September 1, 2022

In-Level and In-Ear: The future of ad monetization

IAB reports audio's 58% YoY growth, making it a rapid-growing ad segment. Developers can boost ad revenue without sacrificing retention.

More than ever, now feels like a real turning point for free-to-play games. The app stores are pushing drastic changes and monetization partners are consolidating. Meanwhile, the dynamics are shifting – there are only so many adverts a person will sit through. It’s time for studios to look at alternative revenue streams.

Luckily, a new format is evolving – audio ads. Audio is one of the fastest-growing segments in advertising according to the IAB, with a 58% year-on-year growth rate. And it offers a new way for developers to increase their ad revenue, without sacrificing retention.

Here’s how.

Audio ads increase ad revenue, without increasing churn

Integrating an SDK for audio is easy, especially for an experienced team. They work in the same way as any other advertising SDK. Developers create the opportunity, advertisers around the world bid on it, and the highest-bidding creative wins the spot. This is done all programmatically.

The difference? With audio, players can carry on playing. According to research from DAX (the programmatic arm of radio and out-of-home advertising leader Global), 44% of gamers said that being able to keep playing while they listen to an ad has a positive impact on their experience.

It’s not all about the audio, though. Developers can also include visuals – a banner or icon – to add more value to their ad. Audio can also be integrated as a form of rewarded placement, providing currency or value in exchange for listening. Players are more likely to engage with an ad if they’re getting something in return – research from Aarki found a 45% higher engagement rate with rewarded ads than non-rewarded formats. 

It’s the next ad format to help the industry grow

Advertising in games has evolved tremendously since the launch of the app stores. In the same way display and video have matured, audio ads will too. This is just the beginning.

And even now, audio ad eCPMs can be anywhere from $5 to $15 (US). They can also help drive incremental ARPDAU of 5% to 10% from US traffic alone, based on what we’ve seen with our clients.

Even though these are the early days for audio traffic, fill rates are already high. Advertisers see value in putting their ads into games. And this is a trend that’s set to continue as audio ads sweep across the Americas, Europe and Asia.

It’s worth noting that audio ads also don’t compete with current interstitial ads. This is because audio ads run during gameplay. They simply slot in naturally, adding to a developer’s repertoire.

More brands are using audio ads in games 

Audio advertising is already a popular option for brands and advertisers. But podcasts and music streaming services have limits for advertisers. In-game advertising can expand their audience and let advertisers measure the results accurately – something they’ve come to expect from other formats.

It’s also good for an advertiser’s reputation. Research from Tapjoy has shown that in-game ads have higher recall and more positive brand association than other channels like social media. In fact, brands like McDonalds, CBS, and Progressive have already embraced in-game audio advertising.

Another tool in the kit for game developers

With more uncertainty on the horizon, developers need to explore newer approaches. It’s time to diversify how they bring in revenue. In the last few years, audio ads have matured and more brands are willing to embrace mobile gaming audiences. Tapping into this space can have immediate, tangible impact and help studios get ahead of their monetization challenges.

Ready to integrate audio ads into your game or app? Reach out to our partnerships team today to get started.

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