Mobile game businesses have experienced immense change in 2021 – from iOS updates to the continuation of pandemic-influenced spending behaviours, and the ever-evolving regulatory landscape.
We've taken a close look at the current and future state of app monetisation, offering inspiration for the player-first experience of the future, as well as guidance for game publishers, developers and marketers looking to grow and monetise their games.
After interviewing 25 thought leaders – including ad tech executives, industry analysts and game publishers – we've identified top priorities to focus on now, as you plan for growth ahead.
What's the current state of app monetisation?
Most mobile game businesses have had to adjust to how they market, monetise and measure their apps. Here are a few of the themes common across the industry today.
Disruption is a catalyst for innovation
Many gaming businesses are using the industry changes of today to create a future that works well for players, publishers and advertisers alike.
"There are voices of optimism for what's ahead", said Meta Audience Network's Business Product Marketing Lead Suzy Hay. "We're seeing an evolution of app business models to account for current market forces."
Mobile gaming keeps growing
Despite shifts in the ecosystem, mobile gaming continues to grow. In-app ad revenue in games is predicted to rise 21.3% in 2021 – with more growth ahead – according to research firm, Omdia.¹
"Change leads to new opportunities", said Becky Ann Huges, SVP Growth, Glu Mobile. "It just depends on how much your business is willing to embrace that change and find new ways to build competitive advantage."
Bidding has moved from priority to imperative
For game publishers, the accelerated shifts to bidding and hybrid monetisation that we discussed in 2020 are playing out globally and across platforms. We've seen more than a dozen publishers share their results for increased revenue, as well as time savings when moving from the waterfall to bidding.
Now, bidding is an imperative for publishers to monetise with Meta Audience Network beyond 2021.
A balanced monetisation mix is a must
Another essential for successful publishers is a monetisation strategy that balances in-app purchases (IAP) with in-app ads (IAA). Many developers affirm the best results when they build ads into their game from the start.
"It's important to diversify monetisation models – otherwise, you could limit the global impact of your game", explained Candice Mudrick, Head of Market Analysis at Newzoo. "The best hybrid implementations have thought about different monetisation streams as part of the game design itself."
What does the future of app monetisation look like?
2022: innovation drives value for players and businesses
Innovation will drive even greater value across the app ecosystem until 2022. Players will continue to find value in quality ad experiences such as rewarded video. Games will become more social as developers build live ops features into games on mobile and cloud. Publishers are likely to see greater efficiency and returns with the acceleration of app bidding. And gaming marketers will see industry advancements in measurement and creatives.
"Instant" gaming grows as mobile and cloud converge
The shift to cloud will allow play across platforms and sharing across apps, bringing the power of viral distribution to native game apps and increasing engagement with new players and existing players alike. Developers are already building Instant Games on the Facebook platform, for example. These no-download, low-friction-to-play games help enable a seamless evolution to cloud gaming.
"Imagine you can see and try all games straight from the same cloud platform – then only download those you want on your phone", said Jason Rubin, VP Play, Facebook. "You might access in-app purchases in the same game on both the cloud platform and in the app. And for developers, monetisation goes up because they get more pounds for every pound spent."
Publishers increase their mastery of monetisation strategy
In 2022, we'll continue to see app publishers gain time back from the efficiency gains of app bidding. Instead of checking price floors across multiple countries to maintain waterfalls, publishers can now see every placement that applies to every country and every user. With the time they save, developers can test different rewarded video entry points and frequency, along with other monetisation strategies.
While most successful gaming businesses already understand the value of building a balanced app economy into their game, more will shift their teams to combine user acquisition, monetisation and development into a single process. Gone are the days of build, then monetise: Monetisation is now a factor from the beginning.
Better creatives and measurement advancements will help with acquisition
Also, by 2022, we'll see more opportunities for gaming marketers. We expect to see a greater focus on creatives, user acquisition and media mix modelling.
"Advertisers need to tap into the motivations of why people play games, and what experience they want inside the game", shared Rick Kelley, VP, Global Gaming. "We'll also continue to see advancements in measurement, knowing it's important for advertisers to be able to understand how much time the user spends with the ad, who the viewers and players are, how to scale user acquisition and how to drive more profitable ad viewership."
2025: the future is immersive
Looking further ahead, the opportunities get even more exciting. We can expect people to have highly personal engagement with brands and publishers in virtual reality environments that incorporate gaming, entertainment, commerce and social experiences. Consider, for example, the role that augmented reality and personalised advertising can play in games of the future:
Virtual and augmented reality
Aysegul Yildirim, COO, Admost shared: "We expect more games to use augmented reality in the future, along with more interactive gaming experiences that affect monetisation strategies."
Personalised, interactive advertising
"Performance advertising really changes in the metaverse", says Ben Chen, EVP of Global Developer Relations, Tapjoy. "Instead of test-driving the Corvette, you're putting on an Oculus headset to drive and then you can download an NFT as a reward."
What do mobile gaming businesses need to prioritise to get there?
Now that we've had a look at the possibilities, let's touch on some recommendations. What should you do to prepare your app business for the future?
Those we interviewed highlighted three focus areas:
1 – Optimise efficiency
Look for opportunities to increase efficiency in ad operations, such as moving to bidding. Also, remove as much friction as possible along the app install journey.
2 – Increase player engagement
Build trust with consumers by focusing on content quality. Include social features to reach your audience beyond your game. And prioritise the player experience.
3 – Refine your ad strategy
Bring together monetisation, acquisition and development plans. Build non-personalised ad experiences. And diversify monetisation across IAP, IAA, subscriptions and more.
Ready to build, monetise and grow?
Facebook Gaming and Meta Audience Network provide an end-to-end set of solutions for gaming businesses looking to build, monetise and grow their games sustainably, including: Instant Games, cloud games, in-app ads and Advantage+ app campaigns.
For more insights and recommendations on how to position your game for growth in 2022 and beyond, download the full App monetisation industry outlook report.
¹Source: Omdia App Ecosystems Forecast, 24 December 2020
Related resources
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The essential app bidding guide: Four steps for publishers to achieve success
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Meta Audience Network empowers app developers and publishers to deliver a great user experience whilst growing a sustainable business. With Facebook demand from millions of diverse global advertisers, publishers can expand their app's reach, keep users engaged and monetise globally.