This recording is from a panel I did last week with Jan Pollack from Wooga, Ross Brockman from Google, and Christian Facey from Audiomob, where we talked about ads in mobile games and how things have been changing in the recent years.
Topics that we cover include the privacy changes on mobile, what kind of future trends the panelists are seeing get materialized, and how game developers should optimally approach ad monetization.
Transcription of the episode
Joakim: [00:00:00] Welcome all to the panel today where we’re gonna be talking about ads in mobile games. It’s a, it’s a broad topic, but I think there’s, there’s a lot. Talk about their, since ads and mobile games have been around, I would say like close to, to a decade. I remember at Supercell Hay Day had the movie ticket.
And that was my first kind of like deep into seeing what you could do really with ads in the new wave was add colonies, video ads, which was, which were amazing. Of course, we had interstitial banners, whatever happening already, but I think like the industry has been moving forward. There’s been interesting stuff happening, but let’s kick it, kick it off by doing introductions here.
I have Ross and Christian. So Jan, can you first introduce your.
Jan: Yes for sure. Thanks for having me bot here. Really nice to meet you all guys. My name is ya. I’m from VGA, Berlin based publisher of story [00:01:00] driven, casual games our biggest journey, which you maybe know. And we are extremely focused on rewarded videos in our games was user experience making it really great and, and good.
So that’s our focus here and really happy to talk about current trends in the industry with you guys. Maybe Ross, you wanna take it further?
Ross: Sure. Nice to meet you all. My name’s Ross I work at Google. I would question Jo’s 10 year lifespan for, for mobile ads, cuz I’ve been doing mobile ads here for 12.
I joined originally from ad mob and I’ve worked across London and Hong Kong and Singapore with Google over the years. Either. Managing clients such as Jans who, who use our technology to integrate and, and deliver advertising or looking after the, the go to market and commercialization teams.
And, and that’s what I do today. I manage the team that looks after large client relationships in Europe, as well as the, the commercialization and go to market functions for our sales side and products at Google. Christian. Do you wanna great set?
Christian: Yeah, absolutely. [00:02:00] Yeah. Great, great to be here. I’m Christian, I’m the CEO of audio mob.
We provide non-intrusive audio ads and games and we created and pioneered and innovated in the in the space before that I was at Google. So shout out to Ross and Google. And I was also at Facebook as a science partner as well.
Joakim: So, Hey, I wanted to ask you first to, to dive into this kind of high level of ad monetization and the future of ad monetization.
What are some of the interesting trends that you’re seeing out there? Let let’s do this same order that we just did. So Jan, you can, you can
Jan: go first. Yeah. I mean, I think there’s always a lot. Kind of different trends, right? There’s always people asking about more analytics and insights. There’s always kind of networks trying to innovate on the creative side, trying to bring out new formats like Christian now is audio ads for mobile.
I think really interesting. There’s also always changes in the privacy side, like with all regulations from, from [00:03:00] governments and so on. So always people trying to adjust to that. So it’s always kind of different trends. And it’s. Cancer. The overall theme I would say is fairly much the same over the last years.
But it’s always changing anyway. So there’s new things coming up, people trying to adapt to that and so on. So yeah, I said like analytics bidding is also always a hot topic for the last few years already. Still not really fully into the market on, on every network, every publisher. So I think it’s still going on.
There’s a lot of different things. Yeah. So maybe Ross, what do you think about those? Yeah.
Ross: So, so what do we see? I mean, I agree with you. Yeah. That there’s no kind of earthquakes and, and no dramatic changes. I think at the moment, I think what we are seeing is that some things have become very, very stable.
I think you often talked about like the, the first time that the super cell and other kind of IEP, heavy companies tried ads. I think what we’re seeing now is that that ads are. A core part of the mix for pretty much everybody, depending on the circumstances. Right? So we, we [00:04:00] see hybrid monetization pretty commonly across developers, no matter what their business model is.
And, and one example would be, I spoke to a developer the other day who sells like an, an ad removal option for their, for their games. Right. But just like you, you pay the money, you remove the ads from the games. Except the rewarded ads, right? So like, even in those circumstances where like we’ve managed to find really good user experiences, I think, and kind of economic kind of integrations into how games are played such that ads is, is part of the mix wherever.
And, and that’s good. And I think from where that kind of bleeds over into other parts of the. The value chain is things like ad monetization being critical in terms of your user value and therefore your user acquisition strategy. So we see this from a lot of developers that they really want a kind of a unified lifetime value from both ads and IAP that they can pull together and use to inform their user acquisition strategy, because actually both of these components of your [00:05:00] revenue.
Matter in different amounts, in different kind of countries and different user regions and things like this. So if you’re gonna have maybe a very IEP heavy game in the us, but a much more ad heavy game in, in India, for example. And I think that flexibility and, and the, the desire to, to join the dots on both of those pieces is pretty common among all the developers that that I talk to nowadays.
So I think those are the things that are largest on, on my. How about you?
