How are the top mobile game publishers growing their app economies?

[Music] hi everybody make us all excellent clicker is here excellent so this was a really good tee up from the previous speaker some of the things that he mentioned that we in the ad monetization business don't publish we actually do publish I gave a great talk last year about really creative ways to optimize your ad monetization by how you're working with the gains I'm not gonna be talking too much about that today I wanted to change things up a little bit so today I'm gonna have a little bit more of a holistic view and how you can grow your apt economy there's gonna be a focus on monetization and there's gonna be a focus on user acquisition because these are two things that are really interconnected right they're very much two sides of the same coin and we really want to try and hammer that in to people to get get that understanding that you know you can grow your you can grow your

economy in many ways you and people tend to just too blind at one the other one yes yes so let's talk first a little bit about monetization because that is a really big part of how you can optimize your app economy and just like I said now here in the intro ride I'm repeating myself a little bit but a lot of the talks I've been to many of these conferences over many of years I've been in the industry in general now for over 10 years there's always a very strong focus on the user acquisition cost of it because it's a very definable number it's an invoice that you have to pay at the end of the month so it's very easy to get very focused on that one and very often we get questions everyone saying hey see guys are too high see guys are too high is CPI's are too high well not to sound like an right but they're really they armed like see guys are at the right level it's not a pretty no this is sort of their the app install business it's not a perfect

market but it's fairly close to it their supply there's demand and you want to took a basic course in economics know that those meet roughly somewhere and that's the CPI you're paying so it's really not too high it is the right CPI for the market it may be too high to you which is quite common and really frustrating but the general sort of maybe one of the general themes of this talk is that well there really isn't that much you can do to optimize your CPI there are no magic wands you can waive to cut them in half at least not if you want to have sustainable scalable growth so the key thing to focus in is actually on your lifetime value because the more money you earn the higher CPI s you can afford the companies that are spending a million dollars a day are not doing it because they're incredibly good at user acquisition and that they managed to get the lower CPI's they can do it because they have their highest earnings their highest conversion into paying users so that's really ultimately the key thing of it all [Applause]

so of course I'm from ad colony so of course I'm gonna talk about ad monetization but I'm not just gonna talk about that but it is a key revenue driver for an increasing amount of companies it's really fun to give this talk here in Helsinki and I also in spite of being Swedish I live here so this has become my mobile gaming home if nothing else and Helsinki is really the part the I mean it's a leading gaming cluster as it is but when it comes to doing really good video monetization Helsinki is really far ahead most of the studios who are based here or incredibly good at it I tend to credit Roby over that because they have been very good at working with that monetization from early stages there's so many people now who are at the different gaming companies around here who at some point in time spence's and some time with Roby also there's there's an understanding of that there's also an acceptance of it which is also why there's no surprise at their first view to play company in the world future play pop-up here in

Helsinki and would you know what there's some extra Bo Dukes in there as well but that is really becoming one of the things that can have a really strong positive impact on your monetization increase your lifetime value and thus allowing you to spend higher CPI's you can get bigger volumes and you get into a positive feedback loop and sometimes there can be a fairly small difference right paying a CPI of $1 or paying a CPI of 1 dollar 20 that doesn't necessarily mean that you get 20% for users that can mean that you get 500% more user there isn't really a linear relationship between CPI in volume in many cases so even small incremental improvements in lifetime value can have a really big impact today as well the video monetization market is really starting to mature fillrate really isn't an issue anymore you there's certain countries where field rate is always going to be an issue and no one can really solve that those countries just their economies

have to grow there have to be more money being spent online there has to be more users with high-end devices so they become more attractive to brand advertisers so we're talking about a lot of countries in particularly asia-pacific but also to some extent in Eastern Europe but you can kind of map that out right if you take gross domestic product per capita and then you take that like it's almost like a one-to-one correlation between how much people spend in games and sort of the value of that market so value and field rate isn't really an issue anymore I also think that mediation is becoming more and more a thing of the past because it really isn't needed it doesn't really provide that much value to the unique developer and I'm ultimately coming from the developer side right I spend in my gaming career I spent roughly half the time or let's say two-thirds of the time I spent with gaming companies in the role as CMO as head of marketing the person responsible for user monetization the person responsible for us acquisition so I'd done a lot of this from the other side

and now from the past time I've been here without colony so we can see how things develop in that sense there are really really high adoption rates now among users there's a whole undefined as of yet undefined but there's sort of a whole audience of users who virtually exclusively monetize through watching ads and these players now as well they have to a large extent come to expect that there should be ads for them in the game it's become part of their gameplay experience so sometimes not having ads inside your game can end up hurting you it's it's been a really interesting year I think for casual puzzle games I like casual puzzle games I like them quite a lot I spending quite a lot in the past twelve months there have been some really really good ones released super polished high profile big Studios big production budgets a year two years in development super polished but some of

