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User acquisition is a sexy topic. I know because I moderated a panel discussion on the topic at the Casual Connect conference last week in San Francisco. We had a standing room-only crowd listening to the experts that we rounded up to talk about the problem of acquiring mobile users for apps and games among a million competing choices in the app stores.
Competition is getting so fierce that in many cases, the cost of acquiring a user is exceeding the value you can get from that player. Smart companies are hiring user-acquisition experts to help design better strategies. Our panel included a few of these: James Peng, who handles user acquisition and monetization at mobile game developer Storm8; Andrew Birnbryer, the director of business development for North America at mobile marketing platform AppLift; and Matt Bruch, sales manager at sweepstakes company Liquid Wireless. In this session, I got the conversation rolling and then handed it over to the audience take over with the questions. The result was a useful conversation that went deep into the problems and solutions.
Here’s an edited transcript of our panel session.
Above: James Peng of Storm8, Andrew Birnbryer of AppLift, and Matt Bruch of Liquid Wireless.
GamesBeat: Everyone knows this is not a science. It’s voodoo or black magic. That complexity is going to be deciphered by our expert panel here, starting with James Peng, who handles user acquisition and monetization at Storm8. Next to him is Andrew Birnbryer, the director of business development for North America at AppLift; and Matt Bruch, the sales manager at Liquid Wireless.
We did a story this morning on AdColony and a survey they did of 4,000 developers. It said that app installs were everyone’s priority two years ago, but now they all say that high-quality downloads are what they want. At VentureBeat, we did our own user acquisition survey, covering 230 developers, and they voted on what solutions for user acquisition they liked. The rankings that came out, in order, were Google, Facebook, ChartBoost, AdColony, Flurry, Tapjoy, YouTube, Twitter, NativeX, and Playhaven.
For now, could you introduce yourselves a little bit more, and then we can talk about that list?
James Peng: I lead user acquisition and monetization at Storm8, a mobile developer. We have more than 40 titles on iOS and Android across multiple genres. We have 50 million unique users that play our games each month, and we were a top-12 mobile publisher in 2013.
Andrew Birnbryer: AppLift is a mobile games-focused marketing platform. We work with 90 of the top 100 game pubs around the world. We have 178 active game publishers around the world. We focus on ROI-positive spending. We have very high-level LTV optimization and an advertiser dashboard that allows you to optimize your campaigns. In turn, we work with more than 3,000 media partners across a variety of different channels, everything from apps to mobile web to OEMs to strategic partners. We’re doing TV now. We have retargeting. We have social. We have some very cool tech on our backend. We connect supply with demand and make sure we drive you high-quality users.
Matt Bruch: Liquid Wireless is Publisher’s Clearing House’s rich media ad network. PCH, each year, spends $36 million on advertising for direct response, TV, and a whole slew of other ad campaigns. When users come to our site, we monetize them with app downloads, direct response advertisers, and a variety of other methods.
Above: Storm8’s Candy Blast Mania mobile game.
Image Credit: Storm8
GamesBeat: You guys heard that list. What does it tell you about the state of user acquisition today?
Peng: Obviously, it’s a lot of different types of vendors there. It shows you that there’s a lot of different needs in the marketplace. Each vendor is showing up there for a reason. “Best” is very subjective. It depends on what you’re trying to achieve. If you’re trying to compile a leaderboard based on different objectives, whether it’s quality, volume, price, you’re going to have a completely different board.
Based on the combination of all these elements — looking at volume, quality, targeting, and price — Facebook is rightly in the position it is right now. But I’d say the arena is changing quite a bit. Especially this year, competition has increased. A lot of targeting options are becoming available. Things like Twitter and Google are starting to emerge. I feel like this chart will continue to evolve and shift over the next year.
