Presented by Adjust
The rise of hypercasuals in the gaming app space is dramatically transforming the industry and how automation is being used, says Paul Müller, co-founder and chief technology officer of Adjust.
During his one-on-one interview with Dean Takahashi at GamesBeat 2020, Müller noted that hypercasuals are a relative newcomer on the scene, but they’ve disrupted the competition for user acquisition and ad monetization by harnessing automation to drive downloads at scale.
Right now, hypercasuals dominate the top of the App store and Google Play Store, with an estimated $2 billion to $2.5 billion in annual revenue. That’s unlikely to change, with Goldman Sachs’ recent $200 million investment in one of the biggest hypercasual names, Voodoo.
“Hypercasuals have changed how the app store game is played,” he explains. “Today, if you think you can just organically rank in the app stores and get some nice free organic downloads from there, I have bad news for you.”
Hypercasual companies don’t look at the daily active users within a single app, but across their entire portfolio. They developed a system Müller calls the snowball effect, taking advantage of the naturally short-lived appeal of each of these games.
As attention flags for one game, users are driven to the next app and then the next, rolling and growing the company’s user base. Hypercasuals leverage the way app store rankings work by rewarding new downloads, and basically transitioning active users at the end of an app’s lifetime to the next game. That makes the new one a huge success, and the game moves up the app store rankings.
The strategy reached its absolute peak around the fall of last year, when hypercasuals dominated most of the top lists. Anything that wasn’t taken by the Googles and Facebooks of the world was taken by hypercasuals, until the share of hypercasuals gradually fell off as the app stores took note — but hypercasuals have made a permanent impact.
Automation is the force driving hypercasual dominance of the app stores. It’s not humanly possible to manage the number of campaigns these games require. As Müller explains, if you have 20 campaigns across 20 networks, you have to manage 400 campaigns. If you want to adjust your bids and volumes on a day-to-day basis, optimize your creatives, and run a lot of A/B tests to see what works, that’s a lot of work for a typical UA department.
But now imagine you want to publish 100 games, 200 games, he continues. By adding another dimension, multiplying that by 100 or more, that becomes 40,000 or 80,000. It would take millions of clicks for enough UA managers to manage 80,000 bids and volumes — and you’d have to hire hundreds of people to manage that.
Automation technology helps them not just do this at the same scale as before, but to take it further. They can now add more zeroes. Why stop at running 400 campaigns for a single app if you can run 40,000, or 400,000, with a machine doing all the heavy lifting.
“What we’re currently doing is pushing that boundary,” Müller says. “What you see is not just some type of linear increase in ability. What you see is a complete transformation of what the marketer [themselves] ends up doing.”
But while there’s a transformation in capability with automation, the human element is still crucial, Müller says, because marketing ultimately is about human connection. It’s about having your message reach the right people at the right time, to tell the story of your company.
“A lot of companies talk about how a machine will replace marketers altogether, but I don’t believe that machines, at least at the moment, are good at being witty, or making a contextual joke, or just delivering the right message to another human,” he says. “What machines are great at is doing extremely repetitive things.”
One of the biggest changes, Müller notes, is that automation is not taking away the jobs of marketers, but giving them better jobs. Marketers are now using their time to come up with better ideas, to try more A/B tests on a campaign — to try different creative, to try different messages, to try different targeting — and figure out what works well. They’re also freed up to focus on actual contextual approaches to individual audiences, specifically when it comes to retargeting.
Automation is unlocking new campaign playbooks too, Müller says. For instance, you can prevent churn by catching the user who’s lost three games in a row and gets frustrated, and very easily reach out to that slice of users, before they quit in a huff, and say, “I want to optimize this campaign for their amount of sessions within the first 24 hours of engaging with this ad. You can look at any of a hundred points in your game to find opportunities to upsell, offer discounts for in-app purchases, and any other number of possibilities.”
“What happens here is that UA transforms from just pouring in new users at the top to taking your users and increasing their LTV,” Müller says. “The impact UA could have on your operation as a whole would explode. Already it has a pretty big role for most gaming clients, but this would truly elevate it to a different level. This is the kind of technology that we’re thinking about.”
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