Intro to Mobile Advertising

Iain Hunter, Tsumanga Studios, @hunt3riAugust 2013

Part 1Background

Part 2:Generating Revenue through ad placement in our games.

Part 3:Using mobile ad placement for inbound marketing

Intro to Mobile Advertising

Nobody Knows AnythingWilliam Goldman

