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

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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.”

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