What does Google AdMob's in-game ad push mean for India's booming mobile gaming industry?

On March 12, 2024, Google AdMob, a mobile advertising subsidiary of Google, officially announced that it would be serving in-game ads after observing the growth in the gaming industry.

The company made this announcement at the Google for Games 2024 Developer Summit, sharing how its latest ad tools and solutions can help mobile app developers enhance creativity, diversify revenue, and make data-driven decisions.

Google AdMob facilitates the monetisation of mobile apps through in-app advertising. Advertisements can be presented using a range of format choices that seamlessly integrate with the platform's native UI components.

In-game advertising networks assist game developers in finding suitable ad space to monetise their mobile apps. They can extend your reach and optimise ad unit availability, pricing models, and core functionalities. Some of the top in-game ad networks alongside Google AdMob are Verve Group, InMobi, Media.net, AdColony, and more.

In 2022, the Indian government officially recognised the increasing influence of esports. As per a report titled New Frontiers - Navigating the Evolving Landscape for Online Gaming in India by EY India, an advisory firm, the online gaming industry has witnessed a compound annual growth rate (CAGR) of 28%, reaching Rs 16,428 crore in FY23 and is projected to reach Rs 33,243 crore by FY28.

The report also mentions that most gamers in India prefer playing games on their phones, with 94% using mobiles. Even though more people are playing games, India's online gaming revenue is only 1.1% of the global total.

Prime Minister Narendra Modi met with top Indian gamers on April 13, 2024, to talk about the future of gaming in India. They discussed how gaming is growing, job opportunities in gaming, and the role of women in the industry.

Notable names include Naman Mathur (aka Mortal), Animesh Agarwal (aka Thug), Anshu Bisht (aka Gamerfleet), Ganesh Gangadhar (aka Skrossi), Tirth Mehta (aka Gcttirth), Payal Dhare (aka Payal Gaming), and Mithilesh Patankar (aka MythPat).

Demographics have a big impact on how much the gaming industry grows. One key thing is that more people can afford smartphones now. There has been a rise in demand for smartphones made just for gaming for example Realme, iQOO, Asus ROG, and more.

These special phones are designed with features to give gamers the best experience. This focus on mobile gaming shows how companies are paying attention to what people want.

What’s in for game publishers?

Currently, AdMob's inventory is exclusively for mobile games. However, Derek Butcher, project manager at AdMob, stressed that the company intends to broaden its ad placements to encompass both two-dimensional and three-dimensional mobile games in the future.

This expansion presents opportunities for game publishers, offering them access to a wider pool of advertisers and potentially increasing their revenue streams through AdMob's platform.

Anurag Banerjee, co-founder and CPTO, LightFury Games, a gaming startup company, says that Lightfury Games can certainly utilise this development by implementing AdMob to generate additional revenue streams alongside in-app purchases (IAP) or subscriptions.

“From what I have known, AdMob offers various formats like rewarded video ads [users watch ads for in-game rewards] that can enhance the player experience without being intrusive,” he says.

Impact on existing in-game ad players

As Google makes its entry into the in-game advertising sector, industry observers are keenly evaluating the potential impacts on existing players. As stakeholders contemplate the implications of Google's entry, they are considering factors such as market share redistribution, technological advancements, and shifts in advertising strategies.

Ashit Chakravarty, managing partner - brand strategy, Dentsu Creative, a creative digital agency shares that Google AdMob serving in-game ads will legitimise the ad networks and will also bring a lot of focus toward it.

Google comes with its gold standard for clients it has already worked with and businesses it positively affects. For advertisers, it is a great opportunity to know how to integrate one’s brain into gaming and so on.

“In games, monetisation also opens up opportunities for developers, meaning there are more revenue streams for those releasing the game to the public domain, especially with Google's involvement. Even as the advertising agency, we will know very clearly that this is going to go through AdMob. After that, you know what games will reach out and how that will seamlessly start throwing up as a line item in a media plan,” he adds.

Banerjee explains that the move could lead to further innovation in ad formats and targeting methods across the entire digital advertising landscape. He says, “The success of AdMob in gaming could also influence other industries to explore in-app/in-experience advertising strategies as they are very related fields, and the gaming industry has always been a pioneer in adopting and experimenting with new monetisation strategies.”

What’s next?

Google AdMob is only used to monetise a brand’s product only, says Prof Santosh K Patra, chairperson - media, entertainment and sports business (MESB) department, and head of centre for media, entertainment and sports (CMES) at MICA.

In today’s rapidly growing gaming ecosystem, we are talking about around 500 million gamers in India. Some publishers may want to experiment with integrating ads into games on their own. Now, instead of turning to big platforms, they might consider choosing Google AdMob.

“The gaming business is also an experiential entertainment business. Hence, people create content, and platforms, and attract consumers to monetise the platform. Therefore, consumer-centricity needs to be considered and monetised, and the best way to do that is to identify the right consumers, classify them correctly, and tailor approaches accordingly,” adds Prof Patra.

It is evident that mobile phones have become the first go-to devices for gaming in India. There has been a rise in the purchase of performance-first mobile phones which are built on a very lucrative budget.

Chakravarty asserts that the Indian video game market is going to almost double in the next three years or so as the number of gamers in the country is growing substantially.

“The most striking aspect of gaming is that India currently boasts one of the youngest demographics of gamers globally, with approximately 65%-70% of gamers under the age of 35. As a hobby, gaming will continue to rise in popularity. Eventually, gaming may also be viewed as a legitimate career option,” he shares.

Prof Patra articulates that gaming is evolving towards general entertainment rather than being specific-driven. The concept of gaming is shifting towards integrating consumers into the process, creating a gaming ecosystem within the consumer market.

“Gone are those days when one used to think that only a particular kind of people were into gaming. With the scope and scale of both consumers and game publishers, multiple monetisation strings are going to open up,” he conveys.