Seizing the First Party Data Opportunity in Mobile Games Advertising, Fernando Pernica, Nefta.

[Music] [Applause] [Music] we're moving on to our next exciting talk uh and in that one we're seizing the first party data opportunity in mobile games advertising um I'd like to invite to the stage Fernando perika from nefta so first party data this tantalizing three words that we hear a lot about um and has been in the language of our industry for many many years and I remember even um back in 2015 when I was still a Plucky publish

growth manager in my second job in NCH we already talked about first party data and how we could use it to optimize advertising campaigns to improve advertising results except back then we were looking into you know how we can collect as much information about the user as possible gather up all of this fold it under under an advertising ID and then optimize those campaigns for return on out spend a very different reality than what we can do today and I remember even back then we were doing um you know receiv with this data in spreadsheets and I actually don't really think the the the system actually work very well um so I think we've come a very long way from uh from those days but I am here to tell you and to suggest to you that uh we still think the first B data is the solution to drive better growth for game developers even today even after all the changes that we've seen happen in in in the last few years and yes my name is Fernando pernica I'm one of the co-founders and

also the chief customer officer at nefta and we are an advertising Network that's looking to seize the opportunity uh for mobile games in first party data by working with both advertisers and Publishers in try to uncover and harness that that data from for them so I don't have to stand in here and tell you about the reality so it seems like I'm locked out of the thing but I'll try this Le thing no do you know does the AV team knows how to move forward with the slides no there we go perfect great so Publishers the game developers having feeling the impact that you know ATT gdpr L and God knows how many more acronyms you know there are there that I couldn't possibly memorize we are seeing we're feeling the impact of all these privacy changes and we can say safely that we are now in the Privacy first era those changes will not stop but they'll

continue to move forward and they'll be more and more aggressive you know Google will follow suit very soon is already doing it and know we've seen you know in some of the some cases with some of our partners uh we see as much as 70% opt out rates so that means that advertisers don't have information on 70% of the users that they are targeting they have no information no idea who the user is and conversely then we have Publishers as well who are seeing the advertising revenues Decline and cpms drop by as much as 50% % sometimes even more depending on the on the on the the location depending on the placement and so on but the number that really stuck with me when I was doing our research and this is something that we've been looking to for a few years now is 35% I think it was from a report from up flyer two years ago or a year ago that said that you know in the the year after um at was rolled out that you know in not purchase across the entire industry went down by 35% in not purchase no add revenue and not row Us in not purchases

this shows how much the industry was shifted and it's not that the industry became smaller because it didn't if you look at the micro reports the industry grew so where did that money go well the money went into a fundamental rearrangement of our industry we go again oh there you go it's this one um what happened was that some very clever companies managed to see the opportunity within that and Consolidated a lot of the data they they started to verticalized a lot of the oh that one okay thank you we'll get there people um he started they found very clever ways to um to address this need the need to drive growth for for Publishers and for advertisers and the way they went about this is to essentially consolidate data so they started you know putting together a a game studio with an N Network with a mediation platform with

have a DSP with an SP and so on so forth and creating this massive stack that essentially created this massive Silo within um the industry with for them where they could observe and see everything that came in and they came out they could fundamentally see the value that a user had within a game and as well as outside a game so the the marketplace value of the particular user a very clever way of doing it naturally because they had access to all this data they they they they they were they found a way to optimize it to their own benefit generating you know profits of maybe 60% you know I've been hearing that's the number that's been going around because been completely optimized for their own gain for their own benefits and this algorithms World Gardens some people call it of course it's in many ways the the only options that Publishers now nowadays have to monetize and advertisers have to um also to find to to acquire their uses there's

fewer and fewer choices today but it's not all doom and gloom it's not all doom and gloom um otherwise I wouldn't be here talking about opportunities within first party data we're talking about here it's uh temperamental apologies uh the big big green arrow on there yeah okay great uh we will get it there I promise um what this what what this what this companies actually did was actually to show us the way so they were very clever in doing what they did verticalized their operations bring everything in house you know acquire consolidate expand but it what this point what this did was to point the solution towards one thing first part of data because if you own your data then you're virtually future proof Apple cannot take that away from you Google cannot take that away from you not even the U can take that away from you it's it's basically the

