Direct ad sales: Advantages, challenges, and best practices | Chartboost Academy
Insights & Best Practices
May 22, 2023
You've spent countless hours and millions of dollars building your mobile game. You need to make that money back and turn an actual profit, right?
One of the best ways to drive revenue for your game is through in-app advertising. By selling ad space, you can earn a steady stream of income. The big question is how do you do it?
The easiest way is to partner with an ad network. These "middlemen" sell your game's available ad inventory to advertisers, allowing you to sit back and focus on creating better in-game experiences and market them to your target audience.
But working with ad networks isn't free. They take a revenue share (think Google AdSense) or charge you a fixed fee (think Amazon Transparent Ad Marketplace).
For many mobile games, the cost of ad networks is justifiable. Their services simplify the entire monetization process. But what if you want more control over the ads displayed in your game(s)? Or you can't stand the thought of paying an ad network?
This is where direct advertising sales comes into the picture. Let's talk about what direct ad sales is, the advantages and challenges associated with it, and a few best practices to help you succeed with direct ad sales, should you choose to venture down this path.
The advantages of direct ad sales
Direct ad sales is an advertising strategy in which publishers cut out the middleman (ad networks, SSPs, DSPs, and ad agencies) to strike one-on-one deals with advertisers.
There are numerous advantages to direct ad sales. Three of the most important ones are:
Higher revenue potential
As mentioned above, ad networks and exchanges charge for their services. Direct advertising sales allows mobile games to work directly with advertisers, which increases ad revenue. Why? Because they don't have to pay "middlemen" to sell ad space.
On a related note, mobile games can often charge more for the ad space they sell directly because they can promise advertisers premium ad slots. Games might even use their audience knowledge and work with advertisers to create highly successful ads.
Control over ad placements and ad formats
Direct advertising sales give you the opportunity to vet campaign creatives before they go live in your game. You also have more control over when the ads are shown to your users. These things make it much easier to build top-level in-app experiences. After all, you can make sure that the ads you show never drive users away.
Better targeting capabilities
Control over ad placements and ad formats doesn't benefit mobile game publishers only. It benefits the advertisers you partner with too because you have complete control over who sees ads and when. This means you can target specific demographics with each ad placement, ensuring their success. The more successful your ads are, the more advertisers will pay for ad space in your mobile games, which will increase your revenue.
The challenges of direct ad sales
Direct ad sales isn't a perfect strategy. If it was, every mobile game would use it. There are specific drawbacks you need to be aware of. The four most prominent ones are:
Increased workload and responsibilities
We won't sugarcoat it: direct ad sales is difficult. To succeed with this advertising strategy, you and/or your team will have to spend time building relationships, negotiating rates, and closing deals with advertisers. It's a big responsibility, especially when you realize that poor performance in this area will seriously affect your game's revenue potential.
Need for specialized skills and knowledge
To succeed in direct ad sales, you need a special skill set. You have to empathize with advertisers, understand their desires, and present your offerings (i.e., the ad space in your games) as a viable solution to their problems. If you don't have the ability to do this yourself, you'll need to hire someone who does — or waste time and money learning the ropes.
Need for a dedicated sales team
You might be able to make a handful of direct ad sales on your own. But if you want to drive significant revenue with this strategy, you'll need to hire a dedicated sales team. That's the only way to make enough sales to ensure your in-app advertising efforts are profitable. But, of course, not every game has the resources to hire a full-time sales team.
Risk of revenue loss due to non-performance
Finally, failure to succeed in direct ad sales can have serious financial repercussions. If you can't attract advertisers, your app will lose revenue, which could make it harder to pay your staff, ship updates, and promote your game to new potential users.
For this reason, and the three outlined above, some games use a combination of ad networks and direct ad sales.
Best practices for managing direct ad sales for in-app advertising
Looking to dip your toes into the waters of direct advertising sales? Keep these seven best practices in mind to ensure your efforts are as effective as possible:
Identify the right advertisers
Who should you offer your ad space to?
To answer that question, ask yourself, "Who plays my game?" Once you understand your typical users, contact advertisers who want to reach those people.
Say you make strategy games. According to recent research, your typical US-based user is male, between 18 and 34 years old, and plays your mobile game for stress relief. To sell ad space, find advertisers who cater to similar people.
Remember, when deploying a direct ad sales strategy, you can offer unique advertising opportunities. You could, for example, allow specific brands and the products they sell to appear in your game and charge a hefty sum for the privilege.
Now think about your game(s). Do specific levels, characters, elements of gameplay, etc. naturally lend themselves to brand sponsorships? If so, contact those brands.
Price your ad inventory appropriately
Now that you've identified who you want to advertise in your game, you need to develop a pricing structure. How much will you charge advertisers to reach your mobile game's user base?