Jan: I could maybe just jump in quickly and, and give a quick feedback on that, cuz I think it’s, it’s still very much driven by the game stronger. So like if you look into casual, hyper casual mid core hardcore games, cetera, I think it didn’t change that much over the last year, because think it’s like, like when you look into, let’s say.
Casino games, Midco games. It’s still not really that established yet that the ads are making such a big revenue in there. Right? It’s mostly, I would say casual and, and hyper casual games, but I think as an industry, because hyper casual became so big over the last two, four years or so. [00:06:00] I think that’s why it’s.
Such more public and, and widely accepted topic that everyone’s talking about that. But I think it’s, it’s really about this rise of hyper casual and casual games becoming more established with the hybrid model as well. But yeah, I think as a, as a whole industry, I think that’s definitely more going on now.
Oh, yeah. Christian, what do you think?
Christian: Yeah, so what we are seeing is, I mean, this is, this is very common. I saw I Google and Facebook seeing in an audio mob as well. You’ve got much, much larger user basis of, of game developers, right? So naturally whether it’s gonna be CPMs in certain formats as well as conversion rates, whether it’s rewarded video, IP, play ads.
They’re not, you know, in the double digits consistently when they first came out, there’s that slow decline. But what we are seeing is that the new ad formats that are coming out. Beforehand, you know, when you had your interstitials to reward it to playable, it was kind of improving on an initial slot.
And I think that’s always gonna be there and it’s always gonna be part of the stack, but there is a new stack coming in where rather than taking [00:07:00] advantage of those pre-built in slots non-intrusive audio ads whether it’s display ads as well. Whether it’s ways that you can bid on rewarded moments without intru intruding on the user experience.
I think that additional stack is gonna interweave with what you are more commonly know I E playable ads, rewarded video ads and just digital, et cetera. Also, when it comes to the way that you use these formats for user acquisition. Obviously, you know, IDFA, wasn’t an apocalypse. It, it wasn’t the most helpful thing that has happened to the ecosystem from a certain perspective.
But it certainly wasn’t an apocalypse. So the audience size just changes in terms of targeting the amount of people that you wanna opt in when you’re on IEP centric game targeting those Wells is gonna be a bit harder. I dunno what Ross can Canton say, world of the street, Google might be doing something similar.
But I guess that’s the topic for another time. But what we are seeing is a massive, massive investment into contextual based solutions as well. Whether it’s info sum gum, gum, branch, we’re talking about hundreds of millions of dollars in investment investment, [00:08:00] into technologies like audio mob. And I definitely think that this, this trend of Acquiring users in a contextual way, a privacy kind of safe or compliant way.
That that’s a massive, massive trend I’ve seen in the investment space over the last two
Joakim: Yeah. Like I, I think one of the things that I’d like to touch base here on is like going into kind of like how you monetize ads, but also how you, how you can use. Ads in different ways. Like you’re talking about like showing ads to particular cohorts, like I’ve heard that the developers who have several merge games now that they’re, they’re more or less.
Not gonna show ads before they know if somebody’s not gonna spend or not. And then if they’re not, then they’re happily gonna show the ads, which means that other emerge games start showing up in their games. And I think that’s, that’s part of like also how you, how you wanna [00:09:00] monetize your players a bit more is to, to rely on retaining them and.
Sending them to other other developers games. But I wanted to hear you, you guys think about like the, the aspects of what. Important when you are doing ad monetization to do it in the right way that it’s most mostly effective for, for your business.
Jan: I mean, I, I would just take your example here, your team because your example is, is more about right.
Competitive ads, right? So you wanna avoid having your. Potentially most important players seeing your direct competitors ads. Yeah. And, but in the end, you’re just delaying the whole at experience the whole at revenues for all players and all campaigns to later point in time. Which makes it just harder for you to monetize in general.
I think it would, if there would be smarter solutions in general, they say, Hey. Maybe I can target specific players more directly and also have different kind of demand for these players to say, Hey, for [00:10:00] the early players, I don’t wanna show my competitor’s ads, but I can still show brand ads or something like that.
Maybe it would be easier to still monetize those early players. But also avoid any kind of churn or retention issues there. I think that’s something which would be really interesting going forward. If there would be ways. Blacklist or blocking certain yeah. Apps or categories for certain ad units, placements, et cetera.
I think that would really interesting sophisticated base of segmentation. Yeah. Yeah. But yeah, I think also general on, on question of what is important for ization, I think it’s always about being curious and competitive. So always challenge everything, basically what you’re doing. Always wonder what can you improve?
What can you change? Like these kind of examples we have now. And then also trying to have this whole holistic approach of really understanding all different kind of aspects. Is it like the user feedback retention ECPM et cetera, et cetera. It’s not just, you wanna improve one KPI. Right. You wanna also understand how does it impact the other areas [00:11:00] of your game?
So I think that’s extremely important. Hmm. Yeah.
