Make 2019 the year of going global with your app. There’s a world of opportunity outside your home market and across Asia–if you know where to look for it and how to get the most value. We have a crash course in both when our host Peggy Anne Salz catches up with Robert Garfinkle, Senior User Acquisition Manager at Nexon M, the San Francisco-based mobile division of the South Korean gaming giant Nexon, the company responsible for MapleStory, Dungeon and Fighter and the free-to-play business model. Robert, a Mobile Hero recognized for his app marketing expertise, walks through what you need to enter and excel in the Chinese and Korean markets, and tells us why India may be “the” one to watch. In addition to sharing tips to help you grow your reach, Robert also weighs in on the UA and ad tech developments and trends that will define the next year in mobile games.
Transcript
Hey, hello and welcome to Mobile Presence. I’m your host, Peggy Anne Salz, with Mobile Groove, where I plan, produce and promote content that allows my clients to reach performance goals and scale growth. And growth is of course what it’s all about here at Mobile Presence because this is where we get the inside track on how you can grow your app from the UA experts because that is their daily job, and they’re amazing at it as well because they have achieved success that has earned them the title of Mobile Hero as chosen by Liftoff, a full service mobile app marketing and retargeting platform.
Now, when we talk about growth, you might think about different approaches. You might think about localisation, that’s one way to get outside of your home market and tap into other markets but our guest today is going to tell us about how to look into other regions and the opportunities there that are just too good to miss out on.
So, our guest today is Robert Garfinkle, Senior User Acquisition Manager at Nexon M. Robert, great to have you first of all on the show.
Thank you for having me, really excited to be here.
Well, it’s good to have you on the show, Robert, and as I said, Nexon M. Now, for most people, they’ll have recognised that as a huge name in gaming but tell me a little bit more about the company.
Sure, so Nexon M is the western publishing side of Nexon, the Korean gaming giant, I guess you might say. So, we focus on bringing games from Korea as well as bringing games locally to market in what Korea considers the rest of world, that is everywhere outside Korea, Japan and China.
So, you don’t only just know a lot about Asia because of your job, you’ve also lived there, I understand, and also speak the local languages, is that correct?
Yes, I spent four years in China, first as a student in Sichuan and then in Beijing working – that’s where I got into gaming, I started there at Elex-Tech which you might know from Clash of Kings.
So, you know the areas and I’m excited about the numbers, I’m a bit of a data nerd and frequent listeners will know that – I look at the numbers, I see what App Annie, what Apptopia, what others are telling us about where the growth is, where the opportunity is. I’m particularly excited about China because it has eclipsed the US in terms of app revenue, and I believe app spend – what are you excited about when you look out there?
China in particular is a very fascinating market. It used to be that you could just publish an app in China, see installs and it would see revenue. It really isn’t quite that way anymore. Heavy localisation is required to the point where really if you look at the App Store now and the rankings, you’ll notice that by and large everything that is earning substantial revenue is produced and operated out of China specifically.
Now, that’s not to stay that there isn’t opportunity there, you can go with a local publisher, Tencent or NetEase or others but they take a pretty hefty cut and in general, it isn’t the market that we thought we knew, I guess you might say. Also, that doesn’t even mention the licensing issues right now which are pretty substantial. It’s difficult to get any games into the market right now.
I mean, that’s a point, we’re going to get to licensing just to sort of do that at a high level but, you know, the point is that to get into China, you have to have a partner, you have to have a way in. Some app companies I’ve been talking with, they’re doing it differently and they’re trying to get in with the companies that Chinese companies do business with – sort of like the partners of the partners. Does that sound like an in-road for you?
Yes, that sounds almost exactly the way that the Chinese market operates. The Chinese market operates on kind of, there’s actual capital and then there’s social capital which the Chinese call “Guanxi” and that is something that is part and parcel for all of business in China – you really need to know people in order to really facilitate those business dealings.
So there are some changes in the rules, I think it’s around March, don’t quiz me here, Robert, but I think it is around March that we have the rules – they are now effective that new games are just not being licensed in China. Does that pretty much sum it up or is it a bit more complex than that?