them launched without video monetization many or actually all of the games that launched without video monetization isn't really around anymore I would say the most notable one is a game called a little lost did anyone play a little lost has anyone heard of a little lost a few people well okay the economy people have heard about it you don't count good game Studios right based in Germany 2000 employees more money than God like printing money from their core games doing incredibly well wanna probably the fastest growing game developer in all of Europe like they've drawn with like a thousand people in 2 3 years gone huge and they decided to try and go for the cashier market they developed a really really nice game called a little lost kind of candy crush she meets Best Fiend C type of thing right there's very little radical innovation happening in this space but there's a lot of really good incremental innovation that is happening but it seems that this is just not enough like

these games aren't monetizing high profile games from high profile developers or getting killed and it's gonna be really interesting to see to me best fiends was kind of the last game that really managed to establish itself in the casual market it looks like maybe toy blasts from peak games it's on really good traction right now so maybe they will be able to do so as well the final thing and Jamie from future play he always talks about this and we all talk about this I've heard it for 10 years so I'm really sick of hearing it but now I'm getting paid to say it so I have to say it but it is also the truth right brand dollars or you can replace that with TV dollars or coming I was told you through 2009 they're gonna come in 2010 and in 2010 I was told they're coming in 2011 and now I'm with that colony so since 2014 I've said they're coming in 2015 this year I'm saying they're coming next year right they will come it's just a matter of when and where but this will have a really big impact on the overall app economy right there's a lot of estimates global TV spend is roughly in the range of 2 to 250 billion dollars a year whereas the

economy is somewhere between 40 to 50 bottom billion dollars a year and when the point happens when 10 percent of the TV spend goes into the mobile ecosystem which will happen because there's just it's undeniable it is going to happen well then you have an influx of 20 billion dollars right the whole market grows by 50% that's never gonna happen serena purchases in-app purchases or maturing they are not drawing at the same level but generating ad revenue through capturing an audience on mobile devices it's going to be really really big I really predict that a lot of the bigger game companies are going to set up their own review to play departments start focusing on making these kinds of games because they have benefits right they have size of scale it is challenging when you start out and you want to make a view to Blake company you have to build up your audience from scratch but if you're seeing if you're King if you're one of these companies with a massive audience it just makes a lot of sense to start dabbling with this

metrics are becoming more important it was a really interesting talk by scientific revenues a lot of it was touched on it and I'm already running late so I'm gonna try oh okay that I actually didn't want to do go back see this is the curse of how can I go back on this one this is the curse of having fancy presentations good right I almost feel bad for doing this on the first day it's just gonna blow everyone else away but that doesn't matter if it doesn't work so moving about beyond eCPM right you straight is something that I only have been talking about non-stop for a year and a half right now and it's really measures what percentage of your daily active users that end up watching an ad every day it's a key

metric to keep track of eCPM I talked me I mean we talked to tons of publishers right and one of the things that a lot of publishers have in common is that they just tend to focus way too much on eCPM eCPM is a really nice metric and it makes you feel good when it's 24 instead of 18 but it's ultimately useless revenue is what matters optimize for revenue eCPM is a very big part of that but there's a lot of people who say I can tell everyone I can offer anyone in this room a hundred percent 100% une inventory so you're not gonna get any traffic that we can make that deal and a lot of people tend to kind of stare blind up that they send deals and on the ad networks only send them traffic when it's actually his above so you end up screwing your revenues royally but you have an e CPM number that you can feel really good about I touched on mediation I mean mediation is - to me and necessary evil or it's an imperfect solution to a industry problem like it makes things maybe slightly better but not really the one thing I leave everyone is working with a

mediator is don't use their auto optimization algorithm if you have to work with a mediator at least make sure I mean that gives you tools to be kind of flexible in how you set things up and how to optimize things so then make use of that don't trust their algorithm to make decisions that have a direct impact on your revenue waterfall optimization falls very much into this right try new things with your waterfall optimization what works should I have two providers and just alternate every other day they get top position should I do other things like there's a lot of things that can be done there that will yield better impact than just sitting back and allowing your mediator to make your decisions for you with our auto permutation algorithm has anyone ever worked with a predictive algorithm that actually works because I have never seen one has anyone done that yes cool so you can see into the future which where did you find a working algorithm like it's Dufty okay so you want to sell your own thing

yeah okay never mind wait till you're on stage then one other part right is there are more and more tools coming to help you drive in app purchases and I said before in-app purchases are not going to double or they're not going to grow too quickly or too fast but they're still optimizations that can be done good examples I hadn't actually never thought of annuities from the previous one it's actually really interesting but doing smarter and better targeting that's definitely one of the ways of doing it looking at your audience who are watching videos what impact is that having on their gameplay start segmenting your users based on their ad integrations connections video for promotion is another tool as well where you can show a video just as a normal one within the game but instead of promoting something external that you get paid for you actually show a video to make an inner purchase like you show off the golden shotgun why make a 20-second video why should I buy this white what does it do show it in action and try to get people excited about making more of that in the interest of time I'm gonna skip this but if anyone wants to talk about more about sort of the actual

