How mobile ads can kill your app monetization (and why they need to be part of your product experience)

• Mobile ads are not a monetization tool
• Mobile ads are totally broken and the ecosystem is a disaster
• Somehow, it all still works
• Plus, you need to look at ads as part of your product, not as something you beam in from the Starship Enterprise just to make a few bucks

I recently had a long chat with Adam Jaffe on the Growth Masterminds podcast, and these are just a few of the insights he shared.

Also, he said, he loves ads.

Jaffe is a mobile ad adtech OG … one of those people with 26 experiences on his LinkedIn resume. He was the head of UA for Playtika, VP of Growth for Jam City, VP of marketing for Social Point, CMO for ABA English, CEO of Tenko Games, advisor on about 3,000 boards, an active investor, and is currently the founder and CEO of Mega Studio, which designs, makes, markets, monetizes, and diagnoses problems with mobile games.

So he knows a bit about mobile gaming.

Mobile ads are not a monetization tool?

And he knows a bit about mobile ads, and user acquisition, and ad monetization. Plus maybe just a few other things. Which makes a statement like this worth reading twice:

“I always try to get people to understand that ads are not a monetization tool, right? It’s a product tool to help you push users further in your game, to increase retention, to improve session length, to do all the things which your general KPI structure is meant to support.”

Adam Jaffe

In our hour-long chat we talked about mobile ads: the problems, the challenges, and disasters … but also how they fit and work in apps. How many are enough, and how many are too much. But where we started is the rant he posted on LinkedIn a few months ago requesting that mobile adtech companies fix their “f-ing” X buttons.

Bad ads

I chatted about the problem recently: Bad ads: when the tragedy of the commons meets mobile advertising.

You’ve had the experience: you watch a rewarded ad unit in your favorite game, only to not be able to X out of the video or playable. Tapping the X only brings up an iOS or Android interface to install a different app … perhaps not the best user experience. 

But it’s the experience, Jaffe explains, that derives directly from existing incentives in the industry:

“You don’t pay for clicks. Mostly you’re paying for Installs, and anytime you end up paying for an install your mind shifts away from this idea of like: “Hey what’s my CTR is my click through rate? Is it 2%? Is it 1%?

You don’t care. As long as those installs are coming in and the quality is there you’re super happy.”

Adam Jaffe

The only problem: this type of situation creates churn. And the people who care about that churn are often not the same people who want to optimize for either ad revenue or for user acquisition … especially when in most cases where you have an advertising app and an advertised app, they don’t even work for the same company.

An even deeper problem is when people don’t understand how to integrate ads into the fabric of their games and apps in ways that reinforce the core user loop and create deeper engagement. Instead, they just see ads as backfill, Jaffe says, for users to don’t pay.

Killing monetization with too many mobile ads

The result is not just worse engagement and retention. The result is also worse monetization.

“Two apps: exactly the same, okay? But one has five ads, the other one shows 15 impressions. The CPM on that 15 impressions per day is going to be half … it’s going to be significantly less than your five impressions. 

In fact, that five impressions per day app is going to make more money.”

Adam Jaffe

Check out the entire show to learn why.

The video is up top (subscribe to our YouTube channel here). Or subscribe to the Growth Masterminds audio podcast on all major platforms. Plus, check out the transcript of our call below.

Full transcript: Run fewer ads, make more money says gaming OG Adam Jaffe

Note: this is an AI-generated transcript that has been lightly edited for clarity and transcription errors. If in doubt, listen to the actual podcast or video.

John Koetsier:

Are bad ads going to kill mobile game monetization? 

Hello and welcome to Growth Masterminds. My name is John Koetsier. 

About a third of mobile games revenue is from ads, which makes it fairly important, not as important as in-app purchases, but pretty important. However, is the ad ecosystem killing the goose that lays those golden eggs? 

Here to chat is a gaming OG. He was formerly with Jam City. He was a CEO of Tango Games. He’s a former CMO, sits on advisory boards from multiple companies including Dataseat and INCRMTL, and is now founder and CEO of Mega Studio, a gaming agency that designs, builds, analyzes, and monetizes games. 

His name is Adam Jaffe. Welcome Adam!