extent that we've done our research if you if you if you if you deal with your own first party data you are virtually future proof also you're compliant because you can find ways to be compliant with all the regulations and with all the stores uh uh policies as well but for me the most exciting one is is untapped even though we talked a lot about how to use first body data in advertising we haven't really done a lot with it we acessed and we just decided okay well the old way are best let's just focus on Gathering Advertiser data and and put it together and hope that everything's going to be fine it has been fine for some but I guess not for most of the industry and people in this room here if you're a publisher you will know how things have really changed dramatically for you so before we dive into how we can actually use first party data for um you know better results in in a in Mobile advertising let's talk about a little bit about the results so right now what

we don't have is the ability to serve relevant ad advertising and therefore generate better results for Publishers if we we're here to propose that if we're using first spoted datas from a game for example we are able then to generate relevant advertising again and therefore generate higher CPM for Publishers so from serving more relevant ads to generate better return ad spend for advertises we can then of course generate higher uh ecpm Publishers that means more Revenue but going a little bit further even not just generating more revenues we can generate insights about the players we can understand if we if you're aligning ourselves to Publishers and to Publishers interests and Publishers needs in order to really understand how those players behave and how their players you know generate the best possible return on investment then we can really find out how we can improve campaigns at a very deeper level

well this sounds great I want 30% more Revenue I want know better um return return or not spend I want all of these things so how the how do I how to I get started well the first way of course is for you to work with one of the big world Gardens right you you you take the keys off and throw it to them and and forget about it right you have absolutely zero control what's happening but you're making a buck or two extra there and you know I think you know if you if you've been around for some time as well I remember when we were talking about head the bidding for mobile and how it's going to be you know the publisher Savior and it's going to bring accuracy it's going to bring transparency it was you know born again you know uh Salvation for for Publishers and unfortunately you can see today and say safely that it Publishers are even more in the dark than ever they have no idea what prices they're getting from for for for what for what campaigns or from what advertisers they're completely nutly in the dark

but what is the alternative well the alternative would then to be to build this yourself of course and if you don't have two billion or three billion dollars lying around might be a a little bit hard but some Publishers have successfully built these platforms themselves they have been able to harness their own first parted data in order to generate better results one thing they have in common is that they tend to have billions and billions of users because they need a lot of scale in order to make something like that work well when we're thinking about this problem and we're looking into okay what do we need then in order to build this if we're going to build it ourselves what what challenges what what problems we need to solve well first of all the first problem we have to do is to look into scalability if you you know going from looking at you know your first part of data within your game and how your player Behavior behaves and what your what is the value of your player within the context of the game and try to understand that within a Marketplace you need to of course make that information

available to the marketplace so advertisers can be they can and compete for the for the value for the true value of your user in order to do that you have to build an infrastructure you have to build you know an a bidder manage servers hire people to do this and that's extremely costly extremely timec consuming to do that you also have to take in consideration the fact that machine learning you know how you're going to ELD better performance um for your campaigns thrives on on scale on massive volumes and if you have you know 2 million dos 3 million DS that might actually be a reality for you or maybe even 300 million might not be a reality for you you need to scale in order to make something like this thrive in order to really be able to use a first part data in the right way and the best way possible and not to mention the cost the cost uh the the return of investment you really need a lot of volume in order to to really be able to get your money back but perhaps the the most important aspect of it all is uh the complexity

involved in building all the stuff each game each publisher is different from the other and we what we're talking about here is that okay we have to have scale but in order to have scale unless I'm a massive publisher or I'm a big attech conglomerate and I can force people to use my product well unless I'm one of those then how am I going to be able to create scale well you need a Common Language but each publisher and each developer has a different game each game is different each user even is different but how can we make them communicate how can we translate certain behaviors that we can then you know find patterns in in order to serve the relevant advertising and even those Publishers that have you know managed to build their own systems and there are some very successful Publishers that have done that even they have to admit that all they have done is limited to their own users they can't you know export you know the way that they work with with