Ross: Mm. Yeah. I think that the tools are the important thing there. Right? So it it’s the ability to, I, I, I kinda like the, the challenge, everything aspect and, and where that kind of manifests. In the products. And so that we build and, and where we see developers using them is really like the, the increasing prevalence of AB testing and like anything you wanna do differently, whether it’s filter competitive ads, run a test, whether it’s you wanna introduce a, like a new ad format of a new point, you run a test.
You wanna take two cohorts and, and start showing the ads of the one day versus one. Run a test. Right. And, and all of this technology is now available and pretty much integrated into, into all of the systems, whether it’s the, the mediation platforms, whether it’s the analytics platforms that, that people are choosing to use.
Right. And, and I think that’s made it a lot more. Scientific and people are willing to, to try different things, I think, as a result, because you can dip your toe in the water and, and try a new ad format, right. Maybe you wanna [00:12:00] like try something you’ve not done before you integrate Christian stack or, or try a, like an app open ad or something.
That’s a splash screen at the beginning of the game. You might. Get pushback from your, some of your users or some of your producers and things like this, but you can, you can push back yourself and be like, I’m, I’m gonna run a test. Let’s see. And I think that degree of dynamic content and like ability to, to follow through pretty quickly and make decisions is, is important.
Right. And I, and I think waiting too long to, to Jan’s point about. Like, we’re not gonna show ads for one or two weeks or whatever it is until we decided whether someone’s spending or not. Like you don’t wanna waste those one or two weeks. You can, you can make things clear up front to the users. You can be pretty straightforward that yes, ads are a part of this experience.
Here’s why here’s how they work and tune it from there rather than making kind of dramatic decisions. And which deciding this game will never have ads. It’s like, well, I think there’s, there’s a gray area on every. Decision, you can make about frequency placement, whether you use it at all [00:13:00] type of ad. That’s, that’s pretty much critical to, to all the larger developers now.
And that, that flexibility I think is, is why we see ads very commonly everywhere now, because you can control them and do them well.
Christian: Right. And that was a really good point. Ross and One thing. I always say to new developers, I mean, don’t, don’t get me wrong. Like we, we’ve got a lot of developers that are are inbound now audio, but in our first year it was, you know, the typical startup journey, right.
Persuading them as to the value of the proposition, et cetera. And we’ve kind of boiled it down to simple metrics, right. There’s a reason why IAP rewarded video and any other format that ever’s been created. You’re not gonna get 50% conversions. I E 50% of the people, you know, viewing and then installing or 50% of our users, you know, purchasing in our purchases.
Otherwise, you know, there’ll be limited amount of unicorns in the space. Right. But the point I’m trying to make is that if you take, let’s say rewarded video right on, on a good day, conversions could be eight to 12%, let’s say, right. You still have a lot [00:14:00] of users that aren’t susceptible to that format.
And then you’ve got your whales that you’re gonna be targeting. Maybe on a good day, 4%, maybe a bit higher. Obviously developers are gonna be a bit caged about those numbers, but again, there’s gonna be a large chunk of the users that won’t be susceptible to these formats and some of the most intelligent strategies that that I’ve seen.
Is, you know, we don’t, we don’t say when you integrate audio mob to like, not use anything else, it’s all about stacking the right ad in front of the right kind of user, because some users, for instance, are never going to convert on an ad, never gonna purchase IAP. They’ll never interact replayable or install a games.
And that’s where the gap is. So. I guess in a, in a, in a round of power way the best Ana ad monetization stacks that I’ve seen, they have segmented the right users for the right kind of ad experience so they can get as much incremental revenue as possible.
Joakim: Interesting stuff. Then talking about the, the hot potato, the, the privacy changes which are impacting user acquisition [00:15:00] in gaming, a mobile.
What do you guys think about that impacting ad monetization for the developers, especially the ones who are more reliant on ad monetization who wants to pick that up?
Ross: Everyone’s looking at me. You can’t see this on the call cause it’s a podcast. So I’m, I’m happy to chime in as best I, as best I can on this.
Right. So, and look, I mean, we all went through the apple changes in the last year or two and, and. Just in case people dunno when we are recording this, this is the day after WWDC. So everything that was announced in terms of like changes to scan and, and all the things was literally last night. So please forgive us all, not having opinions on on any of those changes yet.
But, but as, as Christian pointed out earlier, that was a change. It wasn’t an apocalypse and I think we’ve seen different people. Ways of adjusting to this, whether it’s increasing use of first party data increasing focus on cross promotion and other things you can do that are not [00:16:00] dependent on on degraded kind of scan data and so on elsewhere on, on iOS.
Like I I’ve heard a lot about that in the, the time since those those changes happen. So I, I think the, the industry is resilient. I think that’s been shown already because the iOS side of things has, has not. Changed forever off the back of it. There are obviously, there are, there are ripples that are still being Still being observed in terms of the Androids changes that are coming.
I mean, I can, I can talk about it, but I’m not gonna, I’m not gonna kind of blow on away with new news on this side of things. Right. So, I mean, Android is, is actively working with the ecosystem to develop and test new proposals, right? Like there are previews of the APIs that are live on the developer site.
