Creative ways to make money in the mobile games market

[Music] I am Natalie with a paddle and we saw a great panelists I'm gonna I'm not gonna introduce them it's just gonna let everybody introduce themselves but meet Tariq asani from mo pop studies laughs engine Cove from male dad are you Marcelo Ballas here oh yeah from Li bring and Paul Callan from your mobiie so guys if you can could go over just a few words about the second start I'm working as a product growth manager specifically looking at video across MOBA both on the supply and the demand side however my background is definitely more use acquisition and retention so I do come from the demand side I've

Marcelo father CEO of laboring being working with Big Data my entire life and I know that companies spend like 90% of the time trying to collect and clean data and 10% only analyzing it that's why we created leaving now oh hello my name is Denis Law I I walk for my lateral it's pretty big - company I had a developer background I came from gaming site and is a pop gaming companies and now I run business realm of business development and publisher relations at my target it's the name of the advertising platform inside melih true and we help developers to walk on Russian market and I'm Paul Paul Callan I met llamo be my background comes from

being on the business side at both Zynga and Kabam so some experience other than other side may be a way to add tech realizing one as a Kabam I kept getting pitched and I felt I didn't know it well enough so I had joined at Tech to start making the pitch and B wanted to be able to say our SDK is completely easy to install don't worry about it that's great so our panels come from all the different backgrounds and just to start off the panel guys there are multiple ways to monetize in applications as all you know since you come from a publishing science and advertising side what are the trends that you see in the current market right now the most something that stands out to you most whoever wants to start I would start with my own baby recorded video I think regarding video both from the demand and the supply side whether it's a publisher trying to monetize that app or if it's a user trying to retain their but require a new user I think it's a great format it's not what it used to be five years ago it's more an opt-in by nature now it's interesting to be in the

space considering we've come a long way with regard video as an incentive ice format five years back and now it is something off more around publishers being able to place it within the gameplay so they're very innovative ways of trying to monetize and retain your users through whatever deal so it sounds like the reward video is the main trend that you see in the market I would think so yes yeah so across all of the formats that you use and more pop this is the most popular I wouldn't say that I would say it is a growing format both on the supply side as well as the demand side interestingly they are more and more most people here actually specifically for gamers think of recording video as supply is equal to gaming demand is equal to gaming which is not necessarily true as what we see on mobile there are a lot of brands that are looking for that 30-second opt-in exposure and they're willing to pay the

kind of eCPMs you get in the network side of the business as well so that I feel like as a myth is what we're seeing agreed that a large chunk of the share is still sitting with gaming but from a advertising side more and more brands of Alling in love with robot a video because they get that 30-second exposure which they don't get in a lot of other ads I would agree with that I'd say the mix that we see a lot is performance of course who game installs but brand is starting to come out more strong with that the ability to capture the user 15 15 30 seconds is worth a lot yeah although they will be worded videos the new kid Ian on the block I think it's playable words also there's a lot of companies using playable words although you need to be careful with it because in regions where at the internet connection is not that fast is it a

little bit tricky to use it but I would say play well words are coming strong well this is a very ad focused panel let's switch off as here anything else that we see in the market come on mark it is big there is also premium there is freemium there is a net purchases there is even subscriptions that coming in anything that stands out to you yeah exactly that's what I wanted next to say that if we speak about outside of ads the next thing that is booming now is subscriptions and not only it's important to to implement it wisely in your game just to get the new revenue stream it's also important for developers to think about it creatively to get support from platforms because they like the good implementations of solutions and the like when developers

decide the business model correctly not not just putting ads everywhere or just in apps everywhere but if it's fits that yeah that's great ah are there any specific type of applications that will fit this model or what kind of like what would you suggest that whoever would be using it for their their apps I think it's still like a whole new area to explore because it's it's still something new for the developers and the experimental and there are lots of examples when you get like new boosts or something cool to do keep engaging players to get lock plugin every day not just to make most of your likes operations when you write something but also to run to talk to run

