Futureplay Is All-In on Rewarded Ads for Its Mobile Games
Ad-supported games make up only a small portion of the $35 billion mobile gaming market. But could rewarded video ads be the game changer that makes mobile ad monetization as effective as IAPs? Finland-based Futureplay Games is betting its business that the answer is “yes.”
In F2P monetization, developers design their games so that players who don’t pay can’t progress as quickly as those who do. Rewarded ads or “view-to-play”—a term coined by Futureplay Games—is a spin on the F2P formula that puts ad monetization first: ads provide the bonuses, speedups and unlocks, even at the cost of losing in-app-purchase revenue.
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In general, F2P games pull in stratospheric revenues by focusing on whales who can spend thousands of dollars each. Analysts estimate that mobile strategy games such as Game of War earn as much as $550 per month, per player. Ads can’t earn hundreds per a player—but their other advantages are rapidly becoming a viable monetization model.
Developing an ad philosophy
Ads have been in games for years, even in the early mobile market, with inconvenient banner ads and pop-ups. Many newer, F2P games are also enhancing their income with rewarded video ads. But Futureplay CEO Jami Laes and his team noticed these games often made mistakes in their reward ad strategy, like showing rewarded ads to players who paid—inadvertently punishing people who still wanted the rewards that ad views offered.
“We thought everyone was overlooking how fast the growth is for rewarded ads in particular,” Laes says. “If we took it as our mission to do it right, we could be the category leaders.”
During development and release of their first two idle games, Farm Away and Build Away, Futureplay’s founders came up with a list of ad best practices:
- Make every ad opt-in; never force players to view an ad.
- Create ads that feel natural to the theme, like Farm Away‘s ads that trigger rain clouds or sunshine.
- Use positive reinforcement, such as earnings bonuses, rather than loss aversion, like an ad offering a save after the player dies.
- Don’t let in-app purchases and ads compete with each other.
Laes and team went all-in on their ad strategy—and it worked. Mobile game ads, Futureplay discovered, monetized much more consistently than other monetization techniques. For IAP, for example, monetizing five percent of players is considered fantastic. By contrast, 80 percent of Futureplay’s players watch ads each day they play, meaning a large majority of players were now effectively paying players.
“The games we’ve built seem to have a longer shelf life than anticipated, they last longer and monetize better,” Laes says.
Some of Futureplay’s players even watch ads repeatedly—you might call them “ad whales.” To date, FuturePlay has raised $1.5 million in venture capital, netted over seven million downloads and makes about 70 percent of its revenue from mobile game video ads.
Their ad revenue ended up being so high that it could support ad-based user acquisition. In other words, FuturePlay makes so much money advertising other people’s games that they can profitably advertise their own games. So far, Futureplay has spent $1.5 million of its earnings on paid mobile user acquisition.
Futureplay expects rewarded ads to keep growing in importance—not only for ad-supported games, but also for advertisers. “What we’ve been hearing from the ad networks as well is that our ads convert very well, so the inventory is very lucrative for advertisers,” Laes says.
This trend is even opening up new markets: In China, for instance, the private app stores who control the Android game market don’t always allow ads that show other games. But the increasing presence of big consumer brands like soft drink companies in rewarded ads means that the Chinese market could soon offer its own chunk of revenue to companies like Futureplay.
But the most exciting trend will be the growth of view-to-play into new game genres. “I think that we’re only seeing the first version of what can be done,” Laes suggests. “It was the same for F2P in its early days, very simple and straightforward, and a lot of the models have evolved immensely over the past five years. A lot of people thought you couldn’t do certain genres or mechanics. I think the same will be true for view-to-play.”