In-Game Ads Push Into Mobile Market, But Play It Safe

Considering the growing amount of time people spend using their smartphones, phablets, and tablets—especially to playing games—it’s no surprise that advertisers and marketers want to use mobile devices in new ways to get their messages in front of us. Last night in New York, executives from marketing companies such as Publicis and game developers Funtactix and Large Animal Games discussed the growing trend of putting ads into mobile and social games. Marketers want increased exposure while game developers see ads as an opportunity for revenue—but the trick of course is to not turn off the users, who are just looking for some fun.

Germany’s SponsorPay hosted the event and CEO Andreas Bodczek spoke with Xconomy about the momentum he expects to see in the mobile advertising market, especially in games. SponsorPay’s platform for publishing online and mobile ads is used by marketers as well as developers who want to monetize their social and mobile games. Bodczek says his company in prior years grew its in-game advertising business through Facebook and other online venues for social games. Now he sees new prospects with games that run on smartphones and kindred devices. “We figured a year ago that demand for the platform would proliferate on the mobile side,” he says.

Ads have been finding their way into more mobile games as marketers search for new places to pitch consumers. Bay Area startups like Kiip, which participated in last night’s panel, and Tapjoy argue that mobile games offer a natural venue for notifying users about rewards, discount offers, or other apps they’d like.

Though mobile games and the devices we use to play them offer ways to reach consumers intimately, Bodczek says marketers must also be careful to respect users’ privacy. Ads in mobile games, he says, can be ways to gather data for targeted marketing uses as long as the users knowingly choose to share that information. “There is no way that you go after the user on the mobile phone and their data in a way that the user is not expressly aware of and has consented to,” he says.

Naturally ads for mobile games are expected to evolve with the mobile sector as a whole. Location-based ads, which tailor marketing messages based on the users’ whereabouts, may also spread across more devices further in the future. “To do that at scale, particularly on an international level, will take more than a few months,” Bodczek says. “More likely years than months.”

As this sector taps new ways of reaching consumers, Bodczek says SponsorPay wants to disrupt the U.S.incumbents in the ad platform market. He says what makes his company different is its extensive experience working with both online and mobile advertising. In addition to the team is in Berlin, his company has staff in New York and San Francisco as well as in London, Paris, and Tokyo.

Thus far in-game ads for mobile have seen relatively light activity, but Bodczek expects brand advertisers and marketers in 2013 to put more money into this medium as the entire mobile marketing sector grows. “[This year] was very much about educating advertisers about what can be done in mobile,” he says.

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