Adam Jaffe:

Thanks John, thanks for having me man. Looking forward to this conversation.

John Koetsier:

Hey, it is a super pleasure to have you. It’s been a long time coming. We’ve chatted before, but it’s been, it’s gotta be pre-COVID, so happy to talk. I wanna read something that you wrote on LinkedIn three weeks ago, four weeks ago, something like that. 

You wrote this, I think that you just had a gaming experience that was maybe less than amazing, less than stellar, and you said: Fix your f-ing X button. This is why people hate ads in games … the UX is so unbelievably horrible that it’s often not worth it for the game dev in terms of retention. 

Talk about that.

Adam Jaffe:

Yeah, so as you mentioned, my studio, Mega Studio, we’re a first and third-party game development studio and I was doing some research on a project and this project was predominantly ad revenue based. And so I was playing a lot of games, seeing a lot of ads and I was in probably the 10th minute of my session and I kept getting the same ad and I couldn’t close the button. And every time I tried to close it, it would redirect me to the app store. And it just sort of struck me consistently that this is a terrible experience.

And you know from the marketing perspective of course you want to get as many clicks through that top of the funnel but now that I’m a studio owner and work with a bunch of studios this is potentially you know killing businesses.

John Koetsier:

It’s funny because pretty much only in gaming, can you say, you know, I’m working and I’m playing games. I’m playing games all day long. It’s research, honestly.

But you know, I’ve had the same experience. I have my favorite mobile game. There is ad monetization in there as well as in-app purchases. And I’ve bought a few things and then, you know, occasionally look at an ad when I don’t want to pony up again, right? And trying to click that X is sometimes almost impossible … almost any interaction, click, it kicks off that SKOverlay and boom, you’re in that sort of subset of the app store. 

And, and you know, that’s how you get a click through rate of 90% or something like that, which everybody knows is insane.

Adam Jaffe:

That’s true. And you know, I want to start by saying that I am a huge proponent of advertising. Huge. I mean, I started my career as a marketer. And so for me, ads are the gateway not just for game growth, but from both sides, right? You want to acquire, you want your game to grow, well, you need to make more money. So placing ads is honestly the best way to do that. 

In-app purchases can be hard to balance. There’s a lot of reasons why IAP is difficult to achieve. Obviously, we haven’t had an entire category of hypercasual, exclusively ad based. 

And then the other hand, if you want that game to grow, you gotta go out and you gotta use ironSource as the unit is, well, same company, the Fibers, all these companies still acquire traffic, Facebook of course, with FAN and AdMob of course, with the way that they monetize and the way that you acquire users. 

And so for me as a marketer, I see ads as key. Any company, and I have had many, many conversations both at the product level, C-level, tell me they don’t like ads or they don’t want to put them in their game. 

I always kind of laugh. Like it’s such an antiquated feeling.

On the other hand, you know, when you experience these types of problems and you know that the app developer probably has little to no control over this or they barely know that it’s even happening, you really feel for them. Although to be fair, I think that most people look at ads when they say they don’t like them, not because of this experience that you and I are describing where we can’t actually X out. It’s more because they feel that ads somehow cheapen the product experience. 

To a degree, that can be the case if they’re incorrectly implemented. But, you know, if done well, they can offer a really good experience, especially to a subset of users who may not have the capacity to pay.

John Koetsier:

I think in the case of rewarded ads, it’s a perfect marriage. It can be a perfect marriage, which is I want something, you have something, you want to give it to me because you want me to be engaged in your game and to progress and to do better. I want that because I want to feel success. I want to feel better. I want to win all those things. I can get that by watching this 30 second ad. 

But it used to be, I don’t know, maybe it was 15 seconds at one point. It’s the 35, 40, 45. Last night in my game. And you know what? That was just the video part of the ad, and then I was in a playable. So there was a video stacked with a playable, and it was like a minute and a half chunk of my game time. Now that is disruptive to me enjoying that game. That is massively disruptive. 

But if we get it right, then it works. 

What’s driving this arms race for clicks?

Adam Jaffe:

So I think it’s a combination of factors, but at the end of the day, even within the same company, you’re going to have really divergent views on this topic. 

