation of our biannual report explores industry-wide trends in the cross-platform social gaming market, including benefits for brands and developers, social game player demographics, advertising industry benchmarks and a real-world example from a leading game developer, Jackbox Games. Continuing in the tradition of previous reports, it shows how cross-platform social gaming advertisements continue to perform for brands. This report takes a look at the last two quarters of 2013, revealing how in-game ads surpass leading digital advertising formats when comparing the following metrics and benchmarks: CTR, interaction rates, video completion rates, engagement rates and reward acceptance rates. 3

4 KEY FINDINGS MediaBrix Momentum As of comscore s December 2013 figures, MediaBrix reaches over 45 million monthly unique Internet users in the U.S. who play social games online 20.0% of the total online audience, making MediaBrix s reach larger than Pandora, Twitter and Hulu Also according to comscore, MediaBrix reaches almost half 46.0% of the total online gaming audience, making them the largest gaming platform measured by comscore When comparing data from 2012 to 2013, MediaBrix found that emotional targeting and Breakthrough Moments (BTMs ) technology provides a lift in cross-platform social gaming advertising performance; in 2013, performance increased by 15.0% for online and 30.0% for mobile campaigns as a result of layering in emotional targeting For the first time, MediaBrix debuts rewards metrics and benchmarks, relevant for brands offering players virtual goods at moments of achievement, and the success rates are compelling as MediaBrix reveals that rewards garner a 63.8% acceptance rate on the web and a 67.9% acceptance rate on mobile MediaBrix social and mobile gaming value exchange ads see average video completion rates of 89.0% on the web and 83.1% on mobile, exceeding most other video ad completion rates in the industry Summary of Industry-Wide Trends Mobile continues to drive growth in the gaming industry; by 2015, approximately million, or over 50% of the U.S. population, will actively play games on their mobile devices; that s 8 out of 10 people (source: emarketer) Developers are turning to free to play (F2P) games and are embracing advertising from top brands as a monetization solution that seamlessly fits into their games and enhances the user experience, in conjunction with other revenue-generation tactics F2P is the dominant business model for mobile, taking over 90.0% of global revenues (source: Newzoo) Adding emotional targeting defined as a way for brand marketers to reach people, elicit positive responses and increase brand connections increased overall social gaming performance by 15.0% and mobile gaming performance by 30.0% from 2012 to 2013 (source: MediaBrix) Rewards-driven models are fueling the growth of in-game advertising, as marketer adoption rates of them increased by 61.0% from Q3 to Q4 of 2013 (source: MediaBrix) 4

5 THE BENEFITS OF IN-GAME ADVERTISING FOR BRANDS Before getting a full understanding of cross-platform in-game advertising benchmarks and how they compare to the digital advertising industry averages, it is important for marketers to understand the true benefits of social gaming. Below is a list of benefits for marketers: Reach No longer a niche, gaming is a mainstream activity that entertains people around the world. It is becoming more popular than watching television or films online or listening to the radio. According to Newzoo, people spend one billion hours a day playing games compared to only 175 million hours on Facebook and 134 hours on YouTube. According to August 2013 comscore data, over 700 million people worldwide play games on mobile devices or online, giving marketers the chance to reach a massive and engaged audience. Emotional Targeting and Breakthrough Moments Technology Emotional targeting offers brands a new way to reach and connect with people during game play, as well elicit positive responses and increase brand recognition based on a player s emotional state, hierarchy of needs and current activity. This approach empowers marketers to reach players as they experience specific emotions in real-time through immersive ad units with dynamically positioned creative messages, offers and promotions, while leveraging game assets and game mechanics. Emotional targeting in cross-platform social games enables marketers to reach people during Breakthrough Moments (BTMs ), when players experience a range of emotions from elation to frustration. With this approach, advertisers know exactly when players are experiencing these emotions and are able to target them appropriately. As users appreciate the brand s message, a meaningful connection is created, producing performance and brand metrics unparalleled in the digital advertising industry. Positioning Brands As Heroes In-game advertising is unique, because it offers marketers a way to reach a massive and engaged audience that circumvents issues such as banner blindness and click fraud prevalent in standard digital advertising. Cross-platform social gaming advertising provides a way for marketers to finally think beyond web-based interstitial, banner and pre-roll video ads, which users often ignore, resulting in poor performance. On the contrary, it delivers to brands a way to seamlessly integrate into one of the most popular and engaging forms of media available social and mobile games. Also, in-game advertising offers brands a chance to reward, encourage and rescue players in a way that is additive to the user experience. For example, with BTMs, brands can reach game players during moments of achievement, such as when they get a new high score or a longest jump. This allows brands to be the hero as they reward players with a virtual good. Once a reward is redeemed, people will reciprocate the brand s gift and take a post ad action such as purchase a product or visit a website and further engage with the brand. The entire experience is in-unit and doesn t disrupt gameplay, giving marketers a unique way to make lasting, meaningful connections with people. Mobile Video Formats Mobile is driving social gaming growth, making it crucial to marketers who want to reach gamers, and people are interacting with mobile video more than ever before. According to emarketer, 74.4 million people in the U.S. 30% of the U.S. mobile phone user base and 23.5% of the U.S. population viewed videos on their mobile phones at least once per month last year. In-game advertising offers marketers the chance to deploy video ads in an environment where users are most receptive to ads on the web, mobile devices and tablets. 5

