At Gamefest, Craig Chapple from moderated a panel with guest speakers Sally Lu from JamCity, Alexandre Tan from Gameloft, Jeff Gurian from Kongregate, and Brian Truman from GSN Games. Together, they discussed various topics such as user acquisition, mobile game publishing, mergers and acquisitions in the game industry, and in-game brand advertising.

1. How are you working with brand advertisers?

Alexandre Tan: A few years ago, we understood that while running gaming ads on games is great, the reality is that the big ad revenue is with brands - brands that advertise on TV, in print, on the web. This is the holy grail. How could we capture part of that money? We needed to restructure ourselves.

Now we internalize a lot of the brand advertising business we do. We created our own ad server, our own programmatic SSP, opened an internal creative agency with 100+ people that develop interactive formats just for brands, and hired an in-house sales team.

At Gameloft, brand ads take precedence over gaming advertising, which are lower in our waterfall. In Italy, our branded rewarded videos deliver eCPMs of $150. In Germany, it’s $90-100.

Jeff Gurian: We view brand dollars as backfill, as our brand CPMs haven’t caught up to performance CPMs yet. We’ll slide in brands at the end of the waterfall.

Brian Truman: We do a lot of brand advertising at GSN Games. But we have one distinct advantage, which is that we also have a cable network in the US, with a sales team selling 30 second spots to media agencies. This creates opportunities for us that don’t exist for medium-sized publishers.

I would argue Jeff’s point about CPMs. We’re seeing for CPMs upwards of $150 for brands. I think the brand money is going to come, we just need to be positioned to take it when it does.

2. What’s preventing brands from buying in-game inventory?

Sally Lu: Brands don’t understand the inventory of the gaming industry yet. They need to understand that they’re buying audiences, not just gamers. JamCity relies on platforms and partners like ironSource to get into that space. We need to work together as an industry educate brands that gaming inventory is actually good quality.

Alexander Tan: Anyone who’s been working with media agencies understands how difficult it is to get brand demand. You talk to media agencies about mobile and they say, “we know mobile.” Then you talk about mobile apps, and they say “we know mobile web but how different can apps be?” Then you say talk about mobile in-app games, and that’s it - you’ve lost them.

Games in some brand circles is still a swear word. They still think games are played by pimply teenagers in their rooms - not by consumers who buy clothes, eat, and travel. It’s up to us to change their mindset.

It’s a marathon. But it’s one that’s really worth running, because the stakes are huge.

3. How can games convince brands to work together?

Alexander Tan: If you really want to get into the brand advertising space, you need to prove that your game is more transparent than anyone else’s. Transparency is a key component for media agencies and brands. That means providing viewability measurements, removing fraud from your traffic, and sharing as many KPIs as you can. Ultimately, we as games are going to be judged on how much engagement we can create for brands.

Show them that they can get them an engagement rate of 50-70% with branded playable ad units. Show them that rewarded videos have completion rates of more than 95%. You’re basically securing a 30-40 second engagement with their brand.

The beauty of mobile games is that we can pass metrics that show engagement. Brands spend billions of dollars on TV ads, but what guarantee do they have that human eyeballs are watching? Zero.

In the past, hesitant brands came to us convinced that completion rates were high in their rewarded videos because users only wanted the reward, and weren’t actually watching the video.

So we put an HTML5 layer on the rewarded video, and gamified moments of action throughout it. Then we went back to the brand and showed them hard data proving that users were engaging with their brand message.

4. What are your key marketing strategies?

Jeff Gurian: The past few years, we’ve had a working mantra that a title needed to be either marketable or featurable. We had a lot of success with featured titles that couldn’t be marketable, and just leveraged the power of working with the app stores - getting Game of the Day or Best New Update.

But as featuring has gone down in volume recently, user acquisition has gone up in importance. Now we’re focused on UA as a major growth strategy. It’s the most sustainable growth channel for us.

Alexandre Tan: I would slightly disagree with UA being the most sustainable channel. UA is only one part of the equation. I think as game developers, we have to build on all dimensions. UA is paid - but you also have shared media, earned, and owned. I don’t think we’ve done our job as game developers collectively harvesting these other channels.

Brian Truman: We develop social casino games that are self-sustaining and have a long product lifecycle. Our games are on the market for 5+ years. So when we’re buying users, we’re looking for channels that provide users with long retention, high ARPDAU and high LTV. These are people who play everyday, people who go in and actually deposit revenue.

It’s a very different strategy than a hyper-casual game that’s ad-supported. It’s a matter of knowing your users, having a core demographic, and being able to find them at those key touchpoints.

Jeff Gurian: There are a ton of channels outside paid UA. It’s a question of incrementality and resources. If you have a small team and need to scale fast, UA is an easy way to do that. If you have a large team, you can go out and forge relationships with third-party sites, and focus more heavily on media.

There’s a lot small developers can do in-house on a small budget - like take their profit and reinvest into marketing, whether it’s UA, social, influencer marketing. If small developers want scalable marketing, they generally have to go to a third-party like a publisher.

5. How is the rise of hyper-casual impacting the industry?

Alexandre Tan: There’s still the risk that OTT platform owners will suddenly put a stop to hyper-casual games. Will Apple and Google let these games continue growing? They’re not taking any revenue, since hyper-casual games are mostly ad funded.

6. How data-driving are your games? How do you identify the hits?

Sally Lu: We are extremely data-driven. Everything is about numbers. We spend a lot of time on data mining - understanding how users perform and behave in the games, and giving them the best content based on that data.

Brian Truman: As far as identifying hits, we do a lot of testing - unlike hyper-casual, where after a week you decide to trash it or move on. We launch a game with a 1 year plan, and only publish 1 or 2 games a year.

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