• by Ari Brandt , Op-Ed Contributor, November 5, 2013

Social and mobile gaming has gone mainstream – that’s why we’re so excited about the future. The rapid increase in gaming consumption means more monetization opportunities, but, while we’re spending millions building games and acquiring users, it's important to find the right balance between in-app purchase revenue (IAP) and ad revenue.

For example, by experimenting with existing business models, some developers are catering to the small percentage of “whales,” while others are turning to in-game advertising. This has been a great exercise for the gaming industry as a whole, spawning learning, best practices and innovative technology as a result.

But, as many developers have found, monetizing with ads can be tricky.

A recent Forrester study found that 47% of U.S. smartphone users ignore in-app ads, while 43% find them disruptive. Plus, ad implementation such as banners, interstitials and targeting technology leave many factors to consider. Running ads can also beg many questions: How can you implement them without turning off your players? Is there a way to run ads that enhance—not disrupt—the user experience? Can ads increase the games key performance indicators?

Here are three monetization tips that can help you monetize with in-game ads without compromising your users’ gaming experience:

Rethink Advertising: Digital advertising has yet to reach its full potential, but this medium has a lot to offer. Yet some gaming advertising tech vendors are still delivering formats patterned after Web-based units, which are disruptive to players. Traditional digital advertising isn’t able to match the revenue or engagement levels that appeal to players.

According to Harris Interactive, 72% of Facebook game and app users and 60% of mobile app and game users prefer to see immersive and integrated ad units.  Thus, developers should consider rethinking the ad types they serve, switching to those that engage players with interactivity unique to the specific gaming experience without disrupting the user experience.

Target Emotions: Most have built games with emotional triggers for IAP and user retention. Leverage these same dynamic features for in-game ads by utilizing integral components that add relevant value for users. “Breakthrough Moments” (BTMs) achieve this, offering ad opportunities that reach players during emotional times in game play, such as when a player gets a new high-score, achieves a personal best or is in need of help.

BTMs are additive to game play, prompting players to accept them as part of the core game loop. This could translate into deeper engagement and happier players for your game, as you will reduce player churn and even engage them for longer play sessions.

Give to Receive: Capitalize on value exchange ads. Value exchange ads work best when they they’re coupled with emotional moments (BTM technology). According to the research firm Interpret, 42% of mobile gamers, 44% of social gamers and 33% of online casual gamers feel value exchange gives them an advantage, ensuring they are a win-win-win for everyone—the user, marketer and developer. Those already using value exchange ads are cultivating real connections between the brand and the user, increasing retention and ad dollars in the process.