I mean, big picture, that sums it up. My understanding is that the complaint from the bureau that is responsible for doing this is that it is harmful for children which seems kind of shallow but there’s a lot of talks about myopia, causing nearsightedness, things like this is what the kind of official concern is but I think it’s really just that gaming is such a large market within the Chinese domestic, you know, sphere that they’re really concerned about having some controls over the content.
That’s what I’m also thinking too because it’s a little bit almost too concerned and too much focused on our wellbeing to think that you have a law for our wellbeing, but I’ll leave the cynicism aside here for the moment. But the impact of this and you’ve written about this in one of your new blogs actually over at Liftoff is that, you know, basically Western markets are going to be flooded with Chinese apps and games because they can’t do it in China, they have to look to other markets. So, one, I guess what, 2019 is the year of the flood, would you say?
I mean, maybe. I think that there’s not been a year without some inundation but what I think what we’re seeing now is kind of talent reaching a particular head in China. There’s a lot of people coming back from overseas who are working in games and people who are really talented engineers and really talented at what they have been working on which has been at big western companies as well. So, there’s a lot of talent being built up in that market, but it doesn’t have an outlet within its domestic market which means that of course we’re going to see a lot more Chinese-produced games that may or may not hit quality bar.
So if that’s what’s going on, you don’t have to go into great detail of course, that’s not the point, but you know, you are also at a company in this space – I mean, is there anything you’re doing to I wouldn’t say prepare but what is the impact on sort of how you see and plan your business in the coming year?
Well, I can’t really speak for the higher ups at Nexon of course, but I can say that our part as Nexon M is to really be part of the westward strategy for Nexon. We’ve been facilitating their launch of games developed in the Asian region for the last three, four years now – I’ve been personally working on games for the last two and a half years and what these are is in general high quality Korean action RPGs and strategy games and we even have a few Indie titles that did really well in the domestic markets in Asia and they need to figure out the westward strategy.
And in a way, I’m just curious before I ask you more in that direction because I know that when you want to take your game east, I remember lots of conferences and discussions about what does your game need to have to attract an Asian audience? It would be interesting to understand what games need to have from Asia coming to the west – is it a real refit or what goes into that to make a winning game, you know, go from east to west rather than west to east?
So in a lot of ways it’s pretty similar the process, it’s just kind of inversed cultural localisation is vitally important as I think we are all aware of on some level a lot of Korean, Japanese and Chinese art aesthetics are a little bit jarring. Sometimes the UI that are users are looking at is too busy, sometimes the kind of costumes that the characters are wearing are considered a little bit inappropriate – all of these things get changed in the localisation process from a product perspective.
And then in the marketing of it in the user acquisition side of it, because it’s such a niche market, you really have to facilitate higher degrees of targeting than you can with something that is more casual or more broad market. You know, it’s not My Talking Tom, these are games that are built for a fairly core audience who are more or less already self-identified, they kind of know where they are.
And of course you’ve been very instrumental in helping that – we’re going to talk about some of the things that you’ve done to help those be successful but we’re also going to talk more about the growth markets for our listeners so that they can be more successful and grow their app footprint in 2019 and beyond, but right now, we have to go to a break so listeners, don’t go away, we’ll be right back with Robert Garfinkle, Senior User Acquisition Manager at Nexon M.
And we’re back at Mobile Presence. I’m your host, Peggy Anne Salz and we are back of course with Robert Garfinkle, Senior User Acquisition Manager at Nexon M. And Robert, right before the break we were talking about your experience because you know a lot about Asia, you’ve lived there, it’s your job to make Asian apps specifically those of your South Korean gaming giant, Nexon M – those apps sort of rock it in the west. Part of it is of course the product, you know, the app has to be localised as you pointed out but when it gets down to user acquisition, I mean, how do you turn exciting game play into what will engage audiences and boost UA?
