Mobile advertisers are going in blind on Apple | Fernando Pernica from Nefta

[Music] we are now joined by Fernando perika from nefta how you doing today very well thank you James how are you very well we've done day two we've had the party last night did you go to any of the parties around the town or we tried we was very very busy uh we did find some some bosss near the event um and we had after bever to celebrate the first day GDC is all about there being no space anywhere EXA exactly surprised you found anything I know I have talked to nefta in the past not yourself specifically but if people haven't heard of the company just give them the little rundown what do you do of course yeah so we are essentially a fully-fledged ad Network and what differentiations from other partners out there is that we are leveraging first part of publisher data in order to serve more relevant ads for players um so we know that of course the industry has seen a huge shifts towards privacy uh that means signal R for advertisers um which you know led to wiing costs for developers and of course you know a certain loss of

on building the right game for the right audiences we are trying to bridge that Gap by um helping advertisers find the right audiences again and once they find the right audiences we believe that they will then be willing to invest more in a network and invest more in those users and that means that Publishers can then uh generate more ad Revenue um when they're monetizing the us as well how tough is it to do more with less data because obviously all those lockdowns are tricky and you know with Apple closing its doors a little bit and it does mean that you have much less access to this stuff so how do you maximize what you do have access to uh a great question I think the right answer would be we're not actually doing um more with less data we're we're doing more with different data so so far the the industry has really focused on using Advertiser Focus IDs you know Gathering uh data from across the web um that shows a profile of this user across you know many sites of course that's not possible in the more mobile because ICL

down then Google will follow suit um what we're doing is actually looking at publisher data you know how can Behavior within a game actually inform advertising and and better advertising auctions so that's what we're looking at and it's actually we're looking at a lot more data points than before because we want to understand how player behave how a player behaves within the game and how the behavior can then lead to conversion for for our our our of speaking of player Behavior like we've got a Unity report they just released their 2024 one saying the retention rates and the IAP purchases are down but app revenue is up nearly 27% so it seems to be that money is being made but there are these negative metrics that have kicked in for the first time really in history of the industry the last two years has not not been super great um how does that impact what you folks do um great question I think the um what we're seeing really it's a bit of the effect of the the the the trends of the last two years so um developers

have spent a lot of time um you know building games without a lot of information on on on what kind of they can acquire right that has a massive impact um it couldn't be that they are buying low quality users now because they don't have access to high quality users and you know perhaps they're going on a shopping spree and acquiring uses for lower cost that means that you know they retain at a lower level but at the same time because they are being so aggressive on acquisition on you know on on sort of um uh one siiz fit potentially um they are able then to generate more Revenue but it's a longterm is going to be a very hard strategy to follow because um well they won't be able to optimize those us the long term and and in order to build a game that people will come and play over and over again as becoming harder and harder and that's why they're resorting to potentially an approach where they need to reach more users uh and of course that has a lot of implications for costs as well so yes Revenue might be up but we hav't actually look at the cost numbers for for developers and they'll go as side the cost numbers you mentioned that we've been looking at the

liftoff reports that that they've put out and they say that the CPI for video ads on Android is about 80 cents uh whereas the CPI over on Apple is over $5 so there is a shocking difference in trying to you know get that install on the different platforms is it a case of a is it now very expensive just to get anybody on board on Apple at all on the iOS platform or is it a case of what you're talking about there with the quality of the user and the potential Revenue you can get for them is it a is there a higher quality user over there order so I would say that Avatar are going in blind uh with with been in their acquisition campaigns um and that of course that's a price to pay right you're trying different strategies you try different uses you're not really getting the return on investment but everyone is doing the same and they has a huge cost for the industry um now if advertisers had a way to find out who their best users are in the publisher the publisher sites and perhaps they can do better make make better decisions on the on on on their campaigns but right