high retention I just want to I think besides subscriptions also I be obviously still is the big elephant in the room from a revenue perspective I think IP still has the largest lion's share in terms of how revenues build for ads this so in the casual gaming space specifically and I remember reading recently that thirty five percent of the revenue is coming from ads but then just 35 percent ersten write casual gaming still has a lot coming from IP and then I believe also the hard commit Co games typically have about 20 percent of their it's coming from revenue from ad revenue for monetization again the Lions the the way within the app for midco hardcore definitely contribute about 70% of the revenue but then there's still an untapped audience that comes only through monetization in terms of split

of advertising can't in-app revenue as there are like several reports I think one was the most famous was from epsilon when they measure is a split of the like and sauce type of revenue and the history was that in apps was like two three times higher like was seventy percent in total split on average not just per general certain category but in general and well that's since understandable but I saw several like projections and proved several like researchers with ambitious ambitions plans that ad revenue will overcome in-app in this year but I'm not sure was that correct or not well I think that it's important to say that advertisement probably is more efficient for some types of games for example advertisement the kids do mine ads as much as adults so that's a great format

for for the kids apps but maybe not for some of the adult apps and so on so you have to be very careful about what exactly monetization model what is that but about the participation model you were using don't use that yeah so and also another thing about a subscription I was just given them myself a talk in LA about the kids have subscriptions actually it's a really good monetization for kids app specifically as adults don't mind spending money in terms of kids education so that's not a thing to consider so if there are audience that is does all different kind of applications this is also another thing to consider degree a lot comes down to knowing your audience well yeah there are casual games I've seen for coloring where it's it's free-to-play there's some I've has some ads but the main driver is subscription because it's a content or at least every month so this is the value of what you bring to your audience and knowing your audience well

knowing what region is going to work well with dad vertes meters buying out right yeah totally so we did have a chart prepared but probably not gonna come in anyway we've done a remote research prior this panel and it looks like in 2017 reported videos was the most profitable or the most yeah effective method of monetization it brought the most profit across all apps which is really interesting maybe we can email chart to everyone later on but what is that you can share probably tareka it will be most eager to talk about it what is it like the format that we're gonna fit all of the apps like what a downsides I want to focus on a downsides of this format what is that that we should be cautious about so that's actually a really good question because the concept of rewarded video being a one size fits all like it exists a lot of certain the certain categories that it definitely works hand in hand with and a lot of the developer

is now considering the kind of revenue you make out of the water video and the fact that it doesn't intrude upon your users it actually complements you moving from level to level while you're getting the record as well I think a lot of developers at least from what we're seeing has started thinking about regarded video placements before developing the game so that it's not bandaged on top of what already exists and it's a part of the holistic view of monetization the downsides is that I've actually had a very recent experience from one of the casual gamers as an advertiser actually as a publisher what they did is accidentally had instead of for reward videos per user per day they went to eight rewarding videos per user per day now what that does to your audience is it cannibalizes your IP audience and it's and they did make a lot more money with the eight per day videos that they were monetizing with eCPMs it could never catch up to the cannibalized I apiece

so I think that's the danger to something like a regard video where if you feed your audience so many videos they're probably going to churn at some point when they're saturated from the ads so it's it's really healthy to understand to segment your organics or IPs away from reward video even when you're considering building it so I think that's one key factor that I realized which didn't work but it's not the thing about this format this is an opt-in format so people don't really turn on this format isn't that the thing so I wouldn't say so the churn is going towards your you're already paying IP users if they are being served an ad again and again and again I think there's a threshold as well you typically what I see is about four to five have even seen like the notices that have higher than five per user per day and it works for them so I again to your point I don't think it's a one size fit all but then at the same time I don't think record videos for every gamer either we have a very interesting

case from of our customers they created an entire business model behind what is the name of the future play and they created this concept thought view to play that they created the entire business behind rewarded video so they stimulate players to use or to watch videos to get credits into progress in the game it's impressive the results and it's very addictive if they didn't a B test and they saw that when they don't show ads or they don't allow gamers to see it they have complaints from the gamers they want ads to to go and and to progress in the game it's it's it's impressive and it's actually very cool making monetization a part of the gameplay that is something that not a lot of developers are thinking about and

