Brief:

• Facebook announced via a blog post that developers can advertise games with playable ads in its news feed. Playable ads let gamers experiment with a game before downloading them from an app store. The playable ads are rolling out globally in the coming weeks, the company said.
• Developers including Bidalgo, Kenshoo, Nanigans, Smartly.io and Wisebirds are launch partners for the playable ads, VentureBeat reported. Facebook's version of playable ads, which were in beta for more than a year, are different than other playable ads in the market in that they launch a video of the game first and then allow the user to play.
• Game developer Bagelcode tested playable ads and saw a 3.2 times improvement in return on ad spend (ROAS) on Android and a 1.4 times improvement in ROAS on iOS, while game developer Rovio saw a 40% lower cost-per-paying-user and a 70% lift in ROAS after one week.

Insight:

Playable ads have been around for a while, and Facebook has gradually taken steps to deepen its appeal among gamers and the developers who want to reach the social network's global audience of more than 2 billion users. The playable ads help advertisers drive installs from people who have experimented with the game and are more likely to play after installing, according to Facebook. Game developers such as Bagelcode and Rovio already have seen positive results from the new playable ad format, pointing to the potential success of Facebook's update.

As part of its effort to reach gamers, the social network in June launched a service to let gamers stream gameplay online for others to watch, similar to Amazon's Twitch platform. Fb.gg, which borrows its initials from the post-game courtesy of saying "good game," serves as a hub of all the video games streaming on Facebook and lets users follow e-sports celebrities, competitions and gaming conferences.

Players who make in-app purchases are a valuable audience for game developers. Paying gamers in the U.S. spend on average $20 in-app by day seven after installing the game and much as $49.33 by day 90, per a study cited by VentureBeat. Consumer spending on video games is forecast to rise 13% to $137.9 billion globally this year, with mobile games growing even faster at 26% to $70.3 billion, a Newzoo study found. More than half of game revenues will come from the mobile segment for the first time, pointing to a potentially lucrative audience for Facebook.