Sure. So, really you’re talking about user acquisition which is a several step funnel here. We’re talking about creative exposure in the form of impressions through to an install and then subsequent post-install activity and revenue, right? So, we’re looking at the full funnel and because it’s so niche, we have to be very careful about the impressions side of it. So, in general on the creatives, we have a very game-play focused series of creatives – we like to involve local talent in the form of like influencers, we’ll have people kind of like give a shout out to the game or we’ll have interviews with voice actors where you usually hire local voice actors to do the sort of like western voices.
So we’ve recently had for Darkness Rises, one of our more recent games, we had one of the voice actors from The Witcher, one of the main voices actors from The Witcher 3 which was a really large AAA console title, as one of the main characters and he did really well as like a UA asset.
And then from there, as we’re moving down the funnel, we build rather sophisticated ways of analysing this data in our MMP, in our mobile measurement partner about the install really anymore.
Yes, I know, that’s amazing when you think about it in the games industry because that was what it was, it was all CPI but now it’s really engagement. What does an engaged user, rather, look like to you? How do you see the signs of one, maybe not just engaged, but one who has got a high propensity, high probability to be also a valuable player?
Sure. It’s all a numbers game so we’re not looking for an engaged user, we’re looking for a group of engaged users or a higher than normal rate of engaged users on this or that source or app. And really the way that we think about looking for those users is through programmatic solutions, we look at things like Facebook has a lot of different ways of targeting these users or Google UAC has a way of optimising on first time purchases and purchases are basically just concentrated engagement events.
So, you know, if we have these events all listed out in a way that is ingestible and we have an understanding of the way in which users generally engage, then we can find outliers, we can find positive outliers, apps that have especially high propensity for users that are similar to this, things like this.
It’s interesting that this approach is almost universal. I mean, we’re talking about opportunities in growth markets but the strategy you need to follow is pretty much what you would follow no matter what, it’s data driven marketing, the product fit has to be right whether you localise that or, in your case, very smart move to use influencers to make it relevant, to make it interesting. Is there any real massive difference?
I mean, there is no magic bullet, there is no panacea, a really good product always helps – really ultimately UA is not something that can solve all the world’s problems by itself, it’s really just a way of propagating in an ROI-positive manner a product. So, there are some secret sauce elements in what we do as well as I think almost any team would tell you the same, you know. There are ways that we think that we move faster than others in our programmatic strategies but I don’t know if there’s really a panacea.
No, no, absolutely not. What I meant more was the growth markets themselves. We went through China and we say it’s massive, the numbers are right, it is big, but the licensing problems, other things, it’s just not an easy nut to crack. What are some other growth markets on your radar for 2019? I mean, what would you be excited about or what should our audience be excited about if they’re really serious about growing their app footprint?
Sure. Absolutely, this is an area that I love to talk about. So, I think of digital markets in the same way that I think of populations – there’s a famous model with the four steps of human population growth and it goes: pre-industrial revolution, people are having a lot of kids but a lot of them die and so on, and then the industrial revolution happens and medicine happens and people have a lot of kids and a lot of them live. And then so on and so on until you reach a point where people are having sustainable family sizes and growth because the economy is up and medicine is up.
The same thing happens in mobile. We have an explosion of installs that happened right at the point where devices become available and those are generally very – they have trouble retaining, they don’t really understand what the games are about, they have poor literacy, they have very, very low monetisation because they’re probably not actually capable of monetising because of the banking systems or this or that. And that happened in India in 2016 where we had just a massive explosion of installs, it became one of the largest installer bases. And then it didn’t really monetize in that year, so it was actually viewed as kind of a net loss, our ROI per daily active user went down because we had so many more installs.
But then the following year, 2017, and then into 2018, we’ve been seeing steady growth in that market from a monetisation standpoint and this has been a repeating story. This happened in Russia, it’s happened in Turkey, it is happening right now in Brazil. India in particular is the largest though because it has all of the opportunity and all of the potential of a Chinese market without quite so many government controls.
I was going to say that’s exactly it – without the red tape but you put it a little bit better there. It is an exciting market, I don’t know if you’ve thought about it for your company but as an expert in your area and understanding international opportunities, similarities and differences, is this one that personally excites you? Have you thought about how one would need to shape an app or an app marketing strategy to really take advantage and tap this opportunity?