Let’s just take company A spending, I don’t know. Let’s say company A spends $100 million because its games make $200 million. And they make a significant, let’s say they make a ton of money from advertisement and a ton of money from in-app purchases to your 30% as let’s call it like that, that split. So they have a big incentive to continue to run ads, of course. 

But from the marketing perspective, you’re looking at that and you’re saying, OK, I want to grow my product. So I want to spend money and I want to get the best CTRs. I want to get the best IPMs, plus I want the most installs.

But you don’t pay for clicks. Mostly you’re paying for Installs, and anytime you end up paying for an install your mind shifts away from this idea of like: “Hey what’s my CTR is my click through rate? Is it 2%? Is it 1%?”

You don’t care. As long as those installs are coming in and the quality is there you’re super happy. What that translates into is that the companies that typically work off of CPI as the way that they monetize, they have no interest whatsoever in guarding that click. The click is not a valuable commodity at this point. It’s only the install. 

So if they can push as much traffic to that landing page, even if it’s an erroneous click, maybe 0.01% of those guys goes on to install. And for them, that’s a win. Now, they don’t really care because the game developer isn’t necessarily hurting so much because they do get paid for it, right?

I am placing your ads, I’m paying you for this experience. I think the race to the bottom has been that, oh, if I just put the X of it off and you tap and you go, oh, wow, CTRs went up, IPMs went up, like that’s a win for the advertiser, and it can also be a win for the game. 

Why? Because the game is showing that it has a better eCPM. I can translate more of my value, or more of my users can become valuable to other advertisers out there. So it’s a very unique problem because both sides can appreciate this process having a positive impact on both revenue potentially, but also on acquisition. 

On the other hand, you’re sort of behind the manager or your game designer or whoever is trying to look at retention numbers or in fact long term monetization … these can be very, very delicate situations because they do create churn.

And they don’t create churn because of the ads. They create churn because of what those ads are now looking like, what the UX is on these user experience.

John Koetsier:

And it’s very interesting actually because now we’re starting to see ads in apps that are promoting other apps that don’t have ads. 

So I actually saw that just the other night I actually put it in the blog post where I quoted you as well but they’re they’re literally advertising that they don’t have ads … it’s very meta … if you click on this ad, the app does not have ads.

Adam Jaffe:

Yes.

John Koetsier:

So that is becoming a differentiator.

So talk about this from a product perspective and a user experience perspective. I’ll say if I can’t get rid of an ad it’s a bad user experience. If the reward sucks – and you know that sometimes happens because sometimes you get a variable reward and it could be something that really helps you in the game 0r it could be something that is just irrelevant or barely relevant, and if the reward sucks, that sucks …

But also if I have this big gap in my gameplay, I’m playing a mobile game because I have five minutes, because I have seven minutes, because I need a mental break, right? If you’re going to take 10% of that time and make me go through this experience, that’s going to suck from a product perspective and a user experience perspective. 

What is that? What do product managers feel about this? What do game designers feel about this?

Adam Jaffe:

So it’s actually kind of an interesting topic because, and I’m going to answer this probably not in the way that you’re expecting because the way that the ads were typically formulated in the past was, you know, let’s just, you know, interstitials as an example, right? Just what a horrible UX. You know, just randomly pop a 20 second ad in there and you’re frantically trying to close it because it’s in the middle of your game potentially.

John Koetsier:

Out of context.

Adam Jaffe:

Exactly. And the banners and what, I mean it was just, but today what ads actually are, you know, allow for is to give players a taste of what the item purchase should look like. And if your ad integration is done effectively, essentially what you’re doing, you start users down the path of watching ads. Okay fine, you don’t want to pay and there’s going to be a subset of players who are like, I’m paying yes, here’s my money, take it, cool. It doesn’t necessarily preclude them from watching ads by the way, but that of course is going to be a type of player and God bless them because they make it all work.

John Koetsier:

Everybody wants them, yes.

Adam Jaffe:

But the ad as a general rule of thumb, a way in which you can sort of push users to experience a taste of what it feels like to pay that premium subscription or premium or whatever, you know, to get the sword, to get the booster, to get the power up. And you’re doing it for maybe a fraction of the time or maybe it gives you only a percentage increase versus if you were to pay for it, it would give you, you know, multiples above what you’re currently getting. 

