Google rolls out smart targeting for in-game ads

Brief:

Google rolled out smart segmentation features in Google AdMob that use machine learning to categorize players based on their likelihood of making in-app purchases, according to a company blog post. The software tools help game developers manage ad campaigns during the "app lifecycle" of pre-launch, launch and post-launch, MediaPost reported.
In addition, Google's new "app campaigns for engagement" help developers find and keep users who have installed an app but haven't yet used it. Game developers can place ads across Google's properties — such as search, display, YouTube and soon Google Play — to remind users to open an app for a customized coupon for in-app goods, or to show features that urge lapsed app users to return, per MediaPost.
Google will showcase the suite of software tools in a keynote presentation at next week's Game Developers Conference in San Francisco. The search giant has been hinting at its "vision for the future of gaming" since last month, and this week posted a second video teaser on YouTube for the March 19 event.

Insight:

Google's latest suite of software tools promises to help game developers monetize their apps throughout an extended lifecycle. While games like "Fortnite" are free to download, for example, developer Epic Games depends on in-app purchases to make much of its money. However, fewer than 4% of players spend money on in-app items, per the Google blog post. The tech giant's latest approach to monetization combines ads and in-app purchases in one automated solution, according to Sissie Hsiao, Google's VP of product, mobile app advertising.

The smart segmentation feature is particularly innovative in showings ads to users who are predicted to avoid spending on in-app purchases. Players who are estimated to spend won't see ads and can continue playing without interruption. Better segmentation promises to limit intrusive ads that detract from the gaming experience for loyal players. The new tool was tested on a select group of publishers and apps over the past six months.

While Google's suite of software tools aims to help game developers boost in-app revenue, developer hostility toward in-game advertising has softened in the past few years. The industry's percentage of revenue from ads rose 11% last year to reverse a three-year decline, according to a DeltaDNA study. The percentage of game developers that describe ads as an "important monetization opportunity" grew to 59% in 2018 from 39% two years earlier. The number of games that rely on ads for at least 40% of their revenues jumped 15% this year, the study found, while games generating 81% to 100% of their revenue from ads jumped by nearly 30%.

Games are the third-most popular category of app after social media and shopping apps, according to a survey by researcher Newzoo. Half of mobile app users said they opened a game app in the prior week, compared with 67% for social media and 56% for shopping. Mobile gamers are also much more receptive to advertising, with 53% of gamers saying ads helped them get updates about products they want, compared to 42% of non-gamers. Almost half (43%) of gamers said they're more likely to buy or use brands that have ads they like, compared to 32% for non-gamers.