it's a big point that effects the user retention and also TV if you make the monetization part of the experience that will only benefit the developers and the users yeah ok it getting down to your design what's your core loop what are the plans advertising you know where IEP or both anywhere you want to get creative the earlier you can start planning on that and how it's going to fit into the loop what the players might experience the better just play a plan ahead and don't forget to test I'd like to mention one more down size of off reward video it's so easy to fall in love with that format because everyone is keep telling that it's awesome it's great for retention it's like everywhere but a star I mentioned and that was a very good point that if you dig deeper sometimes it's it could be not that good in terms of like cannibalization yes might be good for retention but it's important to have balance with naps so

my point was that another not obvious downsize is that every developer is they want to have core audience they have they want to have users that keep returning to the game and they play every day more and more and more that's like your loyal audience but the problem of rewarding video if you want to monetize that audience with your video is that usually as far from my understanding rewards Etowah comes from mostly from performance and if your users like play one month two month eight three months they're going to interact less with those videos and convert less with the ads that means that even if you're like loyal audience will keep playing the game the CMS will fall revenue will fall and it's important to keep in mind that you have

to somehow to solve that issue as we either you can sell on fixed CPM as you can work with brands they all work on CPM but it's important down science down size I want to shed some light on on the flip side of that I think from buying standpoint we've seen retention rates of around 29% in the first seven days of retention from a buyer from music position retailing and Dave 14 I think we've seen about 50% and day 30 we've seen about 71% agreed all those are great numbers from a retention standpoint but then I've also seen a lot of gamers that have struggled in the sense that when they start serving too many rewarded videos they and if they were to do an a/b tested remove to to see if they're better monetizes with eCPMs they've had users that have never come back into the game just because they're so used to and they're hungry to see more and more ads and they wrote their

method of rolling to the next level is through the video if you're snatching away that video it hurts their sentiment so it's it's almost like you're churning those users for the wrong reasons what about the lesser used formats or monetization models there's some that people should be paying attention to something there in a hidden revenue potential out there in the opinion what we see is several companies in areas where the Internet's not that fast that banners are still generating a lot of revenue you know as is something that is simple to implement and the few rate is is really high so we see that all the time but again with the banners probably there is a danger of accidental hit and is there is it does it affect any kind

of retention or LTV of the users or anything like that if you have any insight on that it all depends on the way that you implemented as all the monetization strategy you need to think about it when you develop and design your game right if you try to add it in the middle of a game that's up right there you definitely will hurt the retention but if you think about the monetization when you are in the design phase I think it's you can make a lot of money with banners yet so with the same developer and the same kind of game would segment their users and if this users say is not on the Wi-Fi that will just show just banners and if it's the Wi-Fi has been used at the battery charge is full then there are other potential formats that correct if you were able to detect that

and the region that you are trying to do to distract the most of your game I would say try to do that so interesting very recently I attended a hardcover conference and they mentioned something exactly around what you just said is from a user experience perspective they tend to rank regatta very higher followed by banners which is really interesting if you think about the user experience you would think with the fat finger syndrome isn't the best but actually from mitko hardcore games who are not used to having placements yet and even the IFP moving into monetization all of that pocket moving into trying ads for the first time I think we look at banners as a safe bet versus having an intrusive interstitial baked in which is again a reactive strategy not a proactive strategy so I think that's to your point and then I've also noticed native is another good one which sits very native

in your apps sometimes and I I love using this phrase and I'm gonna use it again sometimes the native ads can be rather native what that means is you tend to miss them you don't even look like ads so you will scroll past it which means performance isn't the best but when you look at user experience they tend to rank banners than native and if you look at the publishers angle from gaming native isn't that big yet so I feel like there's a big gap in what they could say their user experience native being really high but if you look at the implementation or the revenue that it brings it's not that high so I think there's still a little gap there that we will see in 2018 essentially we actually see native come on I'm very strongly and the the revenue is higher than banner so I've seen a rhino matter pack and working with a publisher that's non gaming that is beyond in the last year switching over all of their banner inventory to native and it's because user reception is a far far better so again it depends where where they're at in the game if it's a