And so in this way ads are a way to sort of peek under the hood a little bit or behind the curtain and show you, hey … there’s a different experience in this game, and it sits behind this paywall, this pay experience. And we want to offer you an opportunity to participate in a part of that process. And for me, that’s how I always approach it. Ads can be this opportunity to enjoy an experience which you don’t necessarily have to pay for, but if you do pay for it, you’re going to get an even more enhanced experience. 

That being said, I think a lot of companies don’t really understand how ads are meant to be integrated … treating them as kind of backfill for just any user who isn’t going to pay, we’re going to just spam them to oblivion essentially. And that’s also not a really great approach. And I don’t really want to get too deep into like impressions and how many impressions you send out has a big impact on your overall app CPM. 

So I’ll give you an example. Two apps: exactly the same, okay? But one has five ads, the other one shows 15 impressions. The CPM on that 15 impressions per day is going to be half. I’m just going to say it exaggerated. But it’s going to be significantly less than your five impressions. 

In fact, that five impressions per day app is going to make more money. 

Why? Because the companies mediating that particular app, they’re going to see that this app has a slightly lower CTR. And so they’re going to basically push down our CPM for that product.

And so you see these companies that are blasting ads, and you’re realizing like, not only does this not work out in terms of money, it also doesn’t work in terms of value for you. And ultimately those players will churn without ever really giving you the kind of value you would have expected.

John Koetsier:

So that’s super interesting. So basically, they’re not just shooting themselves in the foot, they’re shooting themselves in the hand, they’re shooting themselves in the leg, they’re shooting themselves in the head, they’re shooting themselves everywhere because they’re destroying their game experience. They’re reducing their monetization by blasting you with ads. 

Adam Jaffe:

Exactly, exactly. The difference between first impression and seventh impression is like 99.9% drop in CPI. It’s a massive drop. 

But it’s not just that you drop in CPI on a per user basis. If you are consistently showing tons and tons and tons of ads and nobody is converting on those ads – because of course they’re not, because you’re showing them 15 ads a day, they’re not clicking 15 different times, right –  your overall CPI of that product on a category level will just decline because people will know that that product, this is remnant traffic. 

And there’s a secondary component to this, especially if you’re on iOS and you don’t have IDFA, right? So IDFA allows, of course, for behavioral targeting which can say, if this is a high quality user, let’s make sure he’s getting kind of the $3 to $4 CPMs. But if that is a bit lax or you don’t have IDFA like we are experiencing these days – and in Android too, if you’re not buying quality traffic to supplement those users – then you basically are just scraping the bottom of the barrel with another bottom of the barrel. You have no way of growing that. It’s lower than low. 

For me, whenever I’m looking at how to increase value in a business or looking at ad stacks or trying to figure out the right way to support a business, I’m always trying to understand the relationship between how much money you spend marketing, what’s your retention of those users because obviously if you’re consistently replenishing that first time user experience a lot – 100 grand a day and you’re buying quality users, this might not be such a big deal – but if you’re not buying that great quality and you’re not spending a ton of money, so you’re really impressing upon the same user base consistently over and over with the same types of ads, you run a huge risk of causing major detriment to your overall ads revenue.

John Koetsier:

This is huge. This is absolutely huge because you have cases – essentially a sad case of a game developer, an app developer who doesn’t understand that – and is desperately trying to monetize and is essentially destroying his or her ability to monetize by the very things that he or she is doing to try to monetize. And so …

Adam Jaffe:

I would say that it’s not a rule of thumb that says if it’s like this, it’s like that. And because the world of advertising is quite opaque, in fact, it’s …

John Koetsier:

Quite, hey? Just a little.

Adam Jaffe:

Just a little, you know …

John Koetsier:

How many servers did that ad go through before it came to my app? 1535!

Adam Jaffe:

You don’t know anything. You don’t know the CPMs of your own users. At best, you’re getting an average across the market for a period of time. Some mediation partners will say, oh, we give you user-level CPMs, which is great, although to be fair, you’re not 100% sure why that CPM was like that. 

