Study: Marketers investing big on in-app ads but still missing out on mobile gaming market

As mobile phones find themselves in the hands of more and more consumers in the APAC region with longer periods of screen time, 70% of APAC marketers find themselves incorporating in-app ads in their marketing strategy. Especially in Singapore where users spend about five hours daily on mobile phones, roughly an hour above the global average, 88% of Singapore marketers advertise in-app, the highest in the region. These were the results of PubMatic’s latest study on the trends in in-app advertising among agencies in Singapore, South Korea and Japan.

Don't miss: Why in-game ads often cause mobile gamers to quit playing

The study also revealed that in-app advertisements are paying off for brands with 79% of marketers seeing improved brand awareness, while 66% of marketers see an increased returns-on-investment. While performance-focused buyers are more likely to likely to advertise in-app than brand buyers, at 77% and 60% respectively, the benefits of in-app advertising depend on the maturity of the mobile advertising market.

For example, 92% of Japanese mobile marketers reported an improvement in brand awareness, but only 40% noticed an increased return on their ROI. In contrast, Singapore’s more mature mobile advertising market sees an 84% increase in ROI despite a 75% improvement in brand awareness.

Marketing budgets shift into mobile gaming

Currently, 67% of global internet users are mobile gamers, and it comes as no surprise that 77% of Singapore marketers are spending on in-game ads. Additionally, the gap between performance and brand buyers widens when it comes to in-game advertising with 71% and 32% respectively.

Interestingly, in-game advertisers place most of their ads in action-oriented games, instead of casual games with puzzle genre games being the most played game genre. This misalignment in consumption and advertising budgets highlights that flexibility must be provided for buyers to spend on different game genres that have varied opportunities.

In fact, the top five most played gaming genre share a similar market share with puzzle representing 25%, adventure, and match games representing 23% while arcade and racing games make up 20% and 19% respectively.

While performance ads dominate in-game advertising, 59% of marketers report that the biggest appeal in in-game advertising is the ability to create positive associations of their brand with mobile gamers.

Other reasons marketers have cited for advertising in-game include its wide target audience range, diverse ad formats and its effectiveness in capturing attention.

Marketers in Singapore are also the most enthused about in-game marketing, with 38% saying they will increase spend “significantly,” and 36% to increase “slightly”.

Misconceptions about mobile gamers

Despite in-game advertising being a valuable touchpoint, marketers are reluctant to invest in mobile gaming ads with 48% citing that it does not align with company or brand values. 38% of marketers also said that their target audience does not align with gamers.

However, issues concerning target audience alignment may be unfounded as, the study also shows that there is a discrepancy between a marketer’s perception of mobile gamers compared to the actual demographic.

Marketers in South Korea and Japan believe gamers to be predominantly male and under 27 years old. According to global user studies, the demographic of an average mobile gamer is almost split equally between men and women.

While there’s a higher penetration of younger players, older players spend more time engaged in video games. Additionally, women in Japan are more likely to be mobile-first gamers, accounting for 55% of the country’s mobile-first gaming community.

Misconceptions around the average mobile gamer can result in missed opportunities to target the higher spending potential of older age groups, and the household decision-making power of women.

Programmatic versus direct buys

Programmatic was the preferred in-app buying option for 62% of advertisers, reflecting the need for agility through data-driven precision, adaptability, and cost-efficiency.

On the other hand, direct buyers cited “audience targeting precision” as the top reason for how they purchase, followed by “more control over ad placement” and “customisable solutions tailored to specific goals of our brand”.

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