There are a few different pricing structures you need to be aware of:
- Cost per mille (CPM): Advertisers pay publishers per 1,000 impressions. It's not the most lucrative pricing structure for publishers, but it's one of the simplest to implement.
- Cost per click (CPC): Advertisers pay publishers every time a user clicks on their ad. Publishers are able to charge higher rates for CPC ads, but they require more effort to implement — mostly because publishers have to serve more impressions to get paid.
- Cost per action (CPA): Advertisers pay publishers when users engage in a predetermined action, such as purchasing a product. Publishers can generate a lot of revenue with this pricing structure, but only if the ads they serve are successful.
- Cost per install (CPI): Advertisers pay publishers when said advertiser's app is installed. Publishers can charge a premium fee for CPI ads, but to succeed with this pricing structure, publishers need to ensure the ads they serve are highly optimized. If they aren't, they won't generate installs or, consequently, revenue.
Develop a clear sales pitch
Next, reach out to advertisers who might want to purchase your ad space. When you do, make sure you deliver a quality sales pitch that grabs their attention.
How do you do this? Follow these tips to make sure your pitch is on point:
- Personalize your pitch to each potential advertiser. This will help them see the unique benefits you can offer them, not some other brand or game developer.
- Focus on the benefits, not the features. The best pitches answer the question, "What's in it for me?" Don't tell potential advertisers that you can offer them interstitial ads. Tell them that you serve users that are relevant to them, so their click-through rate will rise.
- Mention the advertisers you've worked with in the past. Have you worked with other advertisers before? Talk about this in your sales pitch. Concentrate on the results you helped these advertisers achieve and how you can do something similar for them.
Offer value-added services
Another way to elevate your sales pitch is to offer value-added services, aka activities you're willing to perform to ensure the success of an advertiser's ads.
Maybe you're open to working with advertisers to create ads you know your users will respond to. Maybe you're willing to let a specific brand and/or their products become a part of your game — for a limited time at least. Or maybe it's something else.
If you go above and beyond to make sure your advertisers' ads are effective, you'll entice more of them to work with you. More advertisers generally results in more revenue.
Provide transparent reporting and metrics
Transparency is essential to success in direct ad sales.
Why? Because advertisers want to know exactly how their ads perform. And since they don't get clear information from most ad networks, this is one way you can differentiate your advertising options from the others and ensure your ad space is always full.
So make sure your reporting methods are clear and that metrics for every advertising campaign are easily accessible, even when those campaigns underperform. Your advertising partners will appreciate the transparency and consider working with your mobile game again.
Foster long-term relationships with advertisers
You don't want to sell ad space to advertisers just once. You want to sell it to them over and over again. This makes it much easier to consistently drive revenue for your game.
Fortunately, fostering long-term relationships with advertisers isn't rocket science. All you have to do is follow-through on your promises. If you deliver a quality experience and generate results, advertisers will be more than happy to keep paying you.
One more thing: reach out to advertisers on a regular basis. That way you and your game(s) are always top-of-mind when they're ready to purchase more ad space.
Continuously optimize ad performance
Last but certainly not least, work hard to create a better advertising experience for each of your advertising partners. You can do this in a few different ways:
- Experiment with different ad types: You can display a variety of different ad types in your games, from typical banner ads to interstitial and rewarded video ads. Experiment with each of them to see which generates the best results for your advertisers.
- Use Named Locations to show ads effectively: When should you show ads to your users? At times that don't dramatically harm users' experiences playing your game, of course. Named Locations makes it easy to pinpoint advertising sweet spots without having to regularly push code updates to the Apple App Store and Google Play.
- Always prioritize the user experience: Your advertising partners are important, but you should never prioritize them above your users. If you do, your game's user experience will plummet and fewer people will play. When this happens, advertisers won't want to work with you because their ad campaigns don't produce results. So put your users first and everyone will be happy.
Direct ad sales can be incredibly beneficial.
Once you implement this strategy, you'll have way more control over the ads that appear in your games. You'll also have the ability to generate more revenue.
It's not all rainbows and sunshine, though. To succeed with direct ad sales, you have to work hard, learn a specialized skill set — or hire someone who already has it — and invest significant resources. That's why some games use a combination of ad networks and direct ad sales.
If you decide to partner with advertisers directly, keep the best practices outlined above in mind. As long as you price your ad inventory appropriately, develop a clear sales pitch, provide transparent reporting, etc., you'll put yourself in position to succeed.
Just remember, the mobile games market is always changing. You have to change with it and continuously evolve your in-app advertising strategies to meet the needs of your advertisers.
Interested in more monetization tips? Check out more of our content to learn how to drive as much revenue as possible for your mobile games. See you on the blog!