Because of course, you don’t have the device graph. You don’t have access to a device graph to know that that player has gone on to do something else in this game, and we really want him. So there’s not even much you could even do with that information, other than to understand the amount of ads I should be sending to a user. 

I can’t even tell you what that is. 

I can’t tell you if it’s three or one or ten because again each user is different but I can tell you that the more ads that you send you’re going to hit a point of diminishing return and this conversation isn’t specifically about just blasting users with ads but I think it’s also about opening up yourself too. And I think a lot of companies also don’t necessarily realize this but you know mediation isn’t like you have one mediation SDK and then that simply is just there all the traffic goes through this and so you only have one SDK. No, you still have all of the SDKs that are sitting inside your app right, and so if there’s any issue with any of those SDKs it will break the waterfall and ironSource or MAX or whoever could detect that and move on to the next one. 

But there are other times where they can’t detect it and so you have the experience for instance like I experienced right where there was a bug in that SDK, which didn’t allow for an X out. I was contacted later by the CEO and he was saying, yeah, hey, you just caught us on an off day and we, it’s no issue and we’re trying to fix it. 

I see you laughing, so maybe you don’t believe that statement, but I believe that that was true. 

And so at the end of the day, I think companies aren’t necessarily aware and there are companies out there that kind of do this, checks and balances system … a pre-check to say, hey, does this app actually work? Will it serve an ad? Well, yeah, I got an ad for sure. So it works. And I think that’s probably the extent to which that technology kind of goes. Now, there are other ones that really look at it. They pre-cache the ad, and they check the X’s there. But again, if there are problems, the user suffers.

John Koetsier:

Yeah.

Adam Jaffe:

It’s always the user who’s suffering in this scenario. Right?

John Koetsier:

It’s a high speed business. There’s so many different layers to it. There’s so many different ways and things that can happen to an ad, an ad impression even happening. Many, many things can go wrong there. 

Okay. 

So there’s a lot of issues there. I want to get back to kind of where we started, where we have this experience in an ad that is not optimal. What is the solution to that? 

How do we fix that?

Adam Jaffe:

So I think it goes back to truly understanding your business and figuring out where your… where your users are finding real value in your product. And you can monetize that experience, right? And I think that’s ultimately what you’re trying to get to, right, hey, you ran out of lives, you wanna continue, you know, pay a dollar or watch an ad, you know, to continue this, you know, be a little jumpstart on that, want an extra boost or whatever. 

And I think if you consider that the ad, not as a simple monetization tool, but actually is a product tool, it’s a tool to allow a player an insight into an aspect of your product. That’s what adds, allow for. And if you approach it like this, then you wouldn’t just blast ads all across your product, right? Because you wouldn’t be looking at it from the product perspective. You look out for the monetization perspective. 

So I always try to get people to understand that ads are not a monetization tool, right? It’s a product tool to help you push users further in your game, to increase retention, to improve session length, to do all the things which your general KPI structure is meant to support and to have these view-throughs. 

Most companies, as I mentioned, have a different view and I’ll tell you the reason why.

John Koetsier:

But before you go there … if you have that mindset, if you have that mindset that ads are part of your product experience, then you’re going to be very cautious about who you allow into your product experience to deliver ads. And you’re going to have some parameters for who you’re going to allow in there. 

Now that’s complex as well. And picking is, is hard in a lot of cases, but you’re going to want to say to those people: the kinds of ads I want are these, the kinds of ad experiences I want are these. And if more product people and game developers had those types of conversations with more of the ad tech companies and the ad networks, we might get better experiences as well.

Adam Jaffe:

You know, I don’t know if this is actually true. I’m glad to tell this story. Somebody told me the story, and I don’t know if it’s true. But I always liked this. It actually happened in Vancouver, as I recall. 

But they came out with this thing where you could put a colored sticker on your mailbox, which would basically preclude you from getting spam mail. And so all these people put them up there, and then they saw that people were sort of taking them off. And the reason was that for some people, spam mail was better than nothing right?

I know this is a little bit of a weird tangent, but all of this technology exists you can call up any company Apple, Applovin, ironSource … whoever and you can go into their dashboards and you can blacklist advertisers I don’t want to see this stuff. I don’t want to see it. 