There are conversations that are, are happening with the developers and. Kind of clients and people who build for Android already. But I, I wanna be clear on this one, right? The, the ads teams and this applies both on user acquisition and, and ad monetization. Like we’re finding out what’s happening there.[00:17:00]
When Android make their decisions, it’s the same principle that we’ve applied overall with the Chrome privacy sandbox. And I, I think if anyone’s concerned, Like why we’ve announced multiple years before anything changes and things on the on the Android side of things. It’s cuz we know that these discussions and these developments do take years.
Chrome has been on a multi-year journey towards privacy sandbox technology on web we’re expecting it’ll be at a multi-year journey towards similar technology on Android. And we will respond and share product updates when we have it. But at the end of the day, this is. Something that is being decided by the, the ads teams anywhere inside Google it’s, it’s Android doing the right thing for user privacy in the ecosystem.
So I will always be happy to listen to what people are concerned about here, but I, I don’t have any grand changes. Just know that we, we are Android, definitely wanna be talking to everybody and making sure we build a solution which works for all of. Users advertisers and publishers, but we’ve used a privacy [00:18:00] at the, the forefront there.
I’m not sure if that’s much of an answer, but maybe yeah. Question you have me some follow ups on that.
Jan: Yeah, for sure. I can probably take it further. So I definitely agree with you that you have to really understand what’s going on. Why do you wanna follow the announcement from, from Google?
Exactly. How do you have to prepare for that? What you should change? How do you have to also invest into knowledge and to skills and experts in that? And then you also certainly have to dntiate between the UA and advertiser side and the supply side. Right? So, I mean, I. I cannot talk too much on detail about the side, because I’m the, a ization expert here.
But there’s certainly a lot of things that you have to understand, which you have to change and so on. But also in general, you have to look into popups to get the content from your players, for the personalization. You need to understand what kind of data you still have access to a, which are can kind of getting newly in there, like your website ID from Google coming up.
So I think there’s a few changes. You have to be aware of how to change it on your, on your client, on your game side. Then also you mentioned cross motions and definitely important topic, right? Because you have more ways to know your user [00:19:00] base to center back and forth between games. I think also one big topic, which was coming, coming up more for me because of that was brand ads and brand networks.
So, because those don’t really care about personalization and idea anymore, you’re really looking okay. How, which networks are out there who can help you with that? But also understand kind of, which of your existing networks which are already out there. How are they how much are they relying on the IDs?
So like, Facebook was completely domed on, on iOS. Obviously. I think everyone knows that why other networks, they completely don’t really care about it because they’re already to the contextual side of, of advertising and say, Don’t really differentiate you on the personalization level. So I think it’s really important to understand that.
And I think one thing which Google actually is doing great is to provide data about that. So I see in, in the APOP dashboard, for example, I can really see what is my performance on personalization level versus it’s not personalization. That’s great. So I can really optimize patient that. Which not a lot of networks do that.
But then [00:20:00] I also see, Hey, there’s a huge difference. And I see non personalized ads are having a way worse performance. So I probably put ad up a bit lower in the stack than for the personalized users. So these kind of changes you have to be aware of, and you have to understand how do you optimize that for, for your apps, for your journal and everything.
So I think just knowing everything, being always on top of that and trying to understand how you can fit those, those knowledge to your games, I think is really, I.
Ross: Mm. Yeah. And I think, I think that transparency is very important, Anne, right? Yeah. Like point earlier about like, I would totally recommend you do exactly those tests that you’re talking about, but like two AB test something, you need the data.
So we we’ll continue trying to provide as much transparency as we can there, because this is the only way that people will be able to navigate changes in a kind of scientific and re and reliable, reliable fashion. Yeah, exactly. Yeah, this is always the
Christian: disadvantage of going last. You two covered a lot of good points there.
I mean, just, just, just to add on from a, from a UA [00:21:00] perspective. So some of the game developers that we are we’ve integrated into that rely on IAP, for instance. There is definitely a massive search for how we going to get the right signals in order to almost replace some of that signaling that was lost.
There have been some very clever strategies around getting more first party data like rewarded first party data almost in order to compensate for that. There’s new contextual technology providers as well, like a number eight, for instance, upon that we work with in order to you know, ju justifiably, you know, get the CPMs up on one side, but obviously target the right users on the other.
And I always remember that, you know, one of the world’s largest publishers literally a week after IDFA was announced approach us because. We’re contextual. And one of the first questions was okay, you do brand ads, but I do promote other games. And the fact that 99% of our ads are branding ads.
We started to see that there’s an, an acceptance that branding Ad spend had, had to be a higher of a higher weighting in a, in [00:22:00] a typical, you know, waterfall rather than just pumping in performance ads because of these changes. I think that it would be a a cushion while user acquisition teams kind of figure out how to you know, pump more users into the game.