I think the Indian opportunity is really something that I’m going to be able to touch the surface of but I’m not sure that I’ll ever get to really dig into and the reason is because the solution is going to be domestic. There will be a series of app developers in India that really tap the local market and really expand it.
We’re starting to see this with other content, there is no YouTube-type platform for India specifically, but they are on YouTube and we’re seeing the T-Series, the music channel out of India, really rapidly moving into the number one subscriber position on the platform which is a really amazing achievement and it’s driven mostly by the Indian domestic market. And I think that we’re going to see more and more of these home-grown types of products coming into their own in the market but really a rising tide lifts all boats. The more that users are accustomed to using in-app purchases, the more that people are able to set up the actual banking apparatus to do that, the more literacy that people have in gaming, the more it’ll make the market opportunity meaningful for everybody in the industry and eventually it’ll become a little bit closed off but we’re a few years off from that.
That’s a really good point though, Robert, because I have seen – I was just looking at some other apps today for a different reason, I was just researching India and it was interesting that they have many of similar apps to what we have but just sort of India-focused. So, there was this AI nutrition app that is India – I think it was Healthify or something like that, don’t quote me on it – but I was looking at it and it was like we have this in the west, but this is very different, this has some AI, this is Indian-specific content. So you can see the appetite for apps and you can imagine how, to your point, the more apps we see, the more apps they see, rather, the more potential opportunity for western companies with apps that are just relevant to that market, would you think?
Oh, absolutely. And just like in the Chinese market, you have an amazing phenomena of engineers that have been working in Silicon Valley and in the west who will eventually be moving back to the market and driving growth and innovation. So, I don’t know Healthify in specific, but it sounds very similar to western solutions here and I wouldn’t be surprised if some people involved with it were, you know, from this region, I’m in the Bay area.
Absolutely, especially in the Bay area where you are, Robert. Well, I have to go to a break right now, Robert, but when we come back, let’s talk a bit more about what makes you excited, what’s top of your radar in 2019 and where, of course, that app growth is. So, listeners, don’t go away, we’ll be right back.
And we are back. We’re back to Mobile Presence. I’m your host, Peggy Anne Salz with Mobile Groove and of course, our guest today, Robert Garfinkle, Senior User Acquisition Manager at Nexon M. And Robert, right before the break we were talking about India which we share as an interest and the enthusiasm for growth there, that’s not of course the only growth opportunity looking ahead to 2019 and you have vast experience, working at your company, making certain that you’re the bridge, as it were, connecting what’s hot in Asia and east with what’s hot in the west. So, from that perspective, what has you excited looking forward to the markets in 2019?
Sure, so I think that there’s kind of three parts to the question you’re asking here. There’s what’s exciting in terms of markets, in terms of countries and where growth is going to happen, what’s exciting in terms of sources and channels and strategies, and what’s exciting in terms of products, right? Those are three different ideas.
It’s all of it in one. Why don’t you just take them one part at a time?
So, in terms of markets, I think that we’re going to see continued growth especially in the markets we were talking about before but I think Russia in particular is ripe to come into its own and become what we consider a western market in terms of monetisation. Maybe not on a per user basis but in terms of an aggregate impact on your bottom line Russia might become – if you have a localised app of course – Russia might become top ten which would be a really big change. That’s the first of the brick markets outside of China that really breaks that ceiling. And so I’m keeping a close eye on them and we’re prioritising localisation for that market.
In terms of strategies, and in terms of the way that we’re engaging with media, the growth of hyper-casual has really served as a catalyst. Hyper-casual, for those who might not be aware, are very broad, very casual experiences as the name would imply on your phone that are just a few minutes of kind of tapping around and they serve you lots of ads. As a result of that influx of traffic, and the relatively poor quality of it, that is to say the users aren’t accustomed to gaming really, they aren’t involved with it, they’re not the niche audience that we’re looking for – we’ve had to get a lot more sophisticated about the way that we remove those apps or target those apps in terms of bidding.
So I see 2019 as an area of major innovation in autonomous bidding and I think that we’re going to see real movement in that direction, in the performance third parties and layers that sit on top of your existing networks or existing buying strategies that really push the envelope on what is and is not relevant for your specific product.