6 Plus, a Harris Interactive survey reveals that 40% of smartphone owners prefer to see standard banner ads in mobile apps, while 60% prefer to see immersive and integrated ad units in mobile apps, such as those that offer people virtual rewards or currency and video ads that occur during natural breaks in games. Thus, it is best that marketers keep with the way people view and want to view content and run in-game mobile video advertising. Rewards in a Dopamine Economy By design, social and mobile games make players want to come back for more, stimulating the brain as part of the user experience. Whether players win or lose, they are challenged to succeed and take away rewards in the form of dopamine molecules each time they play social games. Plus, social and mobile games offer brand marketers the chance to reach players through new and inventive advertising such as reward-based units or value exchange. With these emerging formats, players will have even better experiences during game play, benefit from the additive advertising units and develop positive brand association as a result. Research supports that social game players want to keep playing because of the rewards, which inspire positive emotional responses from them. According to a recent industry article, licensed social worker and researcher Rae Staton said, games are based on a reward system, you reach a level, you unlock new perks and are rewarded with bells and whistles, points and high scores all of which encourage repeat behavior and if your buddies all high-five you and congratulate you on your big achievement, you have gained social status, acceptance and a boost to your self-esteem, which further encourages repeat behavior. Thus, cross-platform social games and new advertising formats leveraging these behaviors are fueling a reward-based dopamine economy that people want to partake in. Performance Branding According to a 2013 study by the CMO Council and Vizu, a Nielsen property, 64.0% of marketers planned to utilize a mix of both direct response and brand marketing online advertising tactics last year. Additionally, brand advertising saw a large increase in spending last year, as 63.0% of marketers said they planned games are based on a reward system, you reach a level, you unlock new perks and are rewarded with bells and whistles, points and high scores all of which encourage repeat behavior and if your buddies all high-five you and congratulate you on your big achievement, you have gained social status, acceptance and a boost to your selfesteem, which further encourages repeat behavior. * to increase their investments, enabling branding to play a larger role in digital advertising than it had in previous years. Cross-platform social games create high-impact experiences for brands. Since the entire advertising experience happens within games, marketers can receive data and analytics to help track and measure the success of their campaigns. Top-of-the funnel metrics are available to them, including interaction rates, video completion rates, engagement rates, social shares, purchase intent and time spent, offering new exciting ways for brands to measure performance. *Source: Gotta Be Mobile. (Feb. 5, 2014). Flappy Bird Addiction Pushes Gamers to Go Big with Hacks and Cheats [Blog post]. Retrieved from 6

7 THE BENEFITS OF IN-GAME ADVERTISING FOR DEVELOPERS Monetization For game developers, the barriers of entry are increasingly getting higher since the marketing and sales of games is now part of the developer s job. Since the onus is on the developer to run the gaming business, those that can monetize their games will pull ahead of the pack. Cross-platform, in-game advertising campaigns are a great way for developers to generate average ecpms upwards of $200 almost 180 times higher than industry ecpm averages for developers. In comparison, according to MoPub, ecpms averaged $0.81 for Android devices and $1.12 for ios during the 2012 holiday season. Advertising from Top Brands As game developers look for non-intrusive ways to generate more revenue, in-game ads offer them a way to monetize with friendly and highly effective advertising from top brands such as Coca-Cola, Arby s and Hillshire Farms. Advertising dollars from top brands continue to flow to digital mediums, such as cross-platform social gaming. emarketer predicts that by 2017, U.S. advertisers will spend $31.14 billion on digital branding initiatives, or 49.6% of the total digital spend. Also, according to data supplied by emarketer, the majority of marketers plan to use social, mobile and video in their brand marketing tactics all of which are available in cross-platform social games making in-game advertising an excellent solution for top brand marketers, while offering developers a comprehensive ad solution and SDK for F2P games. User Experience Gaming has become a critical form of media, which players see as a personal experience and players go through a range of emotions from elation to frustration during gameplay. For this reason, in-game advertising must recognize and complement the experience; not just replicate the web-based interstitial, banner or pre-roll video ads that perform poorly online or users will ignore. Also, gaming represents a seismic shift in media consumption since people play games on mobile more often than they perform any other activity. Thus, cross-platform social game advertising offers developers a new way to monetize F2P games, as well as the opportunity to deploy ads that leverage existing game mechanics and players emotional states. For example, with BTMs, developers enable brands to reach game players during moments of achievement, such as when they get a new high score or a longest jump, and allow brands to be the hero as they reward players with a virtual good. Once a reward is redeemed, people will reciprocate the brand s gift, take a post ad action such as purchasing a product or visiting a website and engage with the brand. The entire experience is in-unit and doesn t disrupt game play, offering the best user experience to players and a monetization option to developers. Cross-platform Technology companies and advertising tech vendors are better leveraging technology, such as HTML5 endorsed by the IAB as the format of choice for mobile ads and responsive design, for monetization, which allows in-game advertising to seamlessly be deployed cross-platform and across devices. According to emarketer, the majority of marketers said that HTML5 and responsive design are important developments in mobile advertising, revealing that such technological capabilities are poised to attract more advertising spending from brands. Analytics Going forward, tech vendors will deliver comprehensive and actionable analytics to developers so they can measure the success of their advertising campaigns. For example, they will provide opt-in rates, allowing developers to maximize their revenue and measure how users engage with their advertising units. Additionally, vendors will provide developers with video completion rates, click-through rates (CTR) and other performance metrics, data and analytics. 7