Birnbryer: Everyone does things slightly different. It’s about focus and how you’re going to deliver. Facebook does a great job. Facebook does a great job because you give them every bit of data about yourself and tell them exactly how to market to you. If you tell me everything about yourself, I’m pretty sure I can sell you something. It makes sense that they drive high value and high quality because it’s all about targeting.
230 app developers with 9,000 apps and 397 million MAU
told us what works best in mobile user acquisition.
It’s also about focus. AppLift, we’re 100 percent games. We know games. We know how to find users for your games. If that was a list for who are the top mobile ad networks for games, I think we’d be number one. But what we can say is that everyone on that list does things very well. NativeX is a very cool platform that’s head and shoulders above what a lot of people are doing. Twitter, in and of itself, is going to be a big platform for the future. Being able to utilize that reach for individuals to push. I think we all expect, based on the quality of Facebook, that Twitter is the next step in social.
Overall, these lists are still subjective. It’s based on small sample sizes. It’s based on individual experiences. The more people you reach out to and talk to, you’re going to find that they have pros and cons for each option on that list. Some people will love some of them and some won’t appreciate them. But I can say that each of them delivers a product that has high value.
Bruch: If you think about Storm8, a major app developer in the space, they use AppLift as their main method for acquiring downloads, outside of some of these big guys. I give them a lot of credit. But to use our company as an example, this time last year we did not have much of a presence in the app space. We were doing less than 10,000 installs a month. Over the last year we’ve scaled that to more than 300,000 installs per month. A lot partners, especially in the social gaming and social casino space, consider us to be one of their top partners in terms of quality.
If you think about that, we didn’t exist much at this time last year. AppLift has obviously grown a lot. A lot of players are coming into the space and growing and showing that they can draw a lot of value. Those top lists will continue to shake up, more and more.
Above: Fiksu Index user survey results June 2014.
Image Credit: Fiksu
GamesBeat: Fiksu is about to report its June results for the surveys they do on the cost of a loyal user [and it has as of press time] — someone who opens an app three times or so. The numbers right now are at four-year highs. What have you guys observed about costs right now?
Birnbryer: If I said you’d have to spend $1.50 to make $2, would you spend the $1.50? Yeah. If I told you to spend $10 to make $15, would you spend the $10? It’s all about ROI positive spending. I can’t stress that enough. What we can do, and what pretty much every provider on that list is trying to do, is deliver that ROI positive spending. If you spend $1, let’s find you a user equal to $1.50. If it’s all the way up the board, we’ll find you a commensurate user. You should only be paying for what’s going to provide you an ROI positive return.
Yes, prices are going up. That’s a fact of supply and demand. More and more publishers are saying, “We want to get more users. We realize that driving them to our game is the only way to get on the charts and start making money.” But ultimately it’s about finding high quality users. If you partner with someone who can deliver a user that’s worth more than you spend, the price has no impact. No matter what, if you’re making money, it’s a win.
Peng: We definitely feel the effect of price increases. As prices go up, there is a theoretical maximum to what you can squeeze out of every single user. The margin does get squeezed. As costs go up, we have to get smarter.
Even though the cost of valuable and engaged users is going up, what I’ve seen is that the price of a less valuable user is decreasing. Advertisers are getting smarter about what they want and what they don’t want.
What we’re trying to do is counter these costs by making our spend more impactful for every impression that we show out there. We do that by understanding who our users are, what they want, and how to most effectively communicate that to them. That’s another way of saying, understand the source, understand the destination, and understand the medium through which you’re going to communicate.
Bruch: In order for a campaign to work, both sides need to be winning. Just being ROI positive is huge, but you want to make it so the publisher is in a place where they’re backing out to an effective CPI that works for them. They can go out and increase the spend that they’re doing and bring in more users. You need to strike a balance so that both sides are winning in that way. For us, that can help us deliver more volume.
To move into the app space, we had to find a way for it to compete with direct response advertisers – the insurance companies that have been working on our platform for a while. Some of those increased costs helped us transition into the space.
