Interview with Nativex about key marketing trends in the mobile games market in China

Maxim Laba

Alexander Semenov, Editor-in-Chief App2Top.ru : Maxim, hi. To begin with, tell us a little about yourself, about how long you have been promoting mobile games and applications in China?

Maxim Laba, Director of Nativex in the CIS: Sasha, hello! I got into the world of mobile marketing, it seems, in 2015. Before Nativex, I managed to work in two Israeli companies and one from the USA.

And what was before marketing?

Maxim: Before him, my whole life was connected with sports. I am a former professional triathlete.

Suddenly.

Maxim: Very much so. Therefore, at one time everything was new to me here.

You just said yourself that you managed to work in marketing in the West. What do you think is the key difference between promotion in China and in the West?

Maxim: China is characterized by overregulated mobile advertising market. It is very important to clearly understand what and how you can advertise. It is necessary to be aware of all the nuances of legislation (they are constantly updated).

Because of this, the path to success in China is a little more complicated than, say, in the States.

How jaded is the advertising services market in the country?

Maxim: China is a very tasty morsel. There cannot but be a struggle for customers.

6-7 years ago, mobile advertising in China was inexpensive. What is the current situation with prices for mobile gamers relative to other regions of the world?

Maxim: It all depends on the category of games.

If we take midcore and hardcore titles, then:

• in China, the cost of a paying player is higher than in the States;
• “whales” in China bring significantly more than in any other region;
• ARPU per paying user in China is also on average higher than in the USA and Japan;
• Chinese giants and a small number of Western projects are mainly fighting for these users, since the monetization of such games is based on making payments, and this requires a license (ISBN);
• by the way, the number of projects developed in the CIS, but having an ISBN, can be counted on the fingers. There are very few of them.

If we talk about projects whose monetization is based on advertising, then:

• the cost of a user (on average in the market) differs little from that in the USA (sometimes it happens that it is a little more expensive in the States, sometimes it happens that it is a little cheaper there);
• if you need some clear guidelines, then you can look at the CPI in the States and add 10% to this indicator. This is how you can get a forecast CPI in China. But this is very conditional, solely for guidance. Most likely, when choosing the right platforms and placements, the CPI may be slightly higher, but at the same time the ROI will be higher than in the States (even taking into account that there are no purchases).

Interesting! What genres of project traffic would you call the most expensive in China?

Maxim: I think it’s for SLG projects.

CPI for these games cannot be shown to UA teams of hyper-casual games, they can grab the heart.

Oh yeah. The cost of attracting a midcore/hardcore user can reach crazy values. And for how much in China is it really possible to get high-quality traffic for a hyper-casual game, what figure can you focus on plus or minus?

Maxim: It’s hard to say the exact numbers. It all depends on the creatives, the presence of brand activity and other factors.

But still?

I would go from $0.5 and above.

By the way, in light of the recent order banning children from playing more than three hours a week, have you seen an increase in the cost of traffic?

Maxim: This is a very relevant question. I would like to focus on it in more detail now.

Is everything really not as the media wrote?

The news spread very quickly.

Now the country is strengthening control over minors, over their gaming profiles. This is true. But there are nuances that are important to keep in mind.

Let’s go back a year and a half ago, let’s remember the first law aimed at combating children’s addiction to video games. According to him, the in-game spending of children was limited to a certain amount. In addition, in order to register for certain games, it became necessary to verify your identity (for example, with a passport).

This concerned, first of all, just midcore and hardcore games (including mobile RPGs, large-scale MMOs and strategies). Everyone who was supposed to be affected by the law was informed in advance. Moreover, they have previously made the appropriate changes in the games.

Now we return to our days. The new resolution concerns exclusively the same niches.

I admit that all children who can no longer play their favorite midcore/hardcore games for more than three hours a week are not currently engaged in reading or sports, but rather spend time playing hyper-casual hits from the CIS.

Now, as for your question about the cost of traffic. Today we don’t see any changes. And this is logical: children and teenagers are not the main paying audience in any of the genre segments.

Thank you for the comprehensive answer. Then the next question is: what influences? What observations regarding the mobile game advertising market in China could you share?

Maxim: For the last six months, we have all been trying to learn how to live without IDFA anew in the era of iOS 14.5. But I’m not ready to say yet how this affected traffic prices in the Chinese App Store. I think in six months I will have enough data for full-fledged conclusions.

IDFA is always a story about collecting user data. Does China have any laws regulating the collection and processing of data about residents of the country? And how should these laws, if any, be taken into account when working with data about Chinese users?

Maxim: On November 1, 2021, the “Law on the Protection of Personal Information” will be officially applied in China to protect personal privacy and security.

The new iOS corresponds to it.

As for Android, in China, all smartphone manufacturers are recommended to install OAID (Open Anonymous Device Identifier), developed by the Mobile Security Association of China (MSA). This is an analogue of IDFA.

Not everyone can read data from OAID. If you want to enter the Chinese market, the developer must integrate OAID, and then find a partner for promotion.

Okay, let’s go back to the advertising trends that affect the price of users. Which ones would you note?

Maxim: Of the marketing trends that really affect the cost of traffic, I would mention KOL. This direction has always been strong in China, but over the past 6-9 months I have seen a significant increase in budgets here.

What do you associate this with?

Maxim: All mobile companies are result-oriented, so they are wary of branding stories. However, more and more often there are situations when KOL in combination with classical performance advertising gives excellent results, both in terms of increasing the flow of organic matter and a qualitative shift in metrics: CPI falls, and with it the cost of attracting a paying user decreases.

Just imagine what kind of audience an influencer with 200 million subscribers has!

The influence of this trend is also understood by advertising platforms. Over the past six months, they have made a number of technical innovations that help KOL campaigns get more and more coverage. Plus, a number of tools have been added that makes branding campaigns more result-oriented.

The last question is no longer about advertising, but about entering the market with the game. There are a lot of Android stores in China. Give me some advice, which ones are the best to go to with games?

Maxim: It depends on whether you have an ISBN or not.

If the game has an ISBN, then you need to be represented in the maximum number of stores. 80% of users are concentrated in the top 10: Tencent, Huawei, 360, Oppo, Vivo, Mi, Baidu mobile assistant, Sogou, China Market App and Wandoujia.

If the game is monetized exclusively by advertising, then an ISBN is not needed, but there is a problem: almost all Android stores take 50% of advertising revenue. There are few exceptions. There are those who charge less. But only two stores don’t take anything. This is TapTap and 好游快 ( (it doesn’t seem to have an English translation, we call it Good Game Trip).

Of course, no one wants to give away 50% of the revenue, so it’s absolutely normal for such games to purchase traffic for APK files. This is done not only by foreign, but also by Chinese companies. The most important thing: for users in China, this is in the order of things.

Another important point that many do not know is that in the case of non—gaming applications, Android stores do not force developers to use the store’s payment channels, they do not see the need to take a share from non-gaming applications. In this regard, such verticals as Health&Fitness, Education, Utilities, LifeStyle look attractive.

I see. Thanks for the interview!

Maxim: Thank you for the questions. Yes, you can always contact Nativex using the form here: https://uri6.com/tkio/BjENJza