There’s a problem with that though. The problem is that you then hurt your own business.

 And we used to do that all the time, right? In the early days of ads, you know, when I was working with Facebook, I’d say, I don’t wanna see casino ads in my game, you know, that’s not what I want. I’m a casino product, I don’t wanna see DoubleDown, I don’t wanna see Big Fish Casino, right? It’s not what I wanted. So you would blacklist those products. 

And then you know what would happen? Your monetization would tank.

Why? Because those guys pay the most money for your traffic. They know your traffic is good. And so then of course it became this race but to make the best product. My product is better than your product, then you’re gonna just pay for somebody to watch your video. 

And I love this idea. Like, if your game sucks, then your ads are gonna work really well at driving players out of it. So it’s not necessarily a problem of not seeing the right stuff. It’s like your game experience sucks. You put that ad, you lost the level, and then you show me an ad and you’re like, yeah dude, I guess I’m out. This looks like an interesting game. So I’ve always …

John Koetsier:

Yeah, I buy that. I 100% buy that. What I was talking about more than who is in the ad or what the ad is advertising is the ad architecture, the ad infrastructure around that X button … around how long is this ad slot? 

Is this a playable that every time I try and play it kicks up SKOverlay? So I can’t play the playable because it’s interpreting every touch as a click ..

Adam Jaffe:

Technically, it’s not a playable. It’s probably just an ad. It just looks a playable … it would be cheaper to make something that looked like a playable than you could just click on that would bring you to the App Store.

Adam Jaffe:

I think you bring up a good point, John, and I think that’s ultimately kind of where we find ourselves, is that there really is no standardization at this moment. There used to be 15-second non-skippable ads and skippable ads. CPMs would be different depending on that, skippable again different types of CPMs because when I was buying media I’d say I want a 30-second non skippable ad … that’s more expensive.

But I feel like what ended up happening was that people realized that they didn’t necessarily have to differentiate. That they could charge the better stuff even because basically there was no differentiation – 15 second, 30 second, skippable, not skippable – that didn’t matter.

The reality is that you can bypass all of that just by what you’re describing right? You have the ad and the end card and the end card links to a thing and all of a sudden you’re like 45 seconds. You know we were allowed to skip it to the end card right and now from the end card … basically it literally won’t leave the screen until you x out of that right corner … so essentially so you could have that X not appear for 15 seconds.

John Koetsier:

Just to get to that point, the lack of standardization: I think that hurts the industry. 

Because if I know what I’m in for, when I accept to view a rewarded ad, I know the deal I’m making. And I’m more likely to make it. But if I don’t know, there’s some ads in the game that I’m currently playing most that are 15 to 30 seconds in, out, done, excellent. There we go, fine, excellent. 

Others are literally a minute plus a playable following them. And that makes me less likely to tap into that ad experience.

Adam Jaffe:

You are 100% true, and I’m going to say something right now that sort of throws a stick in the whole wheel of all this conversation is that is that nobody fucking cares. 

The reality is, is that you as a player, I care so little about you. Because this is one of these weird industries in which I don’t see my customers, I never meet them. If they have written a review, they might get a response, but most likely it’s not gonna happen. You know, we don’t work in a one-to-one relationship. 

We work in a one to … I need 50,000 people, right? And if one guy or 10 people, people have a bad experience … oh well. 

Most games, I mean think about it, like we released a version, we split test, half the population is going to get something that doesn’t work. Okay cool, we’ll just roll it back. Like that’s a pretty typical common response. We’ll just roll back the version, we choose the best performing one, we’re doing constant testing. 

I mean, you live in Canada. Not unfortunate because it’s not a beautiful country, it’s unfortunate because every game that’s released in Canada is essentially a soft launch of what it could be in America.

My point with this is that it is the marketing guys who have all the budget, the product has no budget. They’re the ones who make money, but they really have no budget. Whereas me, I’m the marketing guy. I got $150 million to spend. People want to listen to me. When I say, get me more traffic, and they’re like, how do we do that? He’s already paying the most. He’s paying the top CPM, his IPM, whatever, to find.