Above: Kim Kardashian: Hollywood is one of the top mobile games out right now.
Image Credit: Glu Mobile
GamesBeat: If you look at iOS and the top downloads, you’ll see that the list keeps changing every month or so. The list that doesn’t change is the top grossing apps. There’s been one change in the top five, the addition of the Kim Kardashian app. I wonder what you think about the user acquisition behavior you see among the top five, and how everyone else can deal with it.
Birnbryer: What you can see from these top game pubs, the reason they’re in the market is because they put emphasis on spreading the word. I’m not just talking about doing app installs. There’s a lot of ways to drive users. You want eyes on your game. You want people talking about your game. You have to have friends playing the game so you can compete against them.
One of the biggest factors I’ve seen is the social competition. I play Candy Crush because all my friends play it and I want to beat them. My boss is level 500-something and that carrot keeps me going. It’s an addictive quality, having that aspect where you compete against your friends, and you’re more likely to spend. It’s about creating a game that’s exciting. That, in turn, will drive revenue. The games you guys build are so addicting that people have to spend money. “The only way I can keep going is to spend.” That’s the type of engagement feature you’re looking for in games.
Peng: The top-grossing games, you’ll see ads for them everywhere because they have big marketing budgets. All of them have different strategies. They’ve spend a lot of time and money to get there.
Storm8 has consistently had six apps in the top 100 grossing. We have a bit different strategy in terms of staying on the grossing charts. Even though we can afford to pay more, we view user acquisition as a business. Just because we can pay more doesn’t necessarily mean we will. Virality and marketing budget is still key for visibility, but I think it’s still possible for smaller players to make it by buying on an ROI positive basis and focusing on the core economics of your game.
Bruch: We’ve seen some app developers who are lower on the charts out-compete some of the higher players, on our side. In terms of doing things right on the creative front, we’ve seen a lot of times that the size of the app can have a huge impact on how many installs you get on a platform. We’ve had people bidding twice as high on our platform and getting fewer installs, because some of the smaller players come in, take a lot of pride in what they’re making, put more effort toward the banner ads and things like that — the things users are seeing before they get inside the app. We’ve gone to studios before and they have this huge creative team working on the inside of the app, but we’ll say, “Where’s the banner ad? Who’s making that?” You have to focus on the front end. You have to get the user in the game first.
Above: Mobile apps are taking off.
Image Credit: Shutterstock
GamesBeat: What would you consider to be something creative on the business side, in the face of all these obstacles for user acquisition? There’s a lot of creativity on the art side, creating a game, but what gets you excited on the business side?
Birnbryer: I have to echo what Matt said. A lot of people think that because you spend a lot of money, people are going to play your game. That’s not the case. That’s part of the reason some of these UA costs have gone up. People don’t spend the time to focus on the creative. They just dump in money and think it’ll happen. “If I show my ads enough times, people are going to download it.”
Take the time. If you’ve made this passion project of a game – if you have all these artists on your game developing all these cool features and engagement and all that stuff – put that into the banners. Or give us and Matt and some of these other guys the PNG files and we can build it out. But don’t just expect that if you have banner with nothing engaging in it that people will want to go download. You have to have something that looks cool, that looks exciting.
Some of our best performing games have fairly low CPIs because it’s a fun game. James isn’t out here spending a ridiculous amount of money on every title. But he’s built a cool game and spent the time and the creative effort to make it seem exciting and fun before you even play it. If you can mimic that experience before we’ve started playing the game, you’re going to get someone to go into the game and say, “Wow, this looks really great. I want to play it.”
Peng: Another aspect you can spend time on, creative is obviously the top of the funnel, but what about the bottom? Focus a little bit on extra optimization. Think about elements that expand the bottom and help you to fill more users in. You can spend a lot of time optimizing your creative, but that’s applicable directly to your advertising spend. What about what people see once they engage? There are lots of ways to apply your resources and get users into your network.
