Interview: Tapjoy is redefining the ad experience on mobile

One of the biggest downfalls of mobile games is the ads. We’ve all downloaded titles from the app stores only to be greeted with a cluttered interface where the advertisements intrude on the experience. They pop up like red flags, and gamers quickly move on.

Tapjoy is changing how we interact with ads on mobile devices through its monetization platform. That means creating a friendlier, less disruptive experience for players and finding smarter ways for developers and advertisers to engage their audience.

Peter Dille, the chief marketing officer of Tapjoy, talked to GameZone about the growing potential and future of mobile advertising. He has a clearer perspective on the platform than some: Before coming to Tapjoy, he worked for THQ and Sony in the console space.

Mobile requires a fresh strategy

“There’s a lot of shared DNA, but the mobile world is very different,” said Dille in a phone call. “Personally, I found it really engaging and exciting to open up your brain a little bit. You have to learn new tricks. There’s new technology, new jargon. And it’s a completely different business model where data is king, and you iterate, and you A/B test, and you continually make very fast decisions.”

More developers are crossing over to mobile, and the audience for smartphone and tablet gaming is getting bigger as well.

“The number of folks who are going to have a console in their house seems to have peaked a few years ago from all the data I’ve seen,” said Dille.

Some mobile strategies are even leaking back into the console development, most notably with microtransactions and free-to-play (consider Dead Space 3 or the increasing number of massively multiplayer online games that have switched over from subscriptions).

It's not a one-way flow of ideas, though, as we’ve seen with Ouya, where mobile is invading the console domain. Dille sounded uncertain about it. “The big guys are having their own challenges, so we’ll see,” he said.

For gamemakers, mobile development is cheaper and development cycles are faster. But that also means more pressure to stand out in the increasingly crowded app stores.

“Unlike a box product where you’ve extracted $60 from the consumer before they’ve even touched it, in this game you’re not extracting any money until you’ve got them hooked,” he said.

“Those decisions are made within a matter of minutes, and frankly, it can be less than that.” Any hiccup can deter a player from sticking with a game.

“On our platform, we see folks on average have 13 to 15 games going at once per month,” said Dille, who added, “That’s a tremendous amount of content that they’re juggling at once, and so there’s just lots of stuff competing for their attention.”

These players aren’t free-loaders, though. Consumers on Tapjoy’s platform are spending $200 a year on purchases in smartphone games and $300 a year in tablet games.

Annoying ads can easily drive those numbers down and convince gamers to quit playing. “A lot of folks are pulling the same techniques that they use from the web and just sticking it onto a mobile device,” said Dille.

The key to successful implementation — and what makes Tapjoy different from other platforms like it — is to enable users to “opt in” and receive rewards for giving their time and attention to an ad rather than forcing one upon them, which can actually create a negative association with a brand.

“We’re not sticking an ad in front of the consumer that they don’t want to see,” he said. “The consumer is choosing which ad to interact with, and in exchange for the consumer’s time, attention, and engagement, we reward them.”

That leads to higher engagement, higher brand lift, higher purchase intent, and higher recall. In other words, allowing players to choose the ads they want is working.

“All of these things are attributed to the fact that A, the consumer opted in and B, they really feel like the brand transcends itself from purely an advertiser to a sponsor of this experience.”

How mobile advertising is getting better

By watching a video of something they’re interested in — like a GMC commercial, for example — players feel better about the placement of ads in games. This solution is the core of Tapjoy’s Mobile Value Exchange.

“You can’t just rely on the consumer to go find [the offer wall] on their own and stumble across it,” said Dille. “You have to have moments in the game, the right moments, where you might call out to them and say, ‘Hey, need more coins? Check out this.’ … You’re kind of holding the gamer’s hand through the process, and if they’re getting stuck, you’re [extending] an opportunity to them to go out to this offer wall and get more currency.”

Just how well is this system working? “Video ads outperform television ads on mobile,” said Dille.

That’s largely because of the promise of a reward waiting at the end of the ad. “[It’s] kind of a huge point because advertisers have now been looking at this explosive growth in mobile devices and looking for a winning formula for mobile advertising,” he said.

It’s not a haphazard strategy, though. The kind of ads that end up in a game matters. They have to make sense for the audience playing it.

And Tapjoy reaches a lot of users — 340 million globally across 1 billion different devices. It’s evenly distributed, too; about 51 percent of users on the platform are female.

“We’ve got just scads and scads of data about what types of offers, what types of ads and conversions people are taking across these different games,” said Dille. “We use all of this to feed into our different algorhythms to provide smarter targeting and better optimization for the gamer as well as the developer.”

Getting people to pay attention is only one part of the equation. Advertisers can choose to present a second option after the ad ends that would interest people who watched the video. For example, someone who watched a movie trailer would then be able to click to order tickets online.

“It’s a very powerful device that actually takes it from pure awareness, the way TV does, to actually transactional,” he said. “And that’s a great experience for the consumer, which means advertisers love it, which means the development community is going to make more money off of this over time.”

The free-to-play model in particular allows Tapjoy to “monetize the entire audience.” Not everyone cares about paying to succeed at a game or unlock extras, but that doesn’t mean that group is unreachable.

“For those people, we can still make money off of them and help the developers make money via this ad platform,” said Dille. Tapjoy typically helps companies realize 30-50 percent of their overall revenue.

“[Free-to-play] means you’re constantly introducing new concepts for the community to buy and adopt,” said Dille. “Whereas you make these huge console games, you spend two to three years making them, and then you spend two to three years making the next one, there’s this big gap in between, so you [have to] keep that community going.”

Even the market matters. The differences between iOS and Android are narrowing, Dille says, but they’re still there.

“IOS actually monetizes a bit better, and there’s a little bit less friction."

He added, “These devices are appealing to different socioeconomic user groups. The Apple products are still premium devices, [and] people have more disposable income, so they tend to spend more.”

Tapjoy found that holiday-themed ads increased click-through rates and conversions on its platform by nearly 50 percent. Users behave differently between devices, however. On Valentine’s Day, Android users took longer to make purchasing decisions than their iOS counterparts, with the peak buying time occuring a full day afterward.

Games are only one part of advertising

Games may be where Tapjoy got its start because of the natural built-in economy, which is primed for rewards, but the potential for mobile advertising is much bigger, according to the company.

“If you go out to non-game apps, we’re seeing the same opportunity that consumers are really interested in engaging with advertising as a means to obtain content,” said Dille.

Whether that takes the form of movies, music, or even print newspaper offers doesn’t matter. Delivering a positive experience and forming a successful community between users, developers, and advertisers does.

Follow @wita on Twitter.

Photo credit: Tapjoy