We’re not going to talk about creative optimization, because that’s not the purpose of this station, but okay, what if we just force people to click on the button or make that button a little bit harder or extend and so then they do a little test and oh, lo and behold, who’s super happy now? I mean, I’m like over the moon. Wow, what did you guys do?

How many times have I actually called publishers and been like, what did you guys do? That was amazing. How did you get me so much traffic? And they tell me something about some optimization or whatever. 

Now, that may be true. I’m suspicious now that I’ve worked in the industry long enough that it could have just been like … we had a bug and all of a sudden everyone who saw the ad had to click on it you know and that’s why you got all this traffic!

And so this is where we’re in a weird twilight zone type of moment where you need the ad revenue in most most cases to be profitable. 30% is often the difference also because it’s you’re getting a better margin generally speaking, and you need that for profitability. You have very little control over what’s shown. And you also don’t necessarily care too much as long as you’re making the money and you can sort of optimize that. 

It’s like, you know the game is rigged, but you’re playing it anyway, right?

John Koetsier:

Yeah.

Adam Jaffe:

I don’t know, I think the song goes, it’s like, you know, the dice are loaded, but I’m still rolling them, you know? Because it’s the only game in town, so I gotta play it. And I think that’s kind of where we find ourselves. There is no other alternative than to what exists. 

John Koetsier:

I have to keep some hope. I have to keep some hope that if you do actually care about the user experience, as we talked about initially, if you actually do care about users, and I know it’s hard to care about an individual because you have to deal in tens of thousands, hundreds of thousands of millions, billions in some cases, if you do care, that will be rewarding. 

I think there are some examples of games that do it well and do it right and keep users for literally years and those are primarily mid-core to hardcore. 

But I acknowledge the reality of what you’re talking about and that is just this is the world we live in. Churn and burn.

Adam Jaffe:

I wouldn’t say that it’s all doom and gloom, because I think that what I experienced in that game, in that moment, is something that a lot of companies just don’t have much visibility into. And so I wanted to mention what we were talking about before, which is that ironSource has come out with this system called ad quality. 

And when you update that SDK, you get to start to see which providers provide what level of click quality. Like, hey … this is the level of click quality. These were hasty clicks, people who clicked too quickly, which is less than five seconds, most likely that’s something a bit fishy. Here’s the people who thought they were clicking on an X button that they get redirected to and here’s the ones that were just auto redirects. You can see by publisher which ones are the ones driving this type of stuff and you can go down and see which ads. 

All of a sudden you get to start to see like, okay, this is interesting. I shouldn’t have, and I’m not going to call out anybody here, that’s not the purpose of this call …, but I think the end result is: visibility is good.

But I’m not a hundred percent sure that it might change much. 

Right … if a person sees it they might say: Hey, maybe I should be prioritizing that particular SDK the problem will be then they may suffer … they may not have enough fill for that particular market. Maybe that SDK is super good for this particular market or this segment of users in which their game happens to be strong? In which case they may suffer. So you take that with a grain of salt …

John Koetsier:

It actually would work if you have remnant, if you’re part of a large studio or conglomerate and you’ve got hundreds of games, and you can say, hey, remnant goes to cross promotion, right?

Adam Jaffe:

Right.

John Koetsier:

And then you can do that in a way that is super respectful and super useful from the end user, the game or the player perspective. 

I’m not sure we’re solving this world, but I do like that look at ad quality. And part of that would be, and I don’t know how much data that SDK can collect (and especially I don’t know when Privacy Sandbox for Android comes in and SDKs are going to be basically firewalled in a location where they can’t grab everything) but you know, if I’ve got a video ad and somebody says, okay, I’ll watch the ad, puts the phone down, does something else, right? 

That would be interesting to know: is the phone moving? Is it flat and level? You know, because we always move a little bit when we’re holding our phones. I don’t know if you can get that level of information and what, where you cross the creepy line as well. So there are lots of issues there, but knowing …

Adam Jaffe:

I think it’s, you know, I’ve worked in gaming for a long time. It’s coming up on like 17 years now. And the thing that I’m always sort of shocked at is like when I meet people who are like, it’s, you know, they get so deep into like what you’re describing, you know, the, you know, the tilting, the thing that, and I’m always like, cool, man. 