now they don't have it you know as as I mentioned it's a bit of a you know um a machine gun approach where they're just trying everything that they can and um and I was always historically more expensive but now it's and we're going to Historic levels of of of of those cpis and and that is very uh challenging it's going to be even more challenging for the history right so yes the revenue is going up um but retention is down and Publishers have to spend more money on iOS virtue well we can't not talk about AI cuz everyone's been talking about it for the past year as I say to everybody in this situation you're a company that's been using machine learning I'm sure for many many years but the generative AI is affecting people's workflows these days and the word I keep hearing is inevitable in terms of being introduced to the cycle what do you feel are the benefit strengths of it are you kind of pro this sort of thing or what do you feel well whether I am Pro or not I think uh it's it's irrelevant um I think it's know how can we best leverage this technology for our business for example

um we I don't think we're there yet you know we're still relying on maybe old school AI where we know how how to use machine learning models but it could be very interesting in the future and very relevant for the way we work because of course we're we're dealing in vast amount of publish data they sending us events that would inform us about how players behave within the game and if we can perhaps teach the AI to essentially create new models based on that and itself then performance improvements will be much greater than they are now you know for our iers and for Publishers as well so I think generative AI in in the sense of is generating new ways to look at the data this could be very exciting for us now on an industry and and and and perhaps even a personal level you know um I think we're um in a very exciting Point um 2024 I think it's going to be a consumer um uh it very consumer driven uh you know right now we we've seen how professionals can use uh gen to to help their their work but more companies that putting this in the hands

of people we have you know Microsoft very much you know pushing their apps you know you know they got high ratings on on on Google Play for example that means that people love it people are using it uh my phone comes with you know generative AI tools already that I've already used a a few times so consumers are getting their hands on it and now we're finally going to start to see what this means for the world now so far it's been only people that understand technology the technology that are actually using it but you know tomorrow is going to be my mom using the stuff you know and what does that mean for for us you know what the opportunities and the challenges that are going to arise from that as well what about other trends that affect your industry specifically AI is taken up a lot of oxygen and people get excited about it because it's a very broad conversation now within your specific space is there anything that's popped up over the last couple of years that's really change the way that you do business or something that you see on the horizon that's going to affect the way that you work yeah I think the most telling change really has been on how game developers are using it you know there's not something specific to advertising

uh but it's very exciting to see how so many St studos are embracing it and some and and the most exciting aspect I think is um those in students that are actually uh trying to be AI first I'm very you know I haven't really seen you know a breakout Studio there's a couple of really uh interesting um players out there that I'm following but uh I'm really looking forward to see you know a game that has been developed entirely not by AI but entirely helped by AI you know reach to the top 10 you know on Apple and Google I think that' be a really exciting time um on the advertis of things and know what I mentioned to you before being able to make better predictions and be able to learn from the the the previous you know campaigns and the previous uh you know um Publishers that we've had I think that would be a really a really huge breakout for us to be able to achieve that and this what we're working towards to to create a system that feeds itself and tees itself to improve campaign performance to improve publisher cpms as well well you set up your boo here at the event and if you can talk talking to people face to face from your perspective what's the what's the difference in doing these kind of

interactions at a show versus you know zoo or Skype or a phone call why do you come to these kind of things yeah um the difference is water and wine you know we can achieve so much more even if it's just a handshake or a you know touch and base with with people here that you know that you have been talking to perhaps for many months just having that you know be able to look in the eye being able to sort of exchange us to Pleasant trees and perhaps you know share a drink or share a coffee I think that really cements something uh in the relationship and helps to move things forward you know and sometimes when you're having a call over zoom and uh you know we might have all the time in the world but just getting the right moment to say the right things can really be a a balancing act here in person you can diffuse a situation you can build on something you can face yourself much much better I think uh that really helps us accelerate um you know our our progress uh which is you know why we're coming to this event now we with a few and very happy to be in the debut of you know PR here in San Francisco so um it's uh it's it's really

really exciting to support the industry um uh in moving this forward and keeping this this alive well very glad to have you here and thank you for talking to us today pleasure thank you [Music]