integration where and when and how to do it in the game because we have several presentations we have tons of suggestions around this as well all I can say is that integration quality matters really much it can have a big impact on a CPM it can have a really big impact on user adoption and user experience of it ultimately the goal is the rewarded videos integrated in your game should lead to a positive gameplay experience the game should be better when they're they're not worse alright switching gears talk a little bit about growth this is from my colleagues who are on the monetized who are on the user acquisition side of AD colony we run one of the biggest mobile video Network we tend to be the highest ranked sort of independent ad network whenever apps fly or tune all of these guys for lease or statuses so and we work with most people in this room I'm sure if you're doing user acquisition you have worked with us so we have an enormous network and once or twice per year we look at all of that data and we find conclusions and we love to share

these so these are some things based on the hundreds and hundreds and hundreds and hundreds of millions of AD that run through our network every month number one optimize your coming campaign creative based on which genre you're doing is these slides are gonna be available so you don't have to screenshot it or scribble for notes but we have found by analyzing creatives analyzing installing conversion rates these are some of the things that actually has an impact for the different things it's very clear with action games having live action in action games works exceptionally well it's not just us that have realized this machine some have realized this they use Kate Upton they use honest watchmaker super cell with Liam Neeson like these things actually work quite well and that is a ton of other things as well what tends to be the most interesting slide whenever we present is this one so if you just gonna photo one slide photo this one so this is the optimal video length in terms of conversion and install rates and what's really interesting to see that this year there's a clear bias towards longer and

longer videos they are performing better than they did past year we can discuss ours why this is happening one reason could be that maybe more spend is coming from the midcourt strategy game players advertisers and they really want to have longer videos because this works well for them if you if you're a player you're more your machine so you want to show off a lot of games tanks trucks explosions like so you want to have a longer time period of time so that could be it localization of your video ad also actually has really big impacts I would say out of all these of course Korea Japan and Russia or three actually watch great markets markets that are hard to penetrate as a Western developer there's a whole track dedicated to that so go scoop up some info from there but localizing the video which is a fairly low amount of work it actually has a really big impact on install rates unless you're French

my final topic and this is this is a collection of topics or a collection of different things but there is a really clear trend that I have noticed since the beginning of the summer which I'm very very happy about again having been in this industry for about 10 years right now I mean there's a lot of out there there's a lot of there's some fraud fraud defined as independent players doing sneaky to maximize their own revenues and they're getting more and more advanced we've come across fraudsters who actually work with CPI networks they make the install then they actually deposit money they deposit $0.99 and they make a first purchase and they still arbitrage out of that because they get paid $3 CPI or whatever so then they actually go in and they fund that and most game companies are looking at you know what percentage of users are making a first purchase and all of a sudden you have a source we have a really high value of that

but there's also issues with that then ad networks there are big issues with attribution alignment or your different ad sources presenting they're the users that they are generating for you in the same way or is someone using one metric and someone is using another metric are you looking at the users you're getting even from big ad networks because I think I think one thing that's gonna happen this year in the next 12 months is that a lot of people are gonna be surprised what some even relatively big ad networks are doing which isn't specifically necessarily illegal but it's sneaky beyond sneaky that's why I use the word shenanigans one of my favorite word's so you have to be more alert about this you have to be much more diligent in your metrics in your post-install metrics you should really be doing especially if you're done running substantial campaigns you really should be looking at stuff like time stamps like comparing

the time stamp between the click and when the install actually happened and then if you have a hundred and fifty megabyte application and you see that there's a two second difference there some shits up you should go to your ad networks and now I'm talking specifically about video because that's what I know the best but you should really go and ask your net ad networks what how do you define a view because you'd be surprised at what some are net for students I say yeah as soon as the video starts showing that's a view maybe some other network and if we say no actually of you is gonna users completed what you're the thing so you have to be alert right attribution companies are not going to solve this for you because they are kind of they're not complicit but they are benefiting from it right you pay your attribution company when they can attribute an install so attribute as many installs as possible or kind of in their interest so they're not gonna do something which I'm sure they could if they wanted to to kind of clean up a lot of this mess but you can't sit around and wait for them to do it you guys have to do it and you have to do it by bringing this up with your ad network starting conversations

with them that are gonna be fun for you but not so fun for them altum Utley this is gonna have a really positive impact on the industry because what is happening right now is a lot of companies are spending money for crap and when you can filter out the crap you can find what is actually working you can spend more money there and you can get better users and you can build that up our friends at Rovio had a great interview nad exchanged a couple of weeks ago they talked a lot about this we had ad colony we talked to pretty much everyone in Europe that that spends and we're seeing more and more of these concerns being raised by the publishers by the advertisers which is a really good thing and the one thing I'd like to leave you with right now is like more light a fire under the ad networks asses ask them the hard questions don't just sit back and rely on the numbers become more advanced in your attribution requirements become much more advanced in your post install metrics and work on that and that is my presentation thank you

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