Do Ads Hurt Retention In Mobile Games?
The short answer is no. If you implement the ads correctly, it's unlikely for ads to hurt retention in your mobile game.
Jovan Ristic

When it comes to mobile games, there are many things that go into making them successful. Obviously, having a great game is vital. However, publishers also need to make sure they're doing everything they can to market and monetize their games properly.

One question that often comes up is whether or not ads hurt retention rates - does showing an ad after someone loses a round cause them to quit the game altogether?

According to a study published in 2021, the answer is no. In fact, ads actually have little effect on retention rates in mobile games, and it's mostly positive.

If you implement the ads correctly, there is not much to worry about - it's unlikely they’ll negatively impact your players' experience. In this article, we'll explain why.

The Myth Of Ads And Retention

Mobile games and freemium mobile games, in particular, rely on in-game advertisements as a valuable source of revenue. These advertisements come in many different formats, such as videos or banner ads.  In-game advertisements can be a significant source of revenue for developers.

However, developers often worry that ads will have a negative impact on player retention rates. This myth has been around for a long time, and it's primarily based on the assumption that players will get frustrated when they lose a round and are then shown an ad.

But do ads really hurt retention in mobile games?

There is limited study data published on the effect of ads on user retention. Still, the belief that ads increase revenue at the cost of user retention is persistently perpetuated.

However, the latest study found that ads have minimal effect on retention rates. The authors analyzed 21 games featuring in-game advertising and found that showing ads to users did not directly affect user retention.

In other words, if you're worried about putting ads in your game, you can relax - it's unlikely to have a negative impact on your players' experience as long as you implement ads well.

What Is User Retention?

Mobile game retention is a metric vital to your app's success. It helps define your audience size, analyze growth potential and measure the average duration of a game session.

Essentially, user retention is the rate at which users continue to play a mobile game. It's an essential metric for developers, as they want to ensure players stick around and engage with their game.

To put this into context: if you have 10000 players download your game today and 6800 of those are still playing it the next day, your retention rate is 68% on day 1.

Several factors can affect user retention rates, including the quality of the game, how often new content is released, and how well the game is monetized. Ads can also play a role, but it's not a major one as we already covered.

How Do You Measure User Retention?

There are a number of ways to measure user retention, but the most common one is to track the percentage of users who continue to play your game after a certain number of days.

For example, you might want to know how many players are still playing your game after a specific number of days since the installation. This data can help you determine how engaged your players are, and it can also help you track your game's overall success.

In most cases, user retention is measured in several modalities:

· Day 1 retention.

· Day 7 retention.

· Day 30 retention.

· Day 90 retention.

The retention rate for a hypothetical "Day N" is calculated by dividing the number of users who launched the game on Day N by the number of users who downloaded the game N days ago times 100. The result is shown in percent.


Why Is Retention Vital To Mobile Game Developers?

User retention is vital for game developers because it indicates how content players are with the gaming experience. As such, user retention is one of the critical metrics that determines a game's success, right next to its lifetime value. Players who leave the game early won't be monetized.

Even with the best ad monetization strategy in place, developers won't be able to convert if the players quit the game early and never return to it. Therefore, keeping the players engaged and playing gives developers more chances to monetize them.

But those aren’t the only benefits to retaining your players. Suppose a player engages with your game daily. In that case, that indicates they are happy with the gameplay, increasing the likelihood that they’ll recommend the game to a friend and, if possible, invite them to play together.

Information about retention can also help your game development teams create a better gameplay experience for your users. By understanding what works and what doesn't, you can make sure everyone is doing their part to improve the player's journey.

What Impact Do Ads In Games Have On User Retention?

The 2021 study “The Sensitivity of Retention to In-Game Advertisements” used a sample of 21 games using ads as their primary revenue source and measured their impact on user behavior and retention rates. The study found no evidence that displaying ads significantly impacted user retention.

However, the researchers found that the game itself plays a significant role in retention. This implies developers should put more effort into designing satisfying in-game experiences to keep players around.

In a test conducted by the advertising department at Rovio, the developer behind Angry Birds, researchers found that ads in games don't seem to harm player retention or session length. In fact, players who watch ads and install other games tend to have higher retention rates compared to a randomized sample.

After installing other games, players still had longer playtimes than the random sample. In fact, the retention rate was the highest among players who installed competing games.

The researchers then ran another test to confirm their findings. In an A/B test, they completely removed ads for new users and compared their behavior to the users that were shown ads. While there was no difference in behavior, the users who were shown ads had slightly higher retention rates.

How To Ensure Ads Don’t Impact User Retention?

There are a few things you can do to ensure that ads don’t impact retention rates:

1. Place the ads in places where they won’t interfere with the gameplay. That means that banners should have a determined slot within the UI that doesn’t interfere with any features the players would click on. Interstitials and rewarded video ads should be shown during a natural in-game break.

2. Make sure the ads are easy to dismiss if users don’t want to see them.

3. Monitor how the ads affect retention rates and make changes if necessary. Finding the Goldilocks zone will take a tremendous amount of trial and error

4. Test different types of ads to see which ones work best for your app. Rewarded video ads make more sense in some types of games. On the other hand, interstitials and banners are a perfect fit for another. You can learn more about it in our blog.

5. Always be prepared to adjust your game monetization strategy if it’s not working. If you do not see the results you want, change the ad frequency, placement, or type of ads shown.

By following these tips, you can ensure that ads don’t harm retention rates and that your users will continue to use your app.

Trouble Optimizing Your Ads For User Retention?

GameBiz Consulting was founded by experts in increasing ad revenue for games, and we have a successful track record. Our team will work with the major ad networks to get you the best results possible. Plus, our services are transparent and performed on your accounts.

With our help, you can make more money from your games while spending less time managing ads. Let us take care of your ad monetization strategy so you can focus on what you do best – making great games!

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