8 MEDIABRIX AUDIENCE: GENDER Male 33% Female 67% DEMOGRAPHICS Social and Mobile Game Player Demographics According to 2013 comscore data, more than 700 million people around the globe play games either on their mobile device or online. Also according to 2013 comscore data, in the U.S. roughly million unique visitors (or 46.0% of the entire Internet population) visited an online gaming website or portal and 67.3 million (or 50.3% of mobile users) went to an ipad, iphone or Android gaming platform in December. As of comscore s December 2013 figures, MediaBrix reaches over 45 million monthly unique Internet users in the U.S. who play social games online 20.0% of the total online audience, making Media- Brix s reach larger than Pandora, Twitter and Hulu. Also according to comscore, MediaBrix reaches almost half 46.0% of the total online gaming audience. According to proprietary data, MediaBrix reaches over 50 million game players each month. See to the left and below for MediaBrix social game player demographics. MEDIABRIX AUDIENCE: INCOME MEDIABRIX AUDIENCE: AGE MEDIABRIX AUDIENCE: EDUCATION $0 - $29,999 $75,000 - $99, yrs yrs High School Some College $30,000 - $49,999 $100,000 - $149, yrs yrs College Grad Grad Degree $50,000 - $74,999 $150, yrs 65 + yrs Source: MediaBrix / Exelate 8

9 AVERAGE AD CTRS AVERAGE INTERACTION RATES Source: MediaBrix, DoubleClick, and Data Supplied by emarketer Source: MediaBrix, DoubleClick, and Data Supplied by emarketer THE MEDIABRIX IN-GAME ADVERTISING BENCHMARKS MediaBrix is the leader in social and mobile gaming advertising for brand marketers. Over the past six months, MediaBrix has compiled benchmark data on cross-platform social gaming campaigns. This report provides information about the benchmarks and compares them to leading digital advertising formats. When comparing data from 2012 to 2013, MediaBrix found that by layering in emotional targeting coupled with BTMs cross-platform social gaming branding performance increased by 15.0% for online and 30.0% for mobile campaigns. CTR According to DoubleClick, standard image, flash and rich media ads generate click-through rates (CTR) less than 0.2%. Data supplied by emarketer and sourced from Salesforce Social.com reveals that Facebook sponsored ads garner average CTR ranging from 0.3%- 3.2%. Also according to data supplied by emarketer, mobile banner ads garner average CTR of 0.4% around the world. On average, social and mobile gaming ads see CTR of 3.8% on the web and 3.2% on mobile, while value exchange ads on the platform see an average CTR of 9.5% on the web and 9.7% on mobile, outperforming all other types of ad units. Interaction Rates According to DoubleClick, rich media ads have a 3.3% average interaction rate and a 1.7% average expansion rate. Additionally, on average, people watch rich media ad units an average of seconds. Data supplied by emarketer reveals that mobile HTML 5 banners garner an average interaction rate of 5.0%. Average social and mobile gaming nonvideo interaction rates are 11.5% on the web and 10.0% on mobile, the highest of the reported advertising formats. 9

