Free Ad-Supported Games Making A Comeback

Ad-supported free games are finally catching on. Some 86% of gamers prefer free games with ads compared with paid games without ads, per a white paper from WildTangent Media, Electronics Arts, and analyst firm IHS.

The white paper, Value Exchange Advertising in Freemium Games, aims to provide insight into the world of free video games supported by advertising. The gaming model known as freemium relies on advertising to support free games mostly on mobile devices. Analysis conducted by firm IHS found that 79% of gamers who participated in the research said they like to receive free virtual goods from clicking on ads.

Better yet, free stuff works well to improve brand recall. Some 89% of gamers recall advertisements in-game, and marketers typically see two times more actions after seeing the ads, all driven by in-game ads, compared with 46% for live television, and 32% for free TV content online or via apps.

IHS forecasts that by 2017 only 10% of mobile and tablets games revenue will come from paid downloads. This reflects the importance of freemium games to monetize audiences using micro-transactions or in-app purchases.

Despite the growth in freemium games, industry polls confirm that only a small percentage of active gamers of free game products spend money on premium content, although more were willing to visit the area of the game requiring them to pay to play. In fact less than 5% do. This places advertising in an important position to monetize game play. Early games used product placement to augment sales and free stuff. The industry just might see that model again because the study suggests that 79% of respondents like clicking on ads in exchange for free stuff.

Some 18% of players followed through to the "add cash" area of the game the week prior to interacting with a game supported by ads. In the week following their interaction that percentage rose to 35% of players clicking through to the "add cash" area. When games are free, brands see about a 120% increase in the number of times gamers visit the "add cash" area of a developer's game after seeing the advertisement.

The research also suggests that gamers are interested in advertising that gives them an option to get something in return for their time. Some 66% agreed that they would like to see more ads offering rewards for viewing or clicking on ads, while 28% had a neutral opinion, and only 5% disagreed.

When participants were asked if the ads in exchange for free content impacted their opinion of the game they played, 49% said it gave them a more positive opinion. Among the remaining 51% of respondents, only 18% said it gave them a more negative one.

WildTangent and Electronic Arts worked with consumer research partner Say.So to conduct a study of 500 freemium online gamers.

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1 comment about "Free Ad-Supported Games Making A Comeback".
  1. Jim Rice from Piiku , March 28, 2014 at 10:51 a.m.
    It is good to see that Exchange Value advertising continues to be supported by consumers, particularly in the gaming space. I have been baffled for several years by the difficulty Exchange Value advertisers have had convincing brands that Exchange Value advertising warrants higher CPMs because it works on many KPI levels. With that said, True[X] success shows that brands are beginning to see this greater value and in particular, beyond the gaming segment. That is very exciting and gratifying to see because the traditional linear video model where much of the ad dollars still go, is shifting in ways that open the door to much higher value and engaging ad units.