The Fresh Planet approach to video ads: ‘Don’t interrupt the game session’

SongPop game developer FreshPlanet buckets their audience into two camps: Those that make in-app purchases and those that watch ads. Why? Power ups–sold for a dollar a pop–are simply more profitable, but that revenue comes from just about 2 percent of their audience.

“Fifty percent of our revenue is coming from advertising, but it comes from the 98 percent of users who never buy anything,” said Mathieu Nouzarieth, CEO of Fresh Planet.

This model should feel familiar to publishers searching to develop their own “freemium” models. Slate, The Financial Times, Time Inc. and others all experiment with ways to draw readers past their paywalls with free content. But the 98 percent of readers who won’t shell out the cash for subscriptions or microtransactions remain the most profitable.

Ensuring that these users are engaged and racking up CPMs has been mobile game makers’–and other publishers’–chief challenge. Here are some of their tips and tricks to making money from free content, and some advice on how non-gaming publishers can use them to level up.

Don’t interrupt the game session

The golden rule is simple: “Don’t interrupt the game session,” in Nouzarieth’s words. “Don’t put it in the middle; put the ads at the end. Make sure someone has finished what they want to do and, before they start something new, you have an opportunity to add in a static or video interstitial.”

Annoying pop-ups and gnarly in-article ads have long been go-to ad formats for digital readers, and the bane of user experience. Game developers aren’t innocent, of course.

“Some [developers] are making it so that when you launch the game, even before seeing anything, you have a full-screen interstitial,” he continued. But this can feel like a nasty bait-and-switch. “You have to be very careful. It’s a balance between ad monetization and user engagement.”

One publisher that focuses on this kind of end-of-play interaction is Quartz, whose infinite scroll offers readers a beautifully wide page layout with plenty of white space. It’s easy on the eyes, and the in-article placement is relatively small. Readers who arrive at the end of the article are met with a more immersive, sometimes video-inclusive ad.

Give them a reason to watch

Advertisers covet a captive audience, and non-skippable ads deliver on that goal. As such, they’re more profitable for all publishers. But game developers take an interesting approach, offering “rewarded videos” to give viewers a reason to watch. In exchange for their attention, gamers receive some form of in-game currency or virtual good.

“You have five energy in Rock On!” Nouzarieth said of his company’s music-themed game. “Every time you play, it’s minus one, and when you have no more, you can either wait 20 minutes or, if you watch a non-skippable 60-second video, we can give you one energy and you can play again. Just one. It’s worked incredibly for monetization.”

The key, said Eric Seufert, vp of user acquisition and engagement at Rovio, the maker of Angry Birds, is that the benefit of watching the ad has to be well-integrated: “How do we actually think about how the reward enhances their experience and actually makes them want to play the game even more?”

Research from AdColony suggests that the gambit works: Users who made no prior in-app purchase were 4x more likely to do so after being rewarded by a value exchange video ad; previous in-app purchasers were 2x more likely.

While publishers don’t have virtual cash or power-ups to play with, there are ways they can join the monetization game with a little creative thinking.

“Take The New York Times,” Seufert said. “They had Snowfall experimenting with in-page visualizations and interactivity. That was a premium feature on a regular, beautifully-written and informative article. Why not offer that in exchange for watching an ad?”

Make the advertiser a hero

Publishers are very careful about cordoning off sponsored content, avoiding any crossover with their Very Important Journalism. But game makers have no such obligations.

“For Honda, we added an extra playlist called ‘Road Trip’ that relates to their campaign,” said Nouzarieth of an integration with SongPop. “At the end of the session, you have a full-screen interstitial where you can like the brand on Facebook or follow them on Twitter.”

In addition to developing complementary content for sponsors, game developers can turn in-game currency into a native message from the sponsor: “We have rescue or reward-type moments where you’re unexpectedly receiving coins from a brand such as Coca-Cola,” said Puzzle Social’s Jeb Balise.

“Coca-Cola comes along and says, ‘Hey, you’re out of coins. Great job: Here are a few more!’ The user feels pretty good about those moments as well.”

Publishers have a similar monetization opportunity, especially those that drive subscriptions by limiting the number of free articles per month. When a meter is surpassed, advertisers can swoop in and offer non-subscribers an exchange: watch one video ad for access to one more article or other gated content. It’s a life raft, essentially saying, “Hey, you’ve reached your content limit for the week. Here’s more– brought to you by Blackrock Financial.”

The stats say it all: The top 100 grossing apps on the App Store and Google Play are nearly all from game developers who use a combination of in-app purchases and value exchange video ads. It’s time for other publishers to pay attention.

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