Above: QuizUp trivia game lets you issue challenges to others.
Image Credit: Plain Vanilla Games
Question: If games that have that kind of social competition aspect become sticky, why doesn’t the quiz game genre move up and stick around?
Birnbryer: The first reason that jumps out at me is that in a quiz game, someone always loses. Someone walks away not feeling as smart. It’s fun to be the one that’s winning, but when you lose to your friends, you think, “This sucks. I don’t want to play.”
I’ve been playing a lot of QuizUp, and the other person always drops out halfway through. “Partner has left the game.” Because they think, “I’m gonna lose. I’m done.” Nobody likes that. So if you have that aspect where you possibly feel not quite as smart at the end, that’s tough to get past.
Also, I’d look at the monetization aspect. You need the right payment walls in the game. Some games do that very well. They get you hooked. You feel like it’s fun. Then you feel like, “Oh, here’s a cool new feature.” Clash of Clans adds new characters you have to buy. A game like QuizUp, what are they going to give you that you want to spend money on?
GamesBeat: Family Feud-style games, it seems like, might be more suitable toward retaining audiences. You’re not asking for someone’s level of trivia knowledge or how much they know about sports. You’re asking whether they can accurately guess the results of a survey, which doesn’t take special knowledge.
Peng: One thing with quiz games, like Words With Friends and other games like that, it’s a bit of a novelty. It was fun back then, but for me, it lost its spark. Games like that rise quickly in the ranks and gain a lot of visibility, but the monetization factor is tough. You don’t see Words With Friends as a number one grossing game. They may get a lot of virality and a lot of user base, but there’s not a lot of motivation to pay money to beat the other guy or whatever the mechanic is. I have trouble seeing that as a big grossing area.
Question: What do you think is the best push message you can send to a user to bring them back into your app?
Birnbryer: Have it be pertinent to the game. Have it be something that’s going to catch my eye. Have something fun. You don’t want it to be spammy. You don’t want it to happen too often. I turn off push notifications when I get them multiple times a day. But how about, “Just so you know, this new feature just got rolled out. Come check it out”? Or, “Hey, we just added this for you.” Or, “Hey, we missed you. Here’s a free life.”
Give me a little something that makes me think, “Oh, I forgot I was doing this,” instead of just, “Hey, haven’t seen you in a while.” That’s the most common one. It’s just your app being needy. Gimme my space. But if you say, “Hey, we got this cool thing that everyone else loves,” all right, I gotta go check it out.
Bruch: One thing we’ve seen work with some of our partners is giving users something special. If it’s an app where you need currency to advance in a level, maybe you give them a couple extra tokens or whatever. Maybe they’ll want to buy more at some point. We’ve seen that do well.
Personalization is a huge thing too. If the user feels like you recognize them as someone who’s important to the game, that tends to work well. If it’s a blanket statement, they can read through that. You’re generally not going to have as much success.
Peng: I personally like the notes that have a little utility, like in Clash of Clans. Your troops are ready, or some person attacked you. Another way to look at it is, you can offer an incentive, but the way I would value it is, what’s the cost of re-engaging? What would you have to spend otherwise to share some kind of virality for less than that?
Question: Do you see programmatic media, self-organizing creative, and retargeting starting to take over the space? Is it becoming more prominent?
Birnbryer: I do think it’s important. As time has told us, the more you can put on to an automated path — look at building cars. We used to build them by hand. It got better when we started doing it on a conveyor belt. A lot of different aspects could benefit from that.
Like Dean said earlier, this isn’t a science. There is a bit of art to it. You have to have that personal touch to fine-tune it. But any way you can build up your database and know that, based on 1,000 campaigns, A creative is better than B creative, then great. When I reach out and start a campaign, I’m going to start with A, because they have a better likelihood of doing it well. You have to have some aspect of that in play. You can’t turn it down.
