US gamer sentiment towards in-game banner ads improved in the past year, yet left room for improvement

19.3% more US gamers said they “can’t stand” banner ads than said they “liked” them in Q3 2020. But the gap between these sentiments closed (improved) 5.7% between Q3 2019 and Q3 2020.

Why this sentiment change occurred is open to interpretation. Did the COVID-19 pandemic make more gamers receptive to in-game ads? Or did game developers/publishers, ad networks, and advertisers improved their processes materially in the past year or did both happen?

Almost 80% of mobile gamers reported seeing an in-game banner ad in Q3 2020.

Source: App Annie

In-game video ads were the most divisive format but US gamer sentiment towards them improved

In Q3 2020, 38% of US gamers said they “can’t stand” video ads. This number compared to 13% who said they “liked” them in Q3 2020. However, the gap between these sentiments also closed (improved) 3.5 percentage points between Q3 2019 and Q3 2020.

Video ads had the highest presence of all formats (banner ads, video ads, rewarded video, and playable ads). It is about 88% of mobile gamers reported seeing this ad in a game they played in Q3 2020.

Video ads had the highest negative sentiment. This could be due to their full-screen nature and lack of a direct value exchange like playable and rewarded ads.

Source: App Annie

More US gamers liked rewarded video ads than disliked them and this gap widened in the past year

11% more US gamers said they “liked” rewarded video ads than said they “can’t stand” them in Q3 2020. This trend indicates users are willing to part with their attention if it benefits their gameplay.

The share of gamers that saw a rewarded video ad in the past year rose the most among ad formats. It implies in-game rewarded video ads have relative momentum as a format.

Rewarded video ads had the highest positive sentiment with 27% of gamers reporting they “like them” in Q3 2020. This could be due to the direct value exchange with a user.

Source: App Annie

Playable ads neared break even on being “Liked” by US gamers

Playable ads had the smallest gap between “I can’t stand them” and “I like them” among all ad types, indicating that playable ads could be effective at balancing user acquisition objectives without disrupting the gamer’s experience.

They had the second-highest “like” share at 20%, behind rewarded video ads’ 27%.

The value exchange is immediate in both playable and rewarded video ad formats, which probably accounts for their relative popularity. Rewarded video ads reward gamers with items like in-game currency, whereas playable ads let a user test the game before downloading.

Source: App Annie

In-game ads often appear in some genres than others in the US in Q3 2020

Gamers report some gaming genres had higher rates of ad inclusion than others.

Of the 27 genre options in the survey, two groups of three genres had particularly low and high reported in-game ad viewing rates; 41% of the gamers who played a game in the low ad presence group at right reported seeing in-game ads in Q3 2020, and 69% of gamers in the high ad presence group at right saw in-game ads.

The high ad presence genres also reported about 3x as many gamers were playing them — which could be an inherent value proposition that attracts advertisers.

The Sandbox genre came in lowest, with 31% of gamers seeing an ad in the genre; the word & trivia genre was highest at 73% ad presence.

Source: App Annie

Ad Viewing Rates and A More Positive Sentiment Towards Ads Correlated Inversely In the US in Q3 2020

In the three low ad presence genres, gamers had a much higher net positive opinion of rewarded video ads (+17.5%) than gamers in the three genres that reported higher ad saturation.

Rewarded video ads still had a net positive sentiment even among gamers in the high ad presence genres, but it was lower (by 2.6%) than the overall gamer sample.

This indicates that gamers who see more ads tend to have a more negative opinion, and ad oversaturation may contribute to higher churn rates.

Source: App Annie

…And this sentiment gap was especially wide in the case of video ads

The difference between liking and disliking video ads was much starker for this format between the low and high ad saturation genres — with many gamers finding a high saturation of video ads frustrating (the net sentiment gap among gamers in the low and high ad presence genres was 27.7% in the US in 3Q 2020).

This indicates some mobile games use video ads frequently — a format without an immediate value exchange for viewers and potentially taking over the gameplay compared to a banner ad (that often take up a modest portion of the game screen).

The upshot is that rewarded video ads represented the clearest bright spot in the mobile in-game ad marketplace (from gamers’ perspective), followed by playable ads.

Source: App Annie

Appetite for easy-to-play Hyper-casual & Simulation games surged last year

While consumers hardly go out in recent days, the gaming subgenres that saw the greatest growth in market share by downloads during this time were Hyper-casual (+6.7pts), Kids (+1.0pts), Simulation (+0.6pts), and Racing (+0.3pts) — games tuned for the casual audience and designed for shorter sessions.

Rewarded and playable ads have the highest net opinion among US gamers and should be considered in the game experience.

Roblox topped the rankings of breakout games in 2020 by consumer spending, as the game provides deep social and online features. Social, online PvP play and cross-platform capabilities are poised for strong adoption in 2021.

Source: App Annie

Key Themes & Takeaways

1. As consumers are spending more time at home and finding new ways to connect with others, we expect cross-platform games to continue to gain relative ground versus mobile-only games — a trend that should allow more console-quality experiences to be available in the pockets of every
smartphone owner.

2. A year into the COVID-19 pandemic, demand for mobile gaming has remained strong with no sign of slowing down. Users are downloading 30% more mobile games per week in Q1 2021 than in Q4 2019 and spending 40% more compared to Q4 2019.

3. Sentiment towards in-game mobile ads improved in Q3 2020 compared to Q3 2019, according to a survey of US gamers in Q3 2020. Not all ad formats were equally regarded, however. Rewarded video and playable ads were gamers’ preferred ad formats in the US.

4. Oversaturation could become a significant problem for games that monetize through ads. In the US, consumer opinion of in-game ads is much better among gamers that see fewer of them. There’s a sentiment disparity by ad type as well. Ads that leverage an immediate value exchange tend to skew more positively than those that don’t – especially video ads.