How does that fit incidentally in with everything I’m hearing about the excitement around in-app header bidding?
You know, header bidding is – it fits very well supposing it that can all play together but we on the performance side of buying user acquisition, we are looking at the install point for guidance so we still pay on CPI, that’s almost always – I think that’s going to remain the case until we have multi-touch attribution – but the way that header bidding changes things is that it will allow us to move like one step up on the funnel and allow the algorithms that guide us and especially on the DSP and the SDK side to get a little bit smarter about exactly when they want the impression versus when they don’t. It kind of eliminates a little bit of the waterfall from my understanding.
And we talked about two of the three, so the third is also the tech. I mean, are you one of those people, Robert, you’re just excited about AI in the New Year or any other hot topic – what is it that you think about in terms of the big picture trends?
Sure. Well, when you say technology, I don’t see a lot of movement on the algorithms that we’re working on. I mean, I see things improving and I see next year is a real – see change in that algorithmic bidding but what I hear when I hear technology is also the products themselves. And I think that next year is going to be the year that MMORPGs resurge in the west, I think that we’re going to see people try to bring from Asia to the US and other markets these large MMORPG massively multiplayer online role playing game experiences similar to lineage but I think we’re in a moment where the APAC market is mature and MMOs drive a huge chunk of the revenue.
However, the west is a very immature market for this and I think that we’ll see four or five major attempts by Asian developers in the coming year to break that market.
So MMOs are extremely complex from a technological standpoint. They require very, very sophisticated servers and there’s a whole language aspect that is very complex so they need realtime translation capabilities to the user device and they have lots of anti-cheating mechanisms that are a little bit hard to deal with and so this is what I think is the most interesting and I want to see a real breakout in that market in the coming year.
And judging from your expertise and experience, I think that you’re onto something there. I’m wondering also for you personally, Robert, what’s 2019 going to be about? I mean, you’re obviously there, you’re Senior UA Manager but there’s a level of personal development as well. What direction might you be developing your talents in?
Sure. I mean, of course I think moving up the chain means moving a little bit into more leadership, moving into more of a sort of over-arching role, thinking more about products and less about the day to day of buying media. I’m really interested in trying to drive product innovation from a UA perspective. One thing that we’ve always lagged behind on and I really want to see grow is ad monetisation, you know, it’s in general been something that we have because we’re core or mid-core. We have generally kind of neglected but I think that at this point in the apps eco-system, it’s something that we really need to be thinking about more so I’ve taken it as kind of a personal mission to try to get more ad monetisation in our games in the next year.
I’d love to check back with you about that, Robert, because that really is the question – is it mobile video, rewarded video is really doing well, what are the other formats, what are the other ways, you know, lots of brands are getting involved in games, it’s resembling mobile marketing as we know it and not just app marketing. So, that’s going to be very exciting to stay up to date with you.
Yes, sounds good, we should check back in.
I absolutely will. And in the meantime, how could our listeners sort of stay up to date with you? I know you have an excellent blog and a dedicated page over at heroes.liftoff.io but how else can they keep up to date with you?
Oh, sure. You can reach out to me on LinkedIn, Robert Garfinkle. Of course you can go and visit the blog, I’m sure that there will be more – I will be speaking in February at Mobile Growth Summit, San Francisco…
Cool, I’ll be there too, we will meet, that will be awesome, and we’ll kick off, I think, an ongoing discussion because as you try to innovate ad monetisation, I certainly want to keep up with that. And listeners, you can also keep up with me throughout the week or find out more about how you can be a guest or sponsor on Mobile Presence by emailing me, peggy@mobilegroove.com, that’s also where you can find my portfolio of content marketing and app marketing services.
And that, my friends, is a wrap of yet another episode of Mobile Presence. Be sure to check out this and all earlier episodes of our show by going to webmasterradio.fm or you can find our shows on iTunes, Stitcher, Spreaker and iheartRadio simply by searching Mobile Presence. So, until next time, remember, every minute is mobile, so make every minute count. Keep well and we’ll see you soon