New study finds that video ads are the most effective format to capture user attention.
A new study by MOLOCOOpens a new window , a programmatic advertising and machine learning company, found that video ads have the lost cost per payer (CPP) of all formats and drive the highest number of installs per 1,000 impressions. The study titled “Mobile Ad Formats Performance Report: Benchmarks for Casual Games,â€Â explored how the four most common ad formats – native, banners, interstitials, and videos perform across key ad metrics.
Mobile Adtech: Key Trends Driving the Industry
Attracting high-value players comes down to delivering the right ad at the right time. In many cases, that depends on the strategic prioritization of ad formats that enable the kind of creative most likely to resonate with a target audience.
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The tried-and-true ad formats that have always powered the world of mobile advertising are not likely to change, especially as organizations like Interactive Advertising Bureau (IAB) continue to push for standardization. As targeting capabilities fluctuate, mobile DSPs like MOLOCO will adapt their targeting algorithms to rely on whatever data is available, but the efficacy of formats remains comparatively constant. By honing in on the most effective ad formats and optimizing targeting with machine learning, mobile game advertisers can achieve greater ROAS and retention.
The study’s focus on casual games is interesting because the category represents a major area of opportunity. It’s been steadily growing over the past decade and recently experienced a 45% surge in downloads as a result of the COVID-19 pandemic. Data below reveals which mobile programmatic ad formats drive the most installs and IAPs for casual games.
Which Ad Formats Yield the Highest Number of Conversions for Casual Games?
When it comes to conversions, the format winner is video, which drives an IPM well above other formats. The study found that video ad creative generated an install per mile (IPM) rate of 2.63. This leads us to believe that:
- Video ad creative is the best way to capture user attention.
- Mobile gameplay footage is a far more powerful draw than static imagery.
It is important to note that movement alone is not enough to garner installs. The majority of mobile ads we reviewed used live gameplay in the context of the video. The highest impact ads also told a story, taking the viewer through a narrative and emotional arc. By having ads that show the game’s mechanics, users tend to get a real sense of what it would be like playing the game, which encourages downloads. This approach is particularly effective for social casino games — showing a jackpot or a big win can entice new users to play themselves.
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Video’s success does not mean other creative ad formats should be ignored. Interstitial stands out as a format with the quickest days before the first purchase average (0.72 days). Unfortunately, interstitial ads are not without drawbacks. In the casual games market, it claims the lowest three, seven, and 30-day ROAS rates of ad creative. In comparison, a video has the second-highest days before the first purchase average at 2.19 and a higher ROAS.
At 2.8 days, native ads show the longest average number of days before the first purchase. One potential reason behind this trend is that users encounter native ads in the middle of other content.
Unlike when a user watches a video or notices a banner ad above or below their content, native ads often disrupt the flow of their attention. Those who did divert their attention likely stopped scrolling because the ad creative triggered an impulse — but impulse installers are not always quality users over the long term.
Which Ad Formats Are the Most Cost-Effective for Casual Games?
When it comes to cost efficiency, banner and video ads have the lowest CPP of all ad creatives. By contrast, interstitial ads have the highest CPP partly due to the format’s low install-to-purchase rate. The high CPP of both interstitial and native ad formats suggests that users respond poorly to a creative that actively disrupts their content.
ROAS can fluctuate significantly over time, depending on how many users remain engaged with the app while making in-app purchases. When looking at the three, seven, and 30-day windows, banner and video ads consistently rank the top two creative formats.
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Banners have the highest 30-day ROAS at 21.58%. However, they have comparatively low impressions per mile (IPM). This dynamic may suggest that banner ads are more susceptible to organic poaching — a type of ad fraud in which organic installs are misattributed for the benefit of a publisher.
When analyzed as a whole, users are most likely to retain an app after installing through an interstitial or banner ad. Video ad retention appears lower by comparison, which seems to clash with ROAS findings at first glance.
The difference resolves itself once we consider in-app payment events. Users who install apps by clicking on video ads are retained at an above-average rate for the first week. After thirty days, an impressive 45.92% of users remain with the app, highlighting the continued value and efficiency of video ads.
Conclusion
Each creative format has its benefits and drawbacks when applied to casual games ad campaigns. On the whole, however, video ads stand out because they consistently drive installs and offer a strong ROAS at a reasonable price. Other ad formats — particularly banners — are ideal for reaching an audience that typically engages with the category or is ready to re-engage.
Whatever the campaign, it is crucial for app marketers to target users with the most effective formats at scale to maximize ROAS. The ultimate goal is to present the right app to the right person in the right ad format — which is not always easy. Solutions like MOLOCO can help marketers leverage dynamic creatives to customize art in real-time based on live data, build scalable and accurate lookalikes faster, capture users with retargeting, and optimize ads in real-time.