In-app ads don't have to interrupt

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Last week, Facebook began paying its members with Facebook Credits to watch advertising videos displayed in Facebook games such as Funzio's Crime City, said a member of Facebook's PR team. Given Facebook's dominance of the online display ad market, it's not surprising that it would consolidate that lead with incentive-based ads. What's interesting is the company's hybridization of incentive-based advertising and in-app advertising.

As it happens, I'm a big fan of incentive-based advertising. I'm at peace with the omnipresence of advertising, so I figure at least make it worth my while. However in-game, or in-app, ads aren't my style. (Note: I'll be using "in-app ads" and "in-game ads" interchangeably.)

The day after Facebook announced these in-game ads, I filed a story for our June issue on in-app advertising. My main takeaway from reporting that piece is that advertisers think the success of in-app and in-game ads depends on the content. Good content equals good response from consumers.

I'm not so sure. Before I started work on the article, I'd never intentionally clicked on an in-app ad; most of the time I'm able to block them out, the same way I do websites' display ads. The reason I'm down on these ads is because I'm so up on the apps they run in. If I'm slinging some Angry Birds, I don't want an ad to disrupt the fun. It's the same feeling I'd get when I would watch a TV show that cuts to commercial right after something interesting happens. Because I didn't appreciate the enjoyment-ejection, I now DVR all my shows. The only live TV I watch is sports. But with in-app ads, I'm not being force-fed branded content. I can click if I want, but if I don't, I won't. Again, I never do.

Enter the incentive-based hybrid. If watching an in-app commercial will give me more Angry Birds or a new level, I'll give 30 seconds of my time (especially since there's no way to require I actually pay attention to the ad). Shoot, I might even give over my demographic information.

However, I'm not sure I'd give two minutes, which is the average duration of in-game videos that distribution network Sharethrough will be serving via Facebook's initiative, according to Sharethrough's director of marketing Chris Schreiber. I don't play Facebook games, so I can't speak to how much of a disruption a two-minute hiatus would be (or how important Facebook Credits are). But I imagine the balance between the time-suck and the reward would not balance out as much in advertisers' favor as one with less friction.

One of the best approaches to in-app advertising that I've ever encountered came from Lexus and ran in the May issue of Wired magazine's iPad app. Wired allowed consumers to download the issue for free, but the Lexus ad posed as a gatekeeper to the gratis content. The Where's Waldo-style bypass required you to locate four Lexus hybrids in a panorama of what I think was downtown Los Angeles. At first I grumbled about the task, then I reckoned that it's worth giving up a minute or two of my time (the cars weren't too easy to locate) in order to receive a free issue of Wired.

Two things the Lexus ad had going for it: Its interactive basis almost made me forget I was being advertised to, and its function - engage with ad, receive free content - overrode any advertising aversion. It was like being told to eat your vegetables before getting dessert, except the vegetables were cornbread.

I think for in-app ads to generate the level of ROI that would have CMOs doling out hugs, the ads need to parallel the content they're featured in. People like the Old Spice commercial because Isaiah Mustafa is hilarious, probably just like the show it interrupts. I liked the Lexus ad because it had me thinking, just like the magazine it interrupts. I'm not sure how much Facebook gamers will like a two-minute ad just because it's tangentially tied to the game it interrupts. No doubt they'll put up with it to receive the credits, but do advertisers really want to be thought of in the same vein as asparagus, something you chew through to get to the good stuff but not necessarily what you'd order if given the choice?
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