Tapjoy, at NY Games Conference, Sees More Ads Coming to Mobile Games

9/10/12Follow @jpruth

Much like other contagious apps, mobile games can spread quickly through the populace with the right buzz. However, turning that attention into dollar signs can be elusive.

Developers might try to charge players who want to download mobile games, but let’s be realistic—not every game is going to sell like Angry Birds, even at just 99 cents a pop. Brian Sapp, director of developer partnerships with San Francisco’s Tapjoy, says pairing mobile games, especially causal titles, with marketing and ads is a growing way to glean revenue from this industry.

Tapjoy’s mobile ad and publishing platform recommends apps to consumers based on the apps they currently use while offering rewards for installing the apps. Sapp was a panelist at last week’s NY Games Conference, an annual gathering put on by Digital Media Wire that brought out local game developers such as Arkadium, Funtactix, Tylted, and PrePlay, as well as out-of-towners. Sapp spoke after the event about some of the changes he expects to see in mobile gaming.

“We have two different movements happening in mobile,” he says. One camp, which includes developers such as GREE in San Francisco, tends to create games with rich graphics and high interaction for players willing to pay. That leaves little need for revenue from in-game marketing. “Those games aren’t going to be looking for brands to be involved as much as casual games such as Draw Something,” Sapp says.

He expects money from brand marketing to flow to casual mobile games, which are often free, easy to play, and attract a broad audience. Though they can be popular, such games typically do not monetize on a per-user basis at the same rate as premium games. That is where marketers and advertisers can seize opportunities, according to Sapp.

“We’re going to see brands moving money into [casual games] more and more in the future,” he says.

From the marketers’ perspective, Sapp says, mobile games offer a novel way to attract attention. Web-style banner ads have become rather passé and Sapp believes brands are eager to leverage the innovation that mobile games offer.

He cites the business model used by Smule, a Palo Alto-based developer of social music-making apps, which lets advertisers sponsor songs for users. “That’s a cool way to allow a brand to be associated with unlocking content and getting their name in front of millions of eyeballs,” Sapp says.

Other types of incentives from brands, such as daily rewards when players log in regularly to games, are also on the rise among casual mobile games, he says. The objective is to find nonintrusive ways to infuse the sector with marketing revenue.

“Zynga is obviously interested in this and they’ve already built a team to go after these types of relationships,” he says. Smaller game developers such as FreshPlanet in New York, Sapp says, likely don’t have their own resources to pursue marketing deals with big brands. “It becomes important for them to tap into ad networks that already have these relationships in place,” he says.

Sapp believes that finding more ways to monetize mobile games is essential to growing developer studios beyond tiny teams. In particular, he sees marketing that coaxes the public to make purchases while playing as a vital source of potential revenue. “You need to build games where users are making in-app purchases,” he says.

That can include using ads tied to extras and bonuses related to the game play. “While players may hesitate to take out their credit cards, they might be willing to unlock in-game currency by watching a video ad,” he says.

Though San Francisco is a well-known hub for video game development, Sapp says other cities are seeing their share of upstarts, particularly for mobile games. “There are important indie developer communities. New York is one, Vancouver is one, Boston is one,” he says. “There’s still a lot of room here and a lot of developers will find success on mobile in the next year or two as the community matures.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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