interstitial just thrown in your face is off and it's for me as a user it's very disconcerting likewise this here the opt-in videos are great but it has to be in a smart place what makes sense and then you can drive good retention but I agree banner as it surprised me when I first went into advertising I thought banner was a dinosaur was going away but it's it's very useful and I actually see in the next year or two native is going to start replacing banner what about the other some dinosaur formats or dinosaur models monetization models anything that you see that is going away it's no longer for me personally and I'm happy this just the the shove it in your face interstitial it can be very useful depending on what the app is but it better make sense to the flow so I think statically it has to fit it fit with what you're janus it makes sense what you're doing okay Mia model what do you think of me model I think there's a session I missed here that I wish I'd seen which was a Monument Valley which I yeah I love my I definitely I missed the

boat on that one I only played it recently and I was addicted to it so premium does exist and it is there is a definite core to it that's doing quite well so you're saying that if if the app format fits the model that will perform well but it doesn't work for majority of the apps any any inside of what is the percentage of the premium ants on the market right now and who's using it and anything at all about the premium format I mean not for you to play games order yes so I think that premium format has been the profitability in the revenue in the revenue wise has been decreasing over the years so in any terms of projections is it going to be decrease it's gonna die off or is I mean you need to keep afloat yeah I don't have a great insight on it since my focus is free-to-play and that's on the outside of course that makes sense but I I've actually seen a small resurgence in premium just for my own experience as a user I sorry it's it's not dead it's not

I don't think I think of anything to stay in a flat and it depends on who's behind it but obviously free-to-play is you immediately surpass the one barrier of having to pay to play and there of course the models now over like you play the first ten levels for free then pay so I think from the ground we're missing I remember my sheep I remember seeing premium ad about a share of 23% in terms of revenue which is way boredom all of us have seen the graph it started off I think with drove our video gave it to I IP and then went down to subscription native and then I think the second lost or the last one was premium so it's about 20 23 percent from memory I keep a secret yeah it keeps decreasing actually it's been it's been more and more useful back in 2000 maybe 14 and 15 and now it's been every year is decreasing premium is less and less popular but I've actually read the prognosis that premium will become

more more profitable and more popular when more quality content start kicking in so like the Monument Valley that we've seen in the market right now yeah and these sort of apps that will start kicking in provide that people are proposing and I will say as a parent with small children I might prefer to buy the kid object the app instead of having a free app that has a lot of ads that are not appropriate so there's a definite market for it definitely now parents tend to spend a lot more on kids than themselves so so as a parent here [Laughter] any creative monetization methods in actual life apps that you've shared like Marcelo shared about what was the name of the publisher future future yeah something else that maybe somebody can share just to start the ideas and the bright heads of the audience since I came from like publishers who had a game

publisher but maybe you remember that they used to have very cool-looking native ads native banners in catalog so I have a like weakness for game developers who despite that native is not like very suitable for games still have that type of format in the games so I'd like to back Sega sonic when they actually show native ads despite that again it's not very it's not very common to see native and some games so I doubt that it are like a lot of money compared to rewards video but still if you have place to monetize to show and it won't be intrusive why not the short I've actually seen a good example of lady pad in there in a game it was a word game over the board

on so it's like a sort of Scrabble kind of game and I was when they were credits at the very bottom there was a native ad and the publisher shared the data that actually paid quite well so there could be another idea anyone else sure I actually recently saw two examples one was round dots it's a very typical casual collect casual gaming app that most of us use I've never actually seen dots go the branding route and what was interesting is they were tapping into the non gaming audience using an Olympic gymnast with three balls three glowing balls and you I took me it took me about 15 to 30 seconds to understand I was looking at a gaming ad and not a branding ad because the only thing that got stuck in my head was the three dots it's literally the glowing dots and I thought that was a really interesting take for gamers to go into an audience where it's more that they're describing what their brand does to them it's

