Exclusive: Mobile game developers allowing ads for games of the same genre can increase ad revenue without loss in retention, says PlayHaven

Mobile game developers that allow ads for games of the same genre can increase revenue by up to 196 percent without loss in retention when compared to only displaying ads from games of different genres, according to a report from PlayHaven.

Mobile game lifetime value (LTV) maximization platform PlayHaven said one of its partners increased net eCPMs (effective cost per thousand impressions) on iPhone by 85 percent and iPad by 174 percent by allowing same genre ads, while still maintaining the same level of retention. PlayHaven vice president of business operations Brian Doxtator couldn’t name the game in question, but he did add that the game fell under the casino genre — slots, bingo or poker. For PlayHaven’s “largest” games in its portfolio, ad performance for same-genre advertisers was 166 percent higher, with user retention remaining very much the same.

Overall, same genre ads increase ad revenue by 105 percent, while ads of different genre games increase ad revenue by 39 percent. Retention-wise, ads of the same genre was at 83 percent and 80 percent for different genre.

Doxtator told Inside Mobile Apps that mobile game developers have two fears when it comes to allowing ads for games of the same genre in their games. The first is that developers don’t want to send their users to any competitors. The second is that their user base will be cannibalized by a game of a similiar genre.

“This report is what were trying to refute — that second part,” he says. “There will always be competitive advantages or disadvantages to promoting your competitors’ games, but the relationship to actual retention and the data we’re seeing, a lot of it doesn’t really play out.”

PlayHaven also gave some insight into the best time to place ads promoting other games of the same genre, while still keeping retention high. Doxtator said the best place is typically whenever a developer can qualify an engagement such as after a tutorial or a particular level, not at the beginning of a game or when a user first opens an app.

In contrast, one particular game on PlayHaven’s network displayed ads immediately on game launch, without waiting for users to pass any engagement threshold, so retention was 36 percent lower than that of similar games that place ads after engagement markers. According to the report, non-engaged users have a 58 percent retention rate while engaged users have a 91 percent retention rate.

“At the beginning, you don’t know if this is a retained user or if this an engaged user, but at certain points throughout your game, you do know,” says Doxtator. “It really varies too much to state specifically where, but just that you are having that behind action of engagement or retention. We’ve shown that because it’s a pre-qualified user, they end up coming back a lot more often.”

Data from PlayHaven’s report comes from more than 50 advertised games within 10 “major” games from top publishers on PlayHaven’s platform. PlayHaven chose six different genres and took the top two genres that either overlapped or converted. They analyzed the retention rate of users that saw, clicked or converted on the two genres taking the majority of the two genres’ ad inventory. PlayHaven currently has more than 70 million active users on its platform coming from 4,000 games by publishers including Pocket Gems, Glu Mobile and Digital Chocolate.

“We’ve proven here that we can generate a lot of revenue while sending users to your competitors because you get them back at a higher rate than otherwise,” says Doxtator.