Like I like that somebody’s out there thinking about that stuff because 99.9% of that doesn’t matter. It just has no practical implication. 

What are you gonna do? You’re going to say, hey, we see that that phone has been put down when I give you your reward. You know what that’s going to do? It’s going to nullify that entire experience. Not just for that player, but for every player. 

John Koetsier:

You can’t not give the reward, but you can report it to the company that’s paying for the ad.

Adam Jaffe:

Yeah, but so here’s the problem with that. And again, this is where this whole thing, it’s the same company who’s paying for the advertisement, who you’re gonna report it to, right? So you’re like, I’m company A. 

So I get a phone call from the people who are also running ads in my game and saying, hey, that money you’re spending isn’t really, so sorry, so …

John Koetsier:

You paid for crap. And I have more crap to sell you tomorrow.

Adam Jaffe:

Here’s the problem, here’s the biggest issue, right? Who would call you in this scenario? IronSource would call you and say, hey, by the way, just want to let you know all that traffic we sent you, well, actually they didn’t even do anything so probably shouldn’t have to pay us.

I guess what we already paid those guys for those impressions so … sorry actually you had to pay for it even though …

John Koetsier:

It’s almost like we need a measurement partner who kind of doesn’t care who gets paid. I can tell you what traffic caused the most actual impact and conversions. It’s almost like, you know, this, this podcast might be by a company that does some of that. 

But I get your point.

Adam Jaffe:

But you know what I’m trying to say is that the problem is that it’s a bit, you know, the lights are off, man. The lights are off and the person who potentially could be in charge, and by the way, I would never advocate for them to be in charge, and as a business owner, I would never do what I just described. 

I wouldn’t call the person and be like, hey, by the way, that quality is not so great. I mean, hell, you don’t want to have to go into device graph manipulation. But it’s a big reason why we’re in this position of IDFA deprecation to begin with, because companies could mix and match and fraud and do whatever they wanted. 

And game developers knew nothing. It’s OK, I got paid. Or on the other side, if I told you now, John, you want to buy media for me, and I tell you, OK, CPI is actually $35. But yesterday, you told me it was $2. You’re like, well, it is $2-ish. But if you want to pay the real price, without any of this malarkey, it’s $30 and people go … yeah my board won’t accept that.

Why would I do that? I would literally just because that guy telling me $2 and like yeah well that guy is also sending you 500,000 clicks and 15 installs. Where do you think those clicks are going? Who do you think those people are? So that in the end is this thing that we’re up against and I feel like …

John Koetsier:

And you have just described the adtech ecosystem, where you’ve got people who want everything for nothing and people who wanna give you nothing for everything. And somehow in between, its sort of kind of works out. 

Adam Jaffe:

I do think that if more game developers are calling these guys out as I did, then you will see something happening. If Zynga were listening and they were listening …

John Koetsier:

There were people from Unity who pinged in on that. I’m not going to name the company that you particularly called out there, but I suspect they reached out.

Adam Jaffe:

The CEO reached out to me and so did a few board members and a few other people that I knew and they said, hey, what’s going on man? They thought I had something against them and I was like, no, it’s not a personal thing. As I say, I love ads. I’m a huge proponent. It’s like the first thing I’m looking at. How can we put more ads in your game? These things are things which go unseen.

Adam Jaffe:

By the way, it wasn’t like that company all of a sudden was sending an email to that other company I was working with and saying, hey, by the way, we’re really sorry, our SDK introduced this bug which had this inability to click out of an ad. 

John Koetsier:

Yeah, yeah, yeah.

Well … what we have done is we’ve kind of pulled back the curtain a little bit today on some of the things that go on in between all the competing industries in the mobile gaming industry. It has been a lot of fun. It’s been somewhat depressing. There’s also a ray of sunshine there. There’s light at the end of the tunnel. And that is hopefully …

Adam Jaffe:

You know, it’s the only game in town, so everyone’s playing it. So, you know, it’s like, if you want to be in it, you got to just sort of be in it.

John Koetsier:

In it to win it, obviously. Excellent, wonderful. Adam, thank you so much for this time. It’s been really enjoyable.

Adam Jaffe:

Thanks, John. It’s been a pleasure.