But I, I, I do, I, I don’t think that you know, it’s gonna cripple the industry, which just be a bit of a teething process over the next, I’d say 18 months or
Ross: so. Right,
Joakim: right. Talking about the, the innovation that now is happening regarding ads in mobile games. Can you Christian start and, and talk about like, what are, what are the things that you’re interested in?
Like what, what are you seeing on the audio space? Like what are developers doing there? And things like that.
Christian: So I’ll say there’s two areas that I’m interested in. One’s a bit controversial. So I’ll start with the audio stuff first. So when it comes to taking advantage of of new signal signaling.
So, I mean, the first assumption that we debunked was the fact that every user you know, they, they, their sound isn’t on, on their phone. And the actual statistic is that most users, [00:23:00] while they have the sound off sound effects off on their game, 61% of users have the sound on the actual device. So that then opened up a plethora of opportunities.
Now the next kind of tra opportunities is how can we use these new contextual audio signals? So for instance, a typical advertiser we’ve seen a thousand percent increase in clickthrough engagement with the ad. Why? Because the users playing the game, we only pick premium games where the retention is, you know, is great.
And the user engagements and the session times are a applicable length. If they decide to click through to the ad, listen through to a certain ad, not unmute. All these different audio intent signals, we can then send the right ads to the right users based on what they hear. And that opens up a four of different opportunities in terms of how to target users with the right ad so that you know, it’s a great experience for the user.
So all the everything to do with using new signals, preferably contextual signals in order to send the right kind of format to the right user. I think it’s fascinating. And, and again, it’s similar to, with number eight in terms. Being able [00:24:00] to identify you know, people that, you know, work at a certain rate or go to the mall a certain, certain times, amount of times a week, contextually.
These are very, very powerful signals that will unlock a lot of revenue in the, in the mobile gaming space. The other thing that I’ll touch upon lightly, because I know. The metaverse and crypto has a certain stigma, cuz everyone’s talking about it. The one thing I’m very interested in is the fact that I’d say over the last 18 months you had a lot of games or gaming companies where the users were attracted to these games because of the the unit economics and the E economy of the game that you can play and earn.
Now we’re seeing a lot of gaming studios that have an amazing track record of making you. Top tier triple mobile games. Now, introducing those same mechanisms. So that’s something I’m gonna be watching very closely where you build, like you, you get a top studio building great games and having a great earning mechanism as well.
And it’s something a mob is actually [00:25:00] looking into, which is why I’m here in the middle east in our R and D app. But yeah, crypto gaming is definitely something that’s also interesting.
Jan: Yeah. Do you wanna pick this the next, yeah, I would, I would actually pick up the, the topic from Christian about the contextual sickness.
So I think that’s a definitely interesting topic because now with like our dependence on IDs being down, furthermore, on episode, probably also in the next few years with Google, I think it’s really important to understand really your context of your players and when the ads are. Requested and played and so on.
And I think there’s, there’s so much more potential to improve. I mean, now everyone is talking about bidding, right? It’s all based on open RTB standard. So in theory, there’s a lot of standards. And then in parameters you can add in there, you can, you can process a lot of data points from your device. Be it like the, the sound option, which question mentioned be about the.
Device model be it about in game first data, first party data, like the impression depths or like the, the progress of a player in a game, or like what kind of character or items they have. I think there’s a lot of things you could maybe[00:26:00] provide to your, to demand partners to the networks and have together figure out how it can leverage this data in a, in a privacy first way.
But still improve the overall performance based on this data. And I think there’s a lot of more potential to be unlocked from all networks, which are already on bidding. And I’m really curious how this all works out in the next yeah. Quarters and years to come. But then also in general about formats, like I mean, obviously we have questionnaire for auto mob, audio, audio ads and we wanna see, okay, how are these audio?
Getting into apps in app and games, which kind of genres are applicable for those, how does it really become a new established format? So I think that’s a really interesting trend here to, to seek entirely new formats and mobile. But also like I think question mentioned before, like native in-game ads, display ads in new game.
Which are more on a, on a programmatic basis. Like, and I think Anzo is one of the biggest providers out there I have, has quite impressed out there. So I think it’s really interesting format. And you have to really understand from a [00:27:00] developer perspective, what is really the right format for your game for your genre, for your audience, etcetera, for your geos, maybe as well.
And really then understand maybe who is out there as a. Great provider who is, was a who’s a front runner, because I think that’s, it’s so early stage. There’s no mediation yet for these kind of formats. There’s no clear winner yet, I would say. So it’s really an early mark where you have to understand it in detail on, on your own.
But then also on the, on the established forward, I would say like in water videos like a lot of networks, like I would say mostly in iron source, Vanga they’re extremely trying to innovate on that side. Kind of combining, let’s say videos with play with interactive end cards and so on and so on.
And so there’s always some kind of great area of what is good user experience, what is not good user user experience. So it’s kind of always changing. And so you always have to be aware of what’s what’s being shown to your games, to your players. What kind of user experience is okay for your players and what is too much or what is too restrictive?
[00:28:00] So I think there’s a lot of changes going on and you really have to understand how these changes are impacting your performance and your user experience.