pacifying it's casual game but it was very difficult to understand for the first 15 20 seconds whether it was a game or am i looking at a brand I thought that was an interesting take to tap into an audience that you wouldn't usually tap into and the second one I think was a machines owned game which was specifically playing with reported playable what that means is they would give you it was a new launch and what they've done is they've done a 15-second opt-in with the video that described how to play the game and then the next 15 seconds out of the thirty second slot was literally the gameplay itself so they had baked the demo video along with the actual play ball with an end card at the end I thought that was beautifully executed it's very good and I would say example I've seen this works well as combining that formats to play off each other so rewarded videos seen a lot of success where you cap reward a video at 2 or 4 per day and if you have off wall or want me to do off the wall when you

find people to hit that cap you get them a link and say well if you want you can go do more offers you I worked well as there people that want to grind off the wall tends to have a lot of drop off people don't necessarily want to install something just to get credit but it worked amazingly well because the CPMs are quite a bit higher on offer wall so you play around with it you can just play one ad off or another and still have good retention it's very interesting speaking of well for a mole what do you feel about this format is it still gonna be trending yeah I think offer well is is here to stay it has to be in the right place you know there there were there were times in the past where people advertisers wanted a weight off all because they felt it was just too much click-fraud no but inside as a game developer there were definite places especially as he turned it more towards hardcore mid core you know it Caban we were famously no ads at all but if you looked around you would find the ads as he it was an offer wall with the the trigger was really low you had to be playing for two weeks not have spent anything in the game and go to the store

inside the game scroll off the screen and then you would find a link for earn free gems it was the offer wall but it actually for the amount of money we made a Kabam it had is still a material impact to be honest i'm so skeptical about other roles like right now so i wonder whether they drive any like any results for advertisers now maybe you can share I don't know yeah we don't see a lot of results in overall with our cost you mean for the US data point yeah it it looks like it's really clean and the opposite direction of everything else we touchin me touchin the UA a little bit over here so the the best incentive format would not be the over wall that would you recommend what it would be the best format for the incentive there something else the no four walls would be wrote a video that's the only other option that we can use right yeah I think it's

substituting naturally they offer wall with the reward video that I think you can control better the experience and everything else and and have a higher eCPM as well I think that mixed example was very interesting as well with the video as well as the awful combination I think that would work yeah and from an advertiser perspective a lot of the offers they offer wall that are effective are the more the CPE where it's a cost per engagement so they have to not just install that play first level it has to go and then they see response they have retention from its but it's definitely to be aware of if the advertiser doesn't like it you'll not earn money agreed if no one else has anything to Adam we can be moving on to our last question it's about the prediction for monetization in 2018 what do you think we get a C in the following years or in the following year well I

think a lot of new things coming in terms of playable ads play poets are a bit tricky nowadays because it's very limited you cannot really use for 3d or is there some restrictions with 3d and there's new formats coming in html5 that will be easier to to use and but again I think you need to to create your monetization from the beginning you need to think about it and whatever the deformity are going to use it needs to be well planet from the beginning I think trends for monetization I want to

say I guess two things one would be I can see a lot more IP first revenue models moving into the ads monetization model so I expect a lot more of that mix where you're not just I appear and not just ads monetization it'll be more of a mixed approach and then the second thing is probably something that we ourselves personally Moe Bob is also working on will pre advanced betting I think that's a trend that's picking up from the online space coming very quickly into the in-app space and I think once we get the ball rolling with more and more advertisers and more and more DSPs and networks competing for the same priority for a publishers supply the monetization behavior of how we republish as the

eCPMs that currently get will change so I think those are the two key big ones that I see coming for 2018 if you speak about like outside of ads like in position of apps in general I I think like well well there are lots of that we can say but there are two clear trends from my perspective first one is LiveOps lab ops is now like it's not a trend is already like must do must have 14 companies but as far as I like see in the market it's mostly done for in-app purchase for companies that are more on in apps while there are growing number of companies that earn more and more on ads only like super casual games like voodoo like ketchup other games and what they