Programmatic is becoming very important. Right now, it’s still a small component of the market in general. You have to have that personal touch. But you should be doing as much A-B testing as you possibly can. That’s the only way you can know what works and what doesn’t. You can have 10 different creatives, 10 different traffic sources, and if you’re just running them and getting a big pool of conversions, great. You’re getting users, but you don’t have anything else.
You should collect as much data as possible. That’s what we try to do when we’re doing our LTV optimization for our clients. Give us all the data we can possibly can and let us utilize that to find the right user for you. We’ll let you know what’s better than this or that.
Question: Speaking of finding the right user, Facebook knows so much about our customers, targeting specific interests and demographics — everything we’ve tried in addition to that hasn’t worked out. We want it to work out, because Facebook is also a bidding madhouse where we’re bidding against our competitors and prices go through the roof every time we try to increase volume. How are you guys addressing the need to target specific demographics and psychographics for the advertiser?
Bruch: Publishers Clearing House has data on 100 million Americans that have come through our system. While you think about Facebook as a publisher that obviously has a lot of data, there are other publishers out there that have a tremendous amount of data as well. We’re one of them. There are a bunch more that set the space. You can move outside of Facebook.
Where the discussion started, Facebook is the primary driver, and people focus most of their UA efforts there. But on the fringe there’s going to be a lot more players coming into the space that have first-party data and lots of it. They might not have been a household name before, but they can drive a lot of value. If you’re looking for a user that is male, under the age of 25, that lives in a specific zip code, we can provide that for you, and others out there can do that too.
Peng: Facebook, right now, is one of the most powerful targeting tools out there, but that’s changing a lot. A lot more options are becoming available to the public. Google is giving users a lot more products that use those targeting capabilities, that leverage the data. Vendors like Amazon are entering the space. A lot of vendors are just becoming more transparent. When you buy across exchanges on DSP, you can start to leverage a lot of data sources to enrich the users that you’re targeting.
Month over month, year over year, these new capabilities and channels are becoming more viable and more available. Facebook isn’t going to be the end-all be-all. There are going to be new competitors in the space you’ll be able to buy through.
Above: Clash of Clans is one of the most successful free-to-play games around the world.
Image Credit: Supercell
Question: What are the best retargeting tools you’re seeing right now?
Peng: The way retargeting works, you have a list of IDs that you know are valuable to you. You want to take that further and find lookalikes, users who fit the same profile. A lot of ad networks are starting to offer retargeting. Facebook and a lot of the larger platforms are offering it now. It’s becoming ubiquitous.
But retargeting is dependent on how much data you have. You need a lot of installs before you can leverage retargeting at scale. Most developers, they profile between one and five percent of their conversion. There’s not a ton of that. So the question is, do you want to spend your time acquiring 1,000 users or retargeting a smaller pool of users? It’s highly dependent on how well your game is monetized in the first place.
Question: Has anyone explored email retargeting? I haven’t found a solution there at all.
Birnbryer: We don’t do it directly. We know some people who do it. There are some pitfalls. There’s all sorts of do-not-mail lists, and you have to be careful. When you’re shopping at Nordstrom and they say, “Would you like us to email you a receipt?” and then they hit you up with some other emails, you’re getting emails directly from Nordstrom. That would be something that, for a retargeter, would be very cool for your own platform. But like James said, you have to have a large user base already to start doing that.
That seems like one where it would be a pretty straightforward metric, though. You have your game players. You have their email. You shoot them a message. How much are we engaging with our email on our phones? Probably quite a bit. But not as much as, say, getting a push notification within the app itself. If you get that email on your desktop in your office, cool. You saw it. But you’re not going to go right back in the game. If you have a retargeting campaign that’s specific to mobile, that you include deeply, that takes someone directly to the level that they were in, that’s hyper-effective.
Bruch: Some of the partners we work with have said they have trouble attributing the value. Is it the person who generated the install, or the person who created that retargeted user? I don’t know if that’s something you’ve experienced as well.
