Bidding for all: Three reasons why gaming publishers should adopt app bidding

While much of 2020 saw the world stand still, the mobile gaming industry did everything but. Newzoo's Global Mobile Market report [Newzoo, ; JUL/2020] found that global gaming markets will generate $77.2 billion in revenue this year, a 13% year-on-year increase. With this growth comes new opportunities for gaming publishers of all sizes to monetise their apps, along with evolving solutions that can make a significant difference to ad operations in smaller businesses.

The waterfall method for in-app advertising, which has long been the dominant practice, is now seen by many as a cumbersome process that stifles competition by cutting out willing bidders. This is why many are moving to app bidding.

The last three years have seen high adoption of and strong results from bidding in support of the long-term health of the developer ecosystem. This trend will continue as publishers of all sizes switch to bidding to take full advantage of the revenue and operational benefits.

Here are three reasons why you shouldn't wait any longer to realise the potential of bidding.

1. Increased ad revenue

In a recent Audience Network report, The New Era in Ad Monetization: How App Bidding is Transforming Businesses, we highlighted businesses experience up to a 27% increase in average revenue per daily active user through switching to app bidding [Game Insight, GSN Games and FUN-GI internal data, ARPDAU lift data; JUN/2020].

For businesses with small teams, app bidding allows you to quickly monetise and generate the most in-app advertising from day one, with no need to adjust and optimise the position of bidding networks. Many games have a short life span and being able to react to your game's performance is vital to maximising profits. Understanding how your users are responding to ads, and how much value you can extract from the game, makes it easier for publishers of all sizes to adjust their monetising strategy or UX accordingly. This is a great gateway for in-app purchase heavy publishers who are getting started with in-app advertising models.

Mobile game publisher Lucky Kat increased its average effective cost per thousand impressions by about 50% after switching to bidding with Facebook Audience Network. Bente Bolland, UA and monetisation manager at Lucky Kat, said: "We A/B tested using Facebook Bidding versus Facebook traditional line items for a week. Our ARPDAU increased by up to 20%. It now takes up one third of our impressions and keeps our ARPDAU stable. (Lucky Kat internal data; 2020)

For game publishers looking at how to manage in-app monetisation, getting a fair price for inventory is important. As with all sales models, the higher the demand - the higher the price. By using a real-time auction system, app bidding allows all demand sources to bid for each impression at the same time, and this increased competition effectively drives up the price of the bids, while allowing advertisers an equal chance at each impression.

2. Improved operational efficiency

According to a report from IDC, technical developments have led to app bidding becoming easier and more efficient to implement and maintain than it has been in recent years, making it a friendlier option for smaller publishers too [IDC,The Current State of Header Bidding and In-App Bidding; APR/2020].

By adopting app bidding, publishers can use this time to focus on more impactful areas of the business, including optimising the app experience, easily integrating new demand partners, and growing user acquisition. For example, after adopting app bidding, social game developer Pixel Federation cut 30% of its time spent managing in-app ads by not having to manually manage its Audience Network placements in the waterfall system. (Pixel Federation internal data; 2020)

As an example, hyper-casual developer Voodoo has cut down time spent on ad operations by 10% since moving to bidding. Rather than spending this time on day-to-day waterfall maintenance, the team can focus their efforts on A/B testing ad integration, new mediation and ad network features, and optimising average revenue per daily active user. (Voodoo internal data; 2020)

These kinds of efficiencies aren't only for the larger market-leaders, growing publishers have also seen major efficiencies from using app bidding. As a growing publisher, Lucky Kat not only benefited from increased ad performance, but it also cut down time spent on ad-ops by around one hour a week per game

3. Access to more demand

With app bidding, publishers can easily add as many demand sources as they like, with minimal impact on operational resources, which is particularly beneficial for smaller publishers. And because it's a flat model, app bidding can significantly reduce latency and improve user experience. On average, we've seen that bidding can reduce ad latency between 38% and 88% compared to the waterfall method. [Facebook Internal Data, based on waterfalls that call Audience Network between 2 and 10 times, APR/2020]

As more game publishers begin to realise its potential, app bidding is fast becoming the best-in-class approach to in-app monetisation. While the ten largest publishers using Audience Network to monetise are now using bidding, it's also opened up new opportunities for smaller publishers. Not only does app bidding allow publishers to realise operational efficiencies and increase revenues, it will also contribute towards a fairer advertising ecosystem for both buyers and sellers.

We truly see bidding as the future for in-app advertising. To support publishers across all industries we have created a number of resources outlining how publishers can get started with app bidding today.

Author Bio: Marc Milowski is the strategic partner manager for Adtech Partnerships at Facebook Audience Network.