Ross: That’s, I’ll jump on there, but like, there is definitely handicaps going last as, as Christian called out. Right. Really good points there. I mean, I think from.
From our side at Google, we, we tend to have more of a focus on, on scale than we would do on the very, very bleeding edge. And that kind of creates a, an interesting tension. I mean, look, there’s a, there’s a reason I know Christian cuz they’re doing some interesting stuff from a, an individual format perspective and, but we have to think in, in terms of kind of long term scale and, and users and advertisers and publishers altogether.
So we have to balance that. Overall I think that the things. Innovation wise, we tend to see more stuff either. It’s it’s new formats, it’s new placements or it’s new uses of data. All of which have, have come up already. Right. I mean, new formats, I think you’ve hit the, the nail on the head on the two that are kind of more interesting.
Like we’re obviously kind of looking at the, the audio space and, and following along, trying to enable as much reach as possible for, for Christian and others on the, the platform. I think the, the kind. [00:29:00] Intrinsic integrated stuff that Anzo and frame play and others are doing is also very, very interesting, much harder perhaps to, to measure and track.
But I know a lot of work’s gone into that with the IAB and other kind of standardization there. So like there’s, there are a few upcoming formats that are, that are new in terms of placements. I mean, I think I. We’ve seen some success at scale with, with things like app open apps, right? So, I mean, it’s more like an interstitial, but it’s, it’s when the app is, is initially loaded and it’s a, it’s a branded splash screen effectively.
This is something that was a, a multi-year process for us to get to the scale we’re at now. Very, very common in China. And while I was out there, there was a lot of pressure from the, the local developers to potentially bring a format that is very popular in domestic China, to the rest of the world.
And it took us a while to get comfortable with the fact that this was a great user experience and, and it may not be everywhere, but it is for example, when you’re on a lower spec phone in a region with slightly spottier mobile connection, for example, and you know what your app does, take five, 10 seconds to spin.
And actually no one objects to that kind of experience. And I [00:30:00] think it, it’s a bit of a learning curve to get to, to those placements and. See where they can add value, but we’re like, we’re really pleased with how that’s worked globally and how developers who have, as I said, audiences in different countries are able to app apply different formats to that, that structure.
And we have whole teams now inside Google who do kind of user experience consultations and so on with our developers to help people balance and instrument and test. Those, those kind of rollouts. And we’re seeing a lot of value from that. So that’s, that’s really good to see too. And then the last part is data, right?
And I think the, the first party data piece some developers big enough to do direct sales and, and that’s a, a different business, much more like traditional ad sales cross promotion with data that you own very important. And then the last part I think is Jan was saying like the contextual stuff or, or things that you.
You know about your users that are not the traditional age and demographic piece. It’s like, how often do they play? Like where do they play in terms of other senses, but in terms of other data sources, like number eight, but like [00:31:00] what level they’re at what currency balance they may have. And we’re definitely looking at ways where that kind of unstructured data.
From individual publishers could improve overall monetizations. The, the beauty of machine learning sometimes is you can throw these things at them and you get surprising outputs in terms of the, the impact that can have on your ad monetization. So that that’s an area where we’re definitely spending some time because everyone has data.
I can’t say that everyone knows how to use it. And maybe it’s not possible to be used in some of these scenarios, but we, we think it can be. And we, yeah, we’re definitely spending time on.
Joakim: nice. Excellent thoughts.
Jan: I would probably, yeah. Yeah. I would, I’ll probably add one more topic here which we haven’t touched based on we just add quality.
So I think we, we said already it’s about data. It’s about transparency, right? And in the end, what we, as a, as a publisher get into our game that I think it’s extremely important to understand. We wanna see high quality ads for our players. Right. So we don’t wanna see any scam. We don’t wanna have our block list breach or anything.
We wanna have no [00:32:00] misleading or any inappropriate ads. So there’s, there’s a lot of demand, obviously for high quality stuff being shown to our players. But in reality, it’s, it’s kind of a wide, wide west, right? So there’s not really any. Any police I’m kind of yeah, kind of enforcing any quality.
There’s no way really any standards are applied there. Every advertiser is using safe service tools from every network. It’s kind of, everyone’s just doing what, whatever they want to. So I think that’s a big demand out there for understanding that type, better understanding what campaigns are shown in general to your games.
What is exactly every user seeing? How can you avoid any kind of bad ads being shown to your players? I mean, there have been a few providers in the past for that like a safety K Zula and so on. We’re kind of trying to provide more transparency around that now that it’s moved more, obviously safety K to APPLA and max Zula towards iron source.
So there’s, that’s always changes. And it’s extremely important to understand how we can deal with that, how it can always stay on top of that and, and make sure that your [00:33:00] players are actually happy with what they’re seeing with, with add content. So I think that’s,
Ross: I think we’re lagging slightly on, on the promise there, right?
I mean, in terms of, we know we can do this relatively well on web the more unified the auction becomes the more transparent these things become, the easier it is to log these risks, to understand which creatives will served. The less likely you are to see the same machine zone ad five times running networks.