Peng: We have some experience with email retargeting. We just tend to focus on using push or just new sources. We don’t spend a lot of time with it.
Question: How does user acquisition work in markets that aren’t using Facebook or email as much, like China? How is user acquisition different there?
Peng: We could have a whole different panel just for that. If you want to target a specific country, know what the top channels are. Know what the top social networks are. You have to do your homework if you really want to be there. You have to know the specific channels that will succeed, what people actually use. If you’re serious about it, go there. Look around. Look at how people interact with their apps. Twitter is very concentrated in certain geos. Certain networks are very specific to other geos. If you want to get very niche, spend some time and talk to developers and networks that focus on those areas.
China is probably the toughest UA market out there. If you’re going to target China, I recommend partnering with someone who has a very strong foothold in Asia. They do business very differently than we do here. I’m sure most of you know they have more than 190 app stores now. They’re dominated by five, but you have to have relationships with each of these app stores. They all have their own reasons why they would promote one app versus another. They have different revenue shares.
In the U.S., the best way to get recognized is to have Apple or Google feature your app on their main page where everyone is going and you get downloads. The same thing holds true for China. If you get featured by these app stores, they’re going to drive a bunch of downloads. But how you get featured in China is by having a strong relationship with those app stores, or you pay them a bunch of money to do it. You’re skipping some of the UA channels in China and going right to the app store. It’s like gaming the Apple Store with an up front contract. “We’re going to game your store.” “Okay, cool. We’re going to get paid a lot when you do that.” Know someone there, someone who knows the space.
Above: An electronics store in China, the most tempting market in mobile games.
Image Credit: dailin / Shutterstock.com
Question: Do you think that the ad markets will eventually become more transparent, showing us all the sub-publisher IDs? And if you do think that’s going to happen, who do you think will be the first one to lead that trend?
Birnbryer: Transparency is super important. We’ll give you sub IDs all day long. If you want them identified, though, that’s a different story. We’ll give you every single sub ID you want. We want that. We’re trying to do LTV optimization for you, and we want to know as much as possible.
Where we are in the space now, it’s an interesting evolution, where as much as people have very cool tech, most of these companies are service companies. A service company is successful based on the strength of its relationships and its ability to navigate the space for you. You put your trust in an investment advisor because he knows the best stocks to pick for you. You put your faith in people because they’ve proven that they know exactly what they’re doing and they can do it fast.
Transparency is important to an extent, but ultimately that’s not the key factor. Key factor is being able to track your spend and track your return. I don’t care where it’s going as long as I can say, “This user drove this much value and I spent this much.” If we have a good enough relationship with someone, we’ll open up the list. If you have a strong relationship, if you’ve proven that you’ll work with us and you have no need to undercut us – we’ll open the books for you. There’s nothing wrong with that once that level of trust is there. Transparency is all about trust.
Above: Kakao Talk: One way to get people to play your games in Asia.
Image Credit: Kakao
GamesBeat: What do you think of using a mobile messaging network to get your users for you?
Birnbryer: Why not? You look at the Korean and Japanese markets, they basically just build apps for Line and KakaoTalk. You look at Tango here in the states, they originally made games just to play with someone while you’re messaging with them. Now they have games you can build on their platform. It’s a cool idea. It’s the same idea as to why we’d market your games for you, in messaging apps.
One of our largest sub sets as far as publishers is messaging apps. We work with them because they have this great reach. They have people coming in and out of the app on a regular basis. They’re used to seeing messages. Here’s a message to go download something. I believe very strongly in working with messaging apps to get your message out.
Peng: It depends on your strategy and your goal. Is your goal revenue right now? How much control do you want to have? It varies by region. For example, in Korea, you might find it difficult to distribute yourself because a lot of relationships need to be built there. It’s a very agency-focused area. Kakao is an easy way to make a buck and get your apps distributed.
