Midverse Studios is providing a tool that helps mobile-app and game developers get more engaged users. That’s because a user who really digs a game or an app is more likely to help spread the word and may also eventually spend money in it.

The company is part of a growing movement in mobile marketing to go beyond getting more users. Instead, it is trying to get more engaged users, who are targeted based on their interests and are more valuable for the long-term future of a game or app. Getting this right is critical for helping more developers reach stable financial results in an industry that is full of failures. If it works, both app developers and mobile advertisers will care about this new approach.

Rizwan Virk of Midverse

Above: Rizwan Virk of Midverse

Image Credit: Midverse

Mountain View, Calif.-based Midverse is so confident that its AppEngage Network will help developers get new users that it is guaranteeing that it will be able to get 100,000 free users for those who implement the platform in the next 30 days. Rizwan Virk, the chief executive of Midverse, said in an interview that Midverse’s platform is a “rewarded engagement network.” It’s a user-acquisition and monetization tool that delivers quality users.

Many advertisers of games and apps are dissatisfied with the increasingly expensive and decreasingly expensive cost per install (CPI) model of advertising, where an advertiser pays if a user installs an ad. Midverse is trying to pioneer what it calls a cost per quality engagement (CPE+) model. This basically means that the platform provides in-game rewards to players who complete tasks that prove that they’re loyal users.

“CPI is broken,” said Virk. “We started making games but got pretty frustrated with the cost of user acquisition. Getting quality users is a tough thing. So we pivoted to be more of a middleman with this network.”

If players finish three battles on the first day they use an app, they can get a reward. If they come back to the app on the second day, they get another reward. Through these in-game or cross-game incentives, the network and its rewards keep players involved across multiple apps. Improving engagement is important since less than 50 percent of users typically come back on the second day. But for users who stick around for 30 days, monetization rates are higher.

The AppEngage Networks software development kit (SDK) works on both Google Play or Amazon platforms. Virk said his company’s ad unit doesn’t actually look like an ad; rather, it’s more like a reward achievement system that fits within the app or game. Developers can insert their own messaging into the ad as they wish. In contrast to rivals like Kiip, which gives physical rewards for big moments achieved in games, Midverse gives virtual-goods rewards within a game.

“That gives the player an incentive to go back into the game and play again,” Virk said.

Developers currently using AppEngage have increased monetization by at least 1 cent in average revenue per daily active user (ARPDAU). That means an app with 100,000 daily active users (DAU) will have a revenue increase of at least $1,000 per day. And that’s real money for app developers.

In turn, advertisers are willing to pay more for more engaged users. If you think about it, it may cost $1 to get a user to come back on the second day. About half of the users won’t come back, so it costs $2 to get one user to come back on the second day. If Midverse can truly increase the average revenue per day, then the cost per new engaged user is significantly less using its system, Virk said.

Virk started the company with Mitch Liu in 2012. Both were former veterans of Tapjoy’s founding team. Midverse started a private beta test last fall, and it has partners such as Idol Games and Bee Cave Games (the latter has been using the system for its Blackjack game). Overall, the Midverse network has 250,000 daily active users today. As an advertiser pays for the user, Midverse pays the publisher but keeps a 30 percent fee.

The company has raised $6.5 million to date from IDG Ventures, IDG Capital Partners, and Signia Venture Partners. Midverse has 15 employees and is hiring. Rivals include other CPE competitors such as Tapjoy, Flurry, SponsorPay, Aarki, and NativeX.

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