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The best ways for app developers to use native advertising

NativeX, AppsFire and Twitter's MoPub are all promising to end the era of banner ads and interstitials, but developers need to identify the right moments in a session
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In every football game there's a half-time, and in Football Heroes it's no different. In fact, for those playing the popular mobile game, the experience is probably not unlike watching the NFL on TV, because when a break in the action occurs, that's when an in-app ad is served up.

"It has resulted in incredibly high click-through rates and install rates for our ad partners because the ads are presented to the player when they feel like they have earned a break or a distraction point," explains Michael Marzola, founder of Run Games in L.A., which produced Football Heroes. To facilitate this, when the half-time ad pops up, the player can still see the Football Heroes stadium in the background and players animating in the background. "This helps ground the world and makes the ad feel like it is part of the experience and is not jarring," he said.

This is what many call "native advertising," and it is designed to be far less disruptive or intrusive than the banner ads or interstitial pop-ups that litter so many Web sites. They also represent an opportunity for app developers to take an approach to monetization that vendors in this space claim will be much more effective than anything else.

Native ads: A growing trend
Last month, Twitter showed off its offering in the native ad space through technology it gained with the acquisition of MoPub in 2013:


MoPub showed off native ads running on Tango, one of its launch partners.

A few weeks ago, meanwhile, Tapsense launched a native ad marketplace for mobile publishers. And if that wasn't enough to convince developers, San Francisco-based NativeX has launched a guarantee that if those who use its latest SDK don't see an increase in in-app mobile game revenue of 30 percent within a month, it will pay out $30,000.

"What you're finding in most mobile games today is the same standard ad formats as on the rest of the Web," said Rob Weber, co-founder and vice-president of business development at NativeX. "I don't think developers have spent a lot of time thinking about how to improve ad performance in their games. There have been some blinders on that--there's a notion that every ad technology is kind of the same."

According to Rebecca Lieb, an analyst with the Altimeter Group in San Mateo, Calif., native advertising's selling points include higher engagement, more potential for contextual data and the ability to reinforce or even improve user experiences. 

"It's going to be critical across the mobile landscape," she said. "Just as native is becoming a force to be reckoned with in PCs because people are ignoring banner ads and prices are plunging, mobile-anything has an even greater problem with traditional advertising, which is real estate. There's just not a lot of space to put an ad."

Rob Weber, co-founder and vice-president of business development at NativeX

Weber

Lieb's use of "real estate" as a concept is a good one, because those in the native ad space say location is as important as the way the technology presents the ad. Weber said NativeX looks at 11 different places in a game where native ads might best be served. For example, when users press a "pause" button in a game, that can be a great opportunity to present a video ad.  

"Imagine another placement that might be what we'd call the player event placement," he said. "For example, if you've ever died in a game, usually you're very upset, but there are reward ad formats where you can earn currency to not die next time."

For many advertisers, however, the ideal is to present a native ad that's associated with more positive experiences, Weber said. One possibility might be to take advantage of when a user moves from one level of a game to another.

Native ads draw new companies to space
AppsFire, which started out with a focus on app discovery, is another player entering the native ad space. Its technology includes full-screen ads but also those that will appear when consumers aren't actively playing a game or using a feature within the app.

"In nearly every app there is a moment in which people wait or your attention will fade away while something is buffering or something else is coming up," explained Ouriel Ohayon, Appsfire's CEO. "During that session, we want to give to the publisher the opportunity to broadcast a promotional message to the user."

It's an approach that works a lot better than many traditional marketing campaigns because there are no creative or branding guidelines to contend with, Ohayon said, adding that developers should think of native ads (or "integrated ads," as he prefers to call them) as not only revenue generators but promotional tools to inform them of other apps or welcome them to various parts of the experience. 

As more companies enter the mobile native ad space, Weber suggested that the competition could get intense, with developers needing to choose carefully before they partner with someone or deploy an SDK. 

"You can have an SDK for videos, an SDK for interstitial or one for an opera wall. When you bolt all that in, it really blows up your app," he said. "Developers want to simplify."

They also want to focus on creating a great app or game rather than advertising, and native ads shouldn't change that, Ohayon said. "It's very hard to have that kind of reflection (about monetization) when you're at the start of the design process," he said. Instead, incorporating native ads may be something developers leave until they iterate or offer an improved version. 

However they go about it, Lieb said developers should ensure they avoid one of the major potential pitfalls of native advertising, which is not being transparent with users. 

"The first rule of marketing and getting people to like you and trust you is to not be duplicitous and pulling the wool over anyone's eyes," she said. "Say, 'This message is brought to you by ...' There's no shame in that. If you're an ad, say you're an ad."

There's also the danger of having too much of a good thing. Marzola says Run Games has been approached by several ad networks that have pushed his firm to integrate more ads or ad systems throughout Football Heroes. 

"We have turned these opportunities down because we feel that we hit a sweet spot, where players do not feel like they are being harassed by ads and we are making enough money to help fund our efforts," he said. "The player's experience and engagement will always take top priority for us."