10 THE MEDIABRIX IN-GAME ADVERTISING BENCHMARKS Video Completion Rates Video ad completion rates on average are slightly less than 58.0%, according to DoubleClick, who defines this metric as the number of times a video played to its completion. Social and mobile gaming value exchange ads see average video completion rates of 89.0% on the web and 83.1% on mobile, exceeding most other video ad completion rates in the industry. Engagement Rates Facebook paid posts engagement rates vary depending on format, according to data supplied by emarketer. Paid photos garner a 5.8% engagement rate, while paid offers garner a 4.2% engagement rate the highest of all the other paid and organic posts on the platform. Comparatively, social and mobile gaming ads see engagement rates of 19.8% on the web and 15.8% on mobile, while in-game value exchange ads see engagement rates of 102.2% on the web and 91.4% on mobile devices. Reward Acceptance Rates Rewards are delivered to social and mobile game players during moments of achievement, such as a new high score or a longest jump, that allows brands to reward players with a virtual good and leverage a positive emotional moment. Only social and mobile gaming advertising has the capability to offer marketers rewards and metric benchmarks for virtual gifts. According to MediaBrix proprietary data, rewards garner a 63.8% acceptance rate on the web and a 67.9% acceptance rate on mobile. AVERAGE VIDEO AD COMPLETION RATES Source: MediaBrix and DoubleClick AVERAGE ENGAGEMENT RATES Source: MediaBrix and Data Supplied by emarketer 10

11 DEVELOPER CASE STUDY: JACKBOX GAMES About MediaBrix Products Views When a user comes to a moment of need for help or rescue, Jackbox Games and brand partners can present a helping hand and rescue players during BTMs. Views is a value exchange video ad that reaches users at such moments like when a player is stuck on a level or running out of lives and rescues them during the natural game flow. As a result, Views establishes a positive connection between the player, the brand and the developer. Rewards Winner of the DeveloperWeek 2014 Awards, Rewards is one of the best game monetization solutions on the market today. Here s how it works: as players reach a moment of highest achievement, developers like Jackbox Games and brands can reward them with a virtual gift. Once players opt-in to redeem the virtual gift, they will receive a short message from the brand and continue playing. The entire experience is in-unit and doesn t disrupt game play. Jackbox Games YOU DON T KNOW JACK is a free-to-play, cross-platform trivia game utilizing Breakthough Moments (BTMs ) and MediaBrix s ad products Flex, Views, Rewards and Fusion. The game has become a hit, generating more than five million downloads and engaging people with regularly refreshed, first-rate content. The company utilizes BTMs from the ground up to incorporate seamless brand advertising that respects the user experience. Currently, advertising comprises more than half of YOU DON T KNOW JACK s revenue and BTMs supply the vast majority of the ad spending. BTMs enhance the content-rich experience of YOU DON T KNOW JACK, while contributing to the bottom line in a way that fans actually enjoy. That s huge, said Mike Bilder, General Manager, Jackbox Games. They provide us the opportunity to run high-impact brand advertising, offering us the best ecpms and user retention of any of our advertising partners. The MediaBrix team is like an extension of our own, and they are professional, reliable and have found a way to tailor products to both brands and developers alike. About Jackbox Games Jackbox Games is the developer and publisher of YOU DON T KNOW JACK, Lie Swatter and other games for social, mobile and new-gen platforms. Learn more about the company by visiting Flex As a user is playing a game and reaches a congratulatory point, with Flex, Jackbox Games enables brands to congratulate their performance through this brand-response advertising unit, which is seamlessly integrated during natural game breaks to offer the optimal user experience Fusion Jackbox Games helps immerse brands within a social or mobile game or empower them to create their own BTMs with this exclusive, scalable integration that inspires positive brand recognition and association among players. 11

12 METHODOLOGY The MediaBrix Social and Mobile Gaming Report data was compiled for the time period July 1, 2013 to December 31, 2013 across social and mobile games. The MediaBrix benchmarks were calculated by averaging proprietary data collected from over 200 social and mobile gaming advertising campaigns and over one billion impressions. The advertising data was then compared to industry benchmarks supplied by emarketer and DoubleClick. Please note that social gaming performance rates and metrics may be higher or lower than the data included in the report depending on varying factors including intent, creative, media and other factors. ABOUT MEDIABRIX MediaBrix powers the industry s leading advertising and services platform for social and mobile games. Through a suite of proprietary products and analytics, the company delivers immersive brand messages during Breakthrough Moments (BTMs ) within games when people are most receptive to marketing messages. Our ads elicit positive emotions by rewarding users and enhancing the user experience during gameplay. As a result, people appreciate the brand s participation and they develop an emotional connection to the brand. MediaBrix s campaigns routinely see average video completion rates 84x the industry average and engagement rates as much as 2000% higher than other forms of digital advertising. Hundreds of top brands, including Coca-Cola, MTV and T-Mobile, and many of the world s largest game developers leverage the MediaBrix platform to provide over 500 million user-friendly BTMs to more than 200 million people each month. 12