other prop unless they share with the world the way that their systems work and not to mention the the the incredibly hard task I'm finding to bring advertisers and Publishers together you know literally hurting cats you know they will do whatever they want whenever they want you know game developers are not bothered by doing this and we haven't even talked about the very last very real problem which is around security and compliance anytime you are you are dealing with data and anytime there is a data shift between countries between one server to another or between one device to another even there's enormous risks for the developer and you have to lower up you have to really understand the legislation you have to stay on top of the legislation in order to really be able to be a leader in this space especially considering that your data is your advantage why would you then go through the to the whole trouble here in order to make this stuff available no wonder no one's really doing it no one's really challenging the way we are doing

things right now because it's too bloody hard so it's just easier to just give your dollars to those big companies instead of really trying something different well we then thought how can we you know if we're going to do something about this and we're going to try something different then what are the elements you know what are what are the guiding principles that we need to have as I mentioned to you we are here talking about a realignment from you know working with advertisers and prioritizing all the stuff that you know we've been given to advertisers in the past working with identifiers that serve the interests we're here aligning ourselves again with Publishers and trying to understand Publishers needs and try to understand Publishers users and Publishers games so first and foremost we have to do right by Publishers we have to make sure that their data is compliant is secure that the users have the the the Privacy that they deserve ve as well the

second tenet would be then to we need to make something of this data if Publishers are going to give us an understanding of how the players behave then we must respond in kind and we must be able to uh reveal important information that will generate returns for Publishers and of course we have to do all this without rocking the boat too much you know we can't reinvent the wheel you know we're already trying to change here the way things the way things are done around here so we need to lean on well established game mechanics we can't we don't have to be reinvented the wheel so these are the three things that we've been thinking about how can we change the situation that we're in today well we've come up with a system uh very simple Innovation um very very simple a few bits of code that a developer will then put in their game in order to send us patterns of behavior that are happening within their game so if a user is progressing within

the game and completed a level for example we can learn that if a user is spending money in a certain way we can learn about that if a user is like likes to hoard items for example we know about that if they like if they like to watch ads these are all information that can be mapped out across the game and then can be sent to us once we receive this information we're then able to cohort it and then test creatives against a particular cohort because advertisers don't really they're not really interested you know I want ex user no I want users that demonstrate a behavior that's most likely to convert within my game so it doesn't matter if it's Mary Joseph or Jesus it matters that the player demonstrates a certain Behavior this is the The crucial aspect here we have managed to create a common language that is simple to implement that that maintains play as anonymity

and at the same time stands by Publishers and the the the really cool thing is that we have made it available for everyone so we've solved the problem of scalability because we we we're building the attech part of things we've built a server we've buil an ad bidder we've solved also the complexity problem with our game tags we simplified the language now all Publishers can speak the same language by using your game tags and we can you know use that to generate the relevant sites solving thus the third problem the performance problem we can now by serving more relevant advertising without identifying the players we can now generate better returns for Publishers that are monetizing with us and give advertisers better audiences for them to acquire and all of this is already possible without very important to

remember without identifying a user because everything happens on the publisher side we cohort the players and keep their anonity but thinking about this of course gave us um open up our a brains to a whole lot of things uh a whole lot of things that we can do once we started to align ourselves with Publishers and work very closely with Publishers now we only talked about here the first the the private the first advertising how can use first- parted data to generate better results and Returns on Advertising there's also opportunity to mediate the mediators see the price before and and and try to sort of bring some transparency to what has become a very very opaque industry and last we can also look into ways that we can become even closer to Publishers give them a a stake in the future of the network of the industry so that we avoid a situation where in 10 years from now we're in the same um problem that we

have today this is what I had to share with you today um I hope it was interesting to understand a little bit more how we believe the first party data really is the the killer app for mobile advertising for the next few years if you have any any questions I have to take some now I believe we might have some time yeah we have a little bit of time so if any questions now if not thank you and we going to be booth G3 um come and speak to us thank you thank you so [Music] much

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