Churn is a dirty word in mobile apps and games. It refers to users who don’t come back. And mobile gaming analytics firm Soomla has found that some game advertisements can cause up to three times as much churn, or loss of users, as others. It also found that advertising the games of direct competitors isn’t as damaging as you might expect.
Soomla did a study of advertising effects on 4 Pics 1 Word, a casual mobile puzzle game made by Germany’s Lotum. The game is available in eight languages and it is one of the top word games in the charts. Soomla analyzed advertisements for different games within the Lotum game, and then evaluated the effect the ads had on the users.
Common sense suggests that advertising a rival word puzzle game inside Lotum’s game might not be good idea, as it could theoretically cause a user to leave 4 Pics 1 Word and never come back.
“Many app publishers who use ads face the question of whether or not to advertise direct competitors and similar apps,” Soomla said in the report. “Most of them answer these questions with guesses and gut feelings.”
Lotum, however, wanted to apply a data driven approach to make sure they were taking the right approach. Soomla used its Traceback mobile monetization measurement platform to analyze the data.
Lotum discovered that some advertisers are churning three times more users than others. It also revealed that the results can be different in different countries.
When comparing direct competitors to other games and non game apps, Lotum discovered that direct competitors were only churning 11 percent more users compared to other games that were promoted in the app. But the eCPM (effective cost per mille), or ad rate, for director competitors was 90 percent to 216 percent higher compared to other games in the territories of France and Germany. Lotum concluded that the amount of money it received from the ads outweighed the loss of users, and that it should allow those competitors to advertise in its game.
It measured users who did not come back to its game in the week after clicking on an ad. The 4 Pics 1 Word users churned more often after they clicked on ads for MZ’s Game of War, which was far more than ads for Battle Bay and the average advertiser. Game of War isn’t a competitive game, but something about the ad experience may have caused the churn.
Direct competitors showed slightly higher churn rates in the U.S. and slightly lower in Germany with the big difference being in France. At the same time, non-gaming apps were churning fewer users consistently across all countries.
Lotum concluded that blacklisting direct competitors should be evaluated on a per country basis.