Mobile gaming is a vertical that’s being well monetized. That’s one of the reasons Zynga’s stock shot up today.
Why is this particular mobile vertical monetizing so well?
Firstly, there are billions of mobile gamers. And where there’s an audience of that magnitude, brands will follow. And where brands want to spend lots of money on digital media, tech startups will deliver the right advertising product to help them do it.
Now to recap, the right advertising product on mobile IS NOT banner ads.
As I’ve said before, banner ads on mobile suck. From a UI/UX perspective they are interruptive. Due to a lack of targeting data they are rarely relevant. And because of pitiful click-through-rates they fail to deliver any meaningful engagement with the brand.
Instead, the right advertising product on mobile is IS native ads.
A good native ad on mobile adds to the users’ experience. It delivers relevant branded content that users enjoy interacting with. And that leads to authentic engagement with the advertiser, which delivers the requisite ROI.
So it’s no surprise that mobile gaming’s massive audience has driven innovation in native advertising products, which are helping brands in very effective ways.
Forward-thinking ad tech companies like MediaBrix and Kiip have figured out how to “monetize the emotional moments” in games. For example, they’ll help position the brand as a hero to a gamer who might want to “level up” instantly or “save a life”, or needs a virtual “high five” for completing a new highest score – and can now do so by watching a well placed branded video at an appropriate point the game flow. Brands are lapping this up, meaning mobile gaming publishers who show these ads, like Zynga, are making hay.
But by definition, native ads have to be “native” to the underlying content. So an effective native ad in gaming can’t easily be applied to other verticals which might have completely different content types.
Said another way, different verticals with huge user numbers that brands want to engage with will need different native ad formats to be well monetized.
Photos will be the next mobile vertical that is well monetized.
Like the gaming vertical, mobile photos’ massive audience means brands want to engage that audience in effective ways. And innovative, vertical specific native advertising products are beginning to emerge.
— Instagram showed off some gorgeous looking native ads for photos today. Remember: a good native ad on mobile adds to the users’ experience. The predominant user experience on Instagram is to consume content in the stream. So Instagram’s native ad product pushes branded content into the stream that users will enjoy interacting with.
(It’s the visual equivalent of the Promoted Tweet. I’m not sure why Twitter haven’t already rolled out the same product via Cards, but hey).
— At Aviary, we have our own spin on gorgeous native ads for photos. The predominant user experience on Aviary is to create content (often to share on social networks like Instagram). So Aviary’s native ad product places brands right at the center of that content creation experience – by offering branded photo filters, frames and stickers that people can get creative with to make their photos look amazing. We soft-launched the program with Gap and Atlantic Records in April. Even in careful test mode since then, we’ve delivered over 50 million minutes of brand engagement. Full launch is imminent…
— Meanwhile, Snap Chat is developing their own spin on native ads for photos. The predominant user experience on Snap Chat is less about creation or consumption of gorgeous photos, and more about unfiltered visual communication between millions of people. Brands like Taco Bell are very effectively blasting that audience with ads – in a totally native way. The potential here is awesome.
So. Photos will be the next mobile vertical that is well monetized. There are literally billions of mobile photographers. Big brands need to engage that huge audience. And that has driven innovative tech startups like Instagram, Aviary and Snap Chat to deliver the right native advertising product to help them do it.
The obvious question from an investor’s or an entrepreneur’s perspective then is: what’s next?
Charts like this one from Flurry are helpful to show what mobile verticals are picking up massive audiences… which point to where brands need to be… which indicates where there will soon be demand for amazing native ad products that work in those verticals. If I wanted to take a big risk, I’d be betting or building right there right now. But if I wanted to back a sure thing, I’ll be looking at Instagram, Aviary and Snapchat for a while yet ;-)