already do and I think they tend to do more is live ops for there you even like super super simple games but to keep players engaged give them more content so ads will be like developing even if it's still like super simple game and second one is through user-generated content so if we see for example what glue thus with a design home with the roblox when you want when developers give the users like mechanism like tools to create something the first one they now has to spend less on creating content because it's so expensive for four users for companies to keep their players engaged to role new levels like every week and second part is for example if we look at our blocks and similar cases when you give tools to

develop to your users to build something and to sell to to earn money for themselves you can get your share so it will be your like new revenue stream for the company itself yeah I think roblox is phenomenal they did a great job at that and it reminds me as well with a lot of the the streaming and eSports coming up twitch and others have looked at ways to allow the top top-level streamers to earn portion of the revenue that they get off of it so they'll be interesting to watch as well very very interested if nobody has anything to add we can move on to the questions from the audience if somebody has any questions and if not then we can all go in eat so we've tried non-gaming ads again and

they monetize we get far less money for them than game ads and obviously we don't want game out in our game because cannibalization so our non game ads growing will they grow in the future because you know they're kinda as we prefer I want to comment that because this is again coming back to feature play they don't bother to have other games ads on their games at all they did an analysis and there's no influence because the gamers will be using and playing different games all the time so and they will see ads from games on Facebook social media TV whatever so you are losing money for not showing ads and this not gonna stop them to to play other games at all so this is

a real data coming from a company that's using and making a lot of money so we were doing that research and I was to bring in Jets team with the future play guys and there was no cannibalize I should at all if you're going to lose your player you will go in to lose it like anyway I would say non-gaming is also growing I do agree with everyone else here there is less probability of cannibalization if they have to leave the game they will leave the game anyway but that's not to say that the non-gaming categories are not going but definitely growing more and more into the in-app space

I think it's it's a quick trend that's picking up very very quickly you'll be surprised how many if I took top 200 and 250 a domains they're alive for the most engaging playable and rewarded videos it'll probably be a 50/50 split between gaming and on gaming so the pie is pretty big I was at keep in mind with a king they're big enough to where they do the direct deal with coca-cola same with Zynga we did really well that American Express but if you have that skill you can do the direct deal otherwise I'm very excited that was what Rick is saying with the brands finally getting stronger in games yeah all those good ideas it's also worth noting is probably more value in looking at how the ad fits in the flow of the play than worrying whether it's kind of lighting or not I know you've known you've got the right positioning can be dramatically more effective anyway I mean that's it that's funny we've seen back in the day sonars don't know there's one more question I want to run

run into that and then I will go look close yeah hello it's it's a question I suppose mainly for tariqa what sort of average eCPMs are you seeing with video ads rewarded video ads brands and gaming so depends on seasonality so just that the fact that we are still in January the brand still continued to do spend in games and I think they're evolving and getting more and more educated that it's around the audience and not the content of the game itself thereafter the audience or I think they understand that at this stage q4 has been a very strong quarter anyway for eCPMs to grow because they have a lot of direct deals and they do get that 30-second exposure with an opt-in intent which they don't get from any others so eCPM was I would say anywhere in the range q4 might be a skewed number to give you but it could be in the range of five to six like any other video would anyone else about the eCPMs well it also will depend on the format

of your app specifically so for example if you have an app that monetizes on all sorts of sorts of ads and this is for adults then I would say that for what it video would pay you the more and I will go to this capable video and then static interstitial and move on to the banner of course but it would be the last one but if you have again the kids apt and don't expect what we did to very much but if we do probably will go drop to the luck third place of the most profitable and thus capable video actually will probably or the static interstitial will be even more profitable for you so will depend on the you should experiment with different ad formats and see what will be profitable for your game specifically mine relatively recently and historically has always done I rolled it out only but then he experiments with its tissue and so that when he added it didn't have any negative impact but actually when it should go out again he lost quite considerable amount of revenue so yeah it's interesting yeah I

would say that you you need to pay attention to your eCPM and to make changes really fast on your strategy you need to look at it every day and if it possible to change and to optimize every day your strategy because that that's the way that you are going to improve your CPM whatever is the is there that you you are using or the ad format that you are using pay attention for it get the data there look at it and just try to negotiate with those guys you know strike the most of them [Music]

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