Gaming, a massive industry with an eye-watering $116 billion in revenue that dwarfs music and movies combined, dominates as the most popular (and profitable) form of entertainment on the planet. Its impressive success is powered by a string of blockbuster titles and franchises, and its high-octane growth is also fueled by the advance of mobile and apps. This year mobile will account for 60% of all gaming consumer spend, according to app market intelligence provider App Annie. Analysts at Newzoo, a research firm providing market intelligence for games, esports and mobile, are even more bullish. They forecast mobile gaming apps will account for 72% of total global app revenues or $58.1 billion by 2020.
By all counts, the mobile gaming app market has never been healthier. But new data suggests the players are getting choosier. “Years marked by an avalanche of apps and new genres has produced users spoilt for choice and somewhat wary of splurging on in-app purchases.” That’s the verdict of the 2019 Mobile Gaming Apps Report from Liftoff, a mobile app marketing and targeting platform.
The report draws on data spanning 107.4 billion impressions across 1.6 billion clicks and over 81.8 million app installs to show that interest in gaming apps is strong—but so is the competition for players. At the top of the funnel, the $4.37 price tag to acquire a user is up 16.5% compared to the previous year. Purchase is the prize, and again the data shows users now need more convincing to take the plunge. Converting players into in-app purchasers costs $35.42 per user—an increase of 12.3%. However, a conversion rate of 12.3% (down just 1.1% compared to the previous year) suggests marketers can still strike it rich provided they hone messaging and targeting to deliver real value.
Robust growth is also the reward for marketers that explore opportunities outside the U.S. Liftoff reports countries including Brazil, Germany, Japan, Russia and the U.K. offer more than bargain prices. They are home to populations that are developing an enormous passion for gaming apps. Globally, gamers are more willing to pay than most in-app consumers, but they need to be motivated to ante up. It takes more than great game mechanics and a habit-forming core loop to attract and keep big spenders in the game. I draw three key lessons from my interviews with three accomplished mobile marketers whose expertise has earned them the title Mobile Heroes. [Disclosure: In addition to my work as a mobile analyst, researching and documenting trends including the growth of the mobile market in Germany, I host the Mobile Presence podcast series where I regularly interview mobile app marketing experts and Mobile Heroes, a position for which I am not paid.]Today In: Innovation
#1 Target the hot markets, not just mature ones.
Following the action led Huuuge Games, a social gaming company best known for its top-ranking titles Huuuge Casino and Billionaire Casino, to a big win in Russia (home to 66 million gamers and projected by Newzoo to hit $1.8 billion in revenues). According to data from App Annie, Huuuge Casino has been moving in rank on the iOS platform in Russia since Q3 2018, reaching number 2 on the charts in Q1 2019. While its position can vary, the title maintains a top-notch slot in the rankings, a performance that shows this market is primed to play and pay for gaming apps. “Russia ranks in the top 15 countries list revenue-wise,” observes Misha Syrotiuk, Head of Ad Networks and DSPs at Huuuge Games.
He credits the rise to the top to smart choices in ad creatives and user acquisition strategies. Localization, adjusting campaigns to be aligned with language as well as cultural nuances, is a must. But it’s optimization that turned the odds in Huuuge’s favor—specifically the capabilities to target users based on their quality, not cost. “When we made the shift from optimizing for ROAS (return on ad spend) to a cost-per-action model, we saw app installs in Russia grow 1.7x from Q1 to Q2 2019 (via iTunes app store),” Syrotiuk recalls. The winnings don’t come easy: Returns are big in Russia, but so are the challenges. In this market, Facebook has limited reach and social casino game ads are not accepted by Google, so marketers need to work with DSPs and local networks. Fortunately, this doesn’t have to be a game of chance. Syrotiuk recommends mapping out longer-term strategies with a handful of highly capable partners. (Huuuge Games works with fewer than five partners in Russia.) Above all, don’t be afraid to ask questions. “Speak to big mobile exchanges such as MoPub to get advice on the best DSPs to work with,” he says. “Once you pin that down, push your partners for insights around what flies and fails in the local market—and you’re sure to make your mark.”
#2 Embrace experimentation and try new channels.
“Never stop moving” is the business mantra for Sisi Ji, Gaming Marketing Manager at ME2ZEN Limited, a world-leading social casino and card game developer and operator headquartered in Hong Kong. Ji manages app marketing for several classic social casino and solitaire games, but there’s nothing old-school about her approach to user acquisition. Her growth hack: Constantly explore alternative channels to find new users for your app. It’s advice that applies to all app categories and encourages marketers to set—and meet—their stretch goals. Chasing repeat wins is a loser’s game, which is why smart marketers must mix it up and shift strategies to take advantage of new partners and fresh approaches, Ji explains. Start the process by doing your homework. “Do your research before choosing or testing new traffic resources and keep monitoring your data to detect fraud early on.”
Whether you’re vetting new DSPs (Demand Side Platforms allow brands, agencies and app developers that buy advertising inventory from publishers to manage multiple ad exchange accounts through a single unified interface) or experimenting with platforms, such as Reddit, that are boosting features to compete in the major leagues, it’s important to forge close relationships with the team members who can brief you on approaches they’ve seen drive the best results. It’s also critical to get to know the algorithms that power your new partners. “Different channels have different machine learning, and this will decide how fast these platforms can learn and build the right audience model to help you find the most suitable and valuable users for your app,” Ji says. The best time to test new channels is “after the product is stable and has already shown solid results on Facebook or Google Adwords.” Additional channels offer enticing opportunities, but don’t go overboard. Ji recommends testing one new channel at a time. “More isn’t necessarily better,” she adds. “Regardless of success or failure, test, learn and apply those insights to find new partners and new users who offer value for money.”
#3 Aim to acquire high-value users from the get-go.
Nearly five years of experience as a digital marketing manager at Playtika, one of the world’s leading gaming companies, and the company behind the World Series of Poker (also the number-one mobile poker game in the U.S.) has taught Harry Bienenstock what it takes to play to win. It’s actionable advice shaped by a career in marketing (and fueled by a passion for playing poker). His growth hack: keep users engaged. This demands that marketers “maintain a balance between user quality and user volume.” Bienenstock admits it’s the biggest challenge marketers face, “but it’s also where marketers can waste the most money if they fail.”
Playtika has dodged that bad hand through close analysis of the in-app interactions that point to engaged users. But Bienenstock isn’t taking all the credit for growing. “No matter the ad network, we have to make sure we’re acquiring the right users for our apps, and then keeping them engaged” he says. “As marketers, we just need to know how we define an engaged user and the precise post-install actions we want these users to take.” The events you watch and measure, per Bienenstock, depend on your app objective: number of sessions, games played and time-in-app—to name a few.
There are smart ways to market through targeting options offered by the networks. But there is a catch: Premium users come with a premium price tag. Going forward, “winning marketers will be the ones who target and re-target engaged users far more effectively. In the case of Playtika, the heavy lifting necessary to know what really indicates an engaged user, yielded insights that led to engaging new features like WSOP Clubs, Poker Recall, and Daily Blitz, that have helped the game maintain its position in the top charts.
As mobile continues to eat into total online gaming revenue in coming years, app marketers’ stakes will rise along with the growing pot. These experts’ experiences attest that it takes smart strategy, not just a good poker face, to come away a winner in the lucrative world of mobile gaming apps.