At GameDev Days 2016, which was held by Creative Mobile, we discussed with Eric Seufert, vice president for acquisition and user engagement at Rovio, how much it actually costs to acquire users, how to properly apply cross-promotion and what are the pros and cons of video advertising.
The acquisition of users is now very expensive. Has the price ceiling in this area changed in an annual comparison?
Here you can’t just take some abstract average cost, as companies like Fiksu do, because such figures will give the wrong overall picture.
If we consider the cost of advertising, then in this area there is a tendency to estimate the cost by the number of clicks. There is such a thing as clickability (CTR), and there is also the cost of media. And that’s just the cost of media, in my opinion, does not change much in annual comparison. As is the cost per thousand impressions (CPM). The exception is new formats such as playable ads and videos, which are all much more expensive. But if the cost of media does not change, and the price for the installation is still growing, then this means that people have simply become less active in responding to advertising. Smartphone users are not eager to download new apps. Yes, they have certain needs, but they are already satisfied. There is no such thing that users open the App Store early in the morning and just rummage through it in search of something new and interesting. This is partly why they have become less responsive to advertising: they don’t need anything. Therefore, the only way to attract a user to your game is to distract him from someone else’s game. So if you are creating a project that the user will find particularly high-quality, or interesting, or something like that…
Or is it made based on your favorite license?
Yes, exactly, based on your favorite license. By franchise. In this case, it is much easier to get the user to click on the ad. When we launched Angry Birds 2, we had a CPI of $1. In the USA. Immediately after the launch. That’s because we have no problems getting users to click on this ad. In parallel, we launched an experimental IP. The project was unoriginal and did not find a response from the audience. And the launch turned out to be very expensive.
What is the most effective advertising?
Well, it depends on how you evaluate your portfolio, how you evaluate the created IP. Because if you stupidly upload an application to the App Store, you will have to lure users from other applications, “steal” them from other people’s projects. And how to do it? So this is a strategic issue. What kind of game are you developing, does your project imply long-term investments, which vertical do you want to integrate into – that’s what you need to answer yourself.
After the success of Flappy Bird, Ketchapp studio appeared on the market, which came up with, as it seems to me, a very interesting business model. Every two weeks, the studio releases a new game, simple but addictive, and simply transfers traffic from one project to another. This business model is still working in the case of Ketchupp. But can other companies apply it, do you think?
Yes, of course. That’s part of what I’m doing in Rovio. In the field of user acquisition and cross-promotion, we have achieved a lot this year. We have created ads for cross-promotion, and in general we have made cross-promotion in games more interesting for the user. We didn’t just run ads, but put game content there. And it turned out that… You know, I talked to developers at GDC, told them about cross-promotion, just what we have achieved in this area. And it seems to me that every time I talked about how to use cross-promotion as part of a general promotion strategy, they thought: “Oh, come on, the maximum how many DAU will be able to attract into a new game from the old one is 1%. Well, or 2-3%.” That’s not how it turned out at Rovio. We made a native cross-promotion, made advertising not just advertising, and the game benefited greatly from this.
What do you mean?
I mean, you can’t just run ads, that’s all. We need to think about how to combine the two games so that both projects complement each other’s gaming experience. We have such a game, Nibblers, and there is Angry Birds Pop!, which shows itself very decently. And so we took Nibblers…
Yes, I know such a game.
I mean, when we launch the game, we want to end up with such a mini-portfolio within the framework of the main portfolio of Rovio. That is, to create a close connection between the two games and people eventually played both. And we did it in the case of Nibblers: 25% of the user base of this game came from Angry Birds Pop!
But why not just use the Angry Birds franchise? After all, the new game, Nibblers, is not in the Angry Birds universe. Why is that?
Well, we tried to go beyond the usual framework. Because if you rely on the same franchise all the time, you won’t create a new one. Plus, these two games are very similar to each other in terms of gameplay, so it was quite logical to advertise one project with the help of another, even though it is not in the Angry Birds franchise. You have to invest in a new IP.
And what to do with cannibalization? After all, these two games are very similar – the same mechanics, the same audience.
That’s what a strategy for acquiring users is for. Nibblers were better monetized. And that’s why we bought users for Pop! cheap, because it’s Angry Birds, and then redirected them to Nibblers, because they brought more money there.
The last question is about video advertising. I know one case when the guys added rewarded video ads to the game, and users stopped making IAPs. So, is video advertising really cool, or is it just such a fashion?
In general, I usually faced completely opposite situations. As soon as you add a rewarded video, users start spending more. The fact is that most people have never bought anything in games. They need to be convinced. That’s how they don’t mind spending. But first they want to get something like a probe. You show them what they can buy, and then they will be more willing to make an IAP in the future. You show them – this is what you will get for your money. We give it to you for free – but only this time. And then you have to pay. And they’re like, “Yes, a very valuable thing! It’s worth spending money on.” And next time they will do so – they will spend. But here you need to be consistent. You can’t just take and stupidly stuff video ads into the game. I once played such a… card buttler. And they give you a limited number of cards before the fight, but you know that if they suddenly run out, you can watch the video and get an additional card. And I’ve never paid at all! Because I knew I could always watch another video.
I see. Thank you for your time!
The editors of App2Top thank Creative Mobile for their help in organizing the interview.