Working with these platforms, though, they also demand a lot of control, exclusivity, and things like that. You have to figure out if it aligns with your business goals and strategies.
GamesBeat: What would you say is your best tip for the audience?
Peng: One big thing, developers are very conscious of fraud. They’re very careful of where things are coming from. My biggest tip is, only use vertical channels, vertical networks, and sources that you understand. When we work with third parties, especially AppLift, we know they vet every partner that they work with. They screen them or whitelist them. They have a process that we understand and that we both agree on.
Things can get out of control. You might not know where certain things are coming from, why something is happening, why these clicks are coming in when you didn’t buy them. Always know what you’re buying. Make sure there’s a strong level of trust with every partner that you work with.
Bruch: One of the things that’s helpful for the developers we work with is understanding our audience. Why do they come to our site? Do they engage with our site on a level that will translate into your app?
We’re a bit different from AppLift in that we’re just a suite of sites. Publisher’s Clearing House has a lotto game, a blackjack game. We create our own content, and within that site we have tons of users coming in each month. To an earlier point, we’re very transparent. We’ll show you the properties. We’ll show you what the user experience is, the ad units, things like that. We’re in a different position there.
If you can, get to know the place where your ad’s going to be placed. If that user seems like it’s going to be a great fit — we’ve had a lot of success with social casinos. Our users come and enter for chances to win sweepstakes. They play lotto cards. It seems like a natural fit that a social casino would do well there. We drive high CPIs for those partners. When you look at the backend, they say, “Wow, you’re one of our top quality providers” because it’s a very natural fit.
If you do your due diligence and find partners that might have a fit with your game, based on the audience that’s going to see those ads, in those cases you’re going to have good opportunities to achieve success. I vet out each opportunity differently. It’s not a one-size-fits-all approach. You have to go in and test the waters each time.
Birnbryer: I say this a lot, but build an app that’s fun and cool and exciting first. Build the experience, and then focus on monetization later. To touch on what James said, it is about trust. This is a relationship. When you’re looking to find UA, it’s about constant contact. It’s about working in lockstep with that partner to drive those users for you. You want someone who’s out in the market on your behalf. Have that open conversation with them. Talk to them every day.
Some people are like, “I’m getting calls night after night.” That’s great. I always want to talk to you. I want to know exactly what your pain points are and what your successes are, so that I can help maximize the successes and minimize the downfalls. Have open communication. Trust that partner. Build that rapport. That’s going to help drive your business long term.
Share data. If you’re asking me to go out and find you a user that’s equal to X, then share those in-app events with us. Let me know that this channel is driving this, this channel has this many in-app purchases, and then I can go out and optimize for you. The more you make this a partnership rather than just a client relationship, it’s going to pay off. You can work with 150 different people, or you can very successfully work with five, or even one or two. Working with a handful of people, you can get so much more out of a deep relationship, as opposed to a very shallow, but wide relationship.
Question: What do you think about the optimal payback period for what you measure? Obviously, if you’re willing to get paid back in two years versus a year, you can spend more to acquire a customer. But your retention rates, your ARPPU (average revenue per paying user), might decay a little bit. When you guys are doing it internally, how do you think about an optimal payback period?
Peng: That varies by game. It’s sort of a BS answer, but that’s how it is. We run a portfolio of games across a lot of different genres, from puzzle and social casino to mid-core games. Each of them has a different payer profile. Some of them are front-loaded in terms of per-payer revenue. Bubble Mania has more than 400 levels, so we expect a longer time frame — more than six months — to reap that revenue. We also have users who play multiple games. So it’s difficult to say that there’s a very specific time you expect to recoup.
It depends on your game design. If you want to structure your mechanics to recoup in three months, then you should optimize towards that period. But it depends on you. When do you need to have your money back? If you can stretch out the player life cycle, I would offer more engagement and deeper gameplay than an up-front monetization period. That’s what I would aim toward when designing a game.
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