Right? If you. Bad old days just due to frequency capping and things like this. So like, I, I think that will get better because we know it can be done better when auctions are more unified and, and bid on web. I think we’re behind a little bit as an industry on that at the moment. Yeah. But I think that the promise of transparency and quality control there is real.
And we, we should start to see improvements. I think as. Of the next couple of years, that it’s a very valid point though, right? Yeah. And you see other kind of questions from developers about like, which ad experiences are bad for our users. Like where do we have three clicks to close the interstitial kind of thing?
[00:34:00] Can you give me stats on which ad or which network was showing an ad when my users quit, for example. Right. And actually that was remarkable differences in that distribution of who was the, the ad experience where the user was like, you know I’m not not doing this anymore and I’m gonna do something else.
Those kind of pieces of transparency, I think, are very important for the, the kind of optimization that you’re talking about. Yeah. And again, yeah, we’re not quite there, but we’re, I think everyone’s wants to move in that direction.
Jan: Yeah, I think that that’s really important. You also mentioned one point it’s like it, it’s not only about making sure as a publisher that you’re showing high quality ads right.
To your plate, but it’s also a performance topic. So if you have like five networks in it, everyone is showing five machines on ads. Wha how like is, is that that the first one is converting on the user, right? So it’s extremely unlikely. So. I think there’s definitely high potential. I mean, it’s not just about the publisher providing contextual sickness to the networks and to the advertisers.
Right. But it’s also the other way around that. We also want to understand what kind of ads are show to our players. How can we use that to avoid having machines on [00:35:00] show, like the twentie time already today for the user? So I think there’s a lot of potential to be unlocked with the technology we have already adjust about the willingness of the.
Industry stakeholders. Mostly, I would say networks to really provide this data and also utilize them
Joakim: as the final topic I wanted to come back to, to brand ads. There, there. Becoming more and more prevalent. Now, especially as, as gaming targeted gaming ads are harder to do. How do you see these macro trends like recession the war in Ukraine, like those things affecting the brand advertising.
Let’s go with the order of Christian Ross, and then Jan, you’re gonna do the last one.
Christian: yeah. So I, I remember. I was in New York when, obviously the the in February, when the situation broke in Ukraine, a absolutely terrible, and it’s definitely rocked the world in more ways than one emotionally and financially.
And what we’ve seen unfold until then. I mean, [00:36:00] one thing I was thinking about in terms of how will navigate through the space, it would be very similar to 2020. It was definitely a learning experience kind of getting through that year. And things worked out in 2021. And what we expect to happen is that the brand spend will shift significantly.
So, I mean, if you were to open up a crunch based report, and I’ve mentioned multiple times about, you know, investment oriented data trends, cause it really helps stocks and general companies navigate the space. You see that eCommerce companies and anything to do with financial lending. All cut completely.
And it’s, it is like what happened in 2008 that spend drops and then certain advertising a spend verticals are drop as well, but then there are significant shifts in what we call COVID resistant brand verticals. And we did a lot of research in 2020. So Usually, what would, what would happen is that there would be some, some hesitance in terms of, you know, fill rates that you’d get from brand based ad networks.
But as long as you shift towards more COVID resistant, resistant verticals, like entertainment, for [00:37:00] instance, is an obvious one or home improvement. I, I think we won’t see a drop it’s just as, as long as any contextual or brand based ad network shifts their attention to the right verticals. Before and the fact and by the fact I’m talking about a global recession, then it should be fine.
And I guess on that, on that point, in terms of the uncertainty that’s been caused in global markets, it’s affected public markets and now the private sector throughout the whole chain I I’d say the impending global recession. It is just gonna shift where the brand dollars are gonna come from rather than tank it completely like it did in in 2020.
The other thing as well is again, like, I, I definitely think that the world is going through like an out of the frying pan into the fire into the fire kind of situation. And there will probably be more gamers as a result of this, this, this upcoming recession, which is Actually gonna be beneficial for for brand advertisers and branding ad networks, as long as they they shift their attention quickly.[00:38:00]
Ross: Okay, interesting. So I, I I’ll offer a bit of a counterpoint to some of that. So I think brand is gonna become more important. Right. I, I think it’s that we’ve been waiting for brand to be more important in mobile for the decade or so that we’ve, we’ve all been, been looking at this. I would. So, I suppose one, one caution retail.
I, I remember I was involved in the, the launch of of TrueView and rewarded slots at Google. Right? So like we, we got rewarded ads out the door, like created a whole bunch of new video inventory. And then we’ve obviously have TrueView, which is the, the brand advertising format on, on YouTube. We were like, okay, brilliant.
Let’s, let’s join these two kind of let’s join the pipes on this and it’ll be great. Like everyone’s gonna get a huge amount more reach. And I remember kind of, we, we did all this and we launched it and so on. And then we sat there a few weeks after trying to work out like. Why, why is it not that big? And then you look at the pricing of, for like how rewarded ads and some of these other things were, and it’s just like, You know, if you’re going, ya will know what kind of he sets in his price, floors and so on for awarded, like it, it’s a very, very well [00:39:00] targeted format.
That’s very, very high and it kind of squeezed out a lot of the brand spend even, even then. So like we, and we haven’t seen those, the performance on those formats and so on fall away, tremendously on the performance side. So like brand needs to be pretty punchy actually to beat out some of the mobile performance formats.
And for that to be the case, I think. The real focus that we’ve seen is like a lot more effort on the kind of instrumentation and the brand tracking and viewability side of things like those standards the IAB work. And so on, that’s been done about like what constitutes viewability. Like I said, it’s a very hard problem in the 3d space, for example, but like they put a lot of effort into it.
Like all of those are table stakes for brand spend to move across. Safely and with confidence, I think. And I think that’s the area where there’s been a lot of, a lot of progress in terms of standardizing and making it easy for people just to buy across different different environments and feel comfortable with them.
And we also do see performance advertisers dabbling into brand as well. Right. Like, and, and this is [00:40:00] because they’ve got more use to video advertising as the way of kind of securing rewarded ads and, and things like this. But. There is also just kind of general brand awareness that historically performance based advertisers are beginning to look at.
And I think that also kind of speaks like that kind of does back to your point up Christian, like there’s gonna be more brand spend. It might not all be the same verticals that we’ve always looked at. And some of it may come more from the, from the performance side of things. Once you can do the tracking and, and kind of realize that that spend does have value even in a performance context.
And so hopefully that convergence will keep the whole space. Keep it pretty healthy. If we can manage all of those, those trends at the same time. Yeah.
Jan: Yeah. I totally agree with you what you said about the, the price limitations of brand ads when you come to mobile endgame, waterfalls and competition with the performance ads.
Right? So usually what we see is the performance ads have much, much higher CPM. So it’s really hard to compete with that from brand ads. But then there’s a lot of [00:41:00] Supply available a lot of impressions available at more like the submitter or lower end of the waterfall. So there’s still a good chance to phase that with your brand at, and kind of provide stability.
But then there’s this kind of trends coming in. Right. So we have seen the trend from COVID for the last two years. Obviously a lot of changes with certain industry being pushed on a lot. Other industries having really benefit from that, like home entertainment Netflix co Spotify gaming, etcetera.
Like we have seen a huge push in the beginning of first half of, of, of the pandemic. And now I think actually it’s a different situation since Ukraine was started and like a few. A few trends came together now. I mean, a lot of people kind of got out of the cohort require enforcement kind of restrictions.
So they were getting out of home again. They wanted to do stuff at all outside again with their friends at events, concerts, et cetera. So there was, there was less demand for virtual and digital stuff anymore. Why at the same time China is extremely restrictive, especially at Shanghai. So there’s a lot of supply [00:42:00] chain limitations at the same time.
Yeah. Russia, Ukraine has a lot of issues with the resources, guests, all cetera. So those prices are going up. Inflation is going up recession there. A lot of companies are just trying to kind of hold their, their marketing budgets, wait and see what’s going on and, and how to move further. And, and that’s also what I’m seeing on our side.
And also from other publishers, I have talked a lot of publishers. Two three months. And like, everyone is saying the same, Hey, our ECPA have tanked. So it’s, it’s just like you, you expect this kind of situation. Right. And in Q1, so, you know, okay. Q4 to Q1 is going lower. It’s kind of the expected season of trend.
But then you would expect towards like March, April, may that it’s going up again, but actually the opposite happened. So it went on even further. It depends getting even lower and he was just standing there wondering, okay. Fact that’s going on here. How can I explain that to my management? How can I explain that?
To invest et cetera. And, but it’s just, the whole economy is struggling right now. And it’s not really clear when that’s changing, right? So the, the whole situation is a bit [00:43:00] unclear. So we have to see, have to understand and see how we can deal with that, how we can still find ways to improve and how we can then move on to some improvements again.
When the whole economy is changing again. But right now I think it’s very uncertain for a lot of people in the industry.
Joakim: Got it. I think this is like, This covers what we wanted to talk about today. So I I’ll thank you guys so much for, for coming on on the show and doing this with me. This was really good treat and let’s, let’s try to do it again at some point when, when the things have moved forward.
So thanks a lot guys. And I’ll, I’ll put some, your names and LinkedIn links into the show notes so people can reach out if, if there’s anything. So thanks.
Christian: Thanks having
Ross: us. Great. Thank you. I appreciate it. Thank you.
Joakim: Thanks, bye. Bye.
Joakim: Thanks again to my guests for joining this show. If you have time, [00:44:00] please go and sign up to a email@example.com.
Slash newsletter. Since every Friday morning, I send out a piece on gaming startups, what I’ve experienced recently as an investor, things that I’m seeing and thinking about. I really wanna share a lot to you guys. So if you have time, please subscribe to the newsletter. That would be awesome. And I’ll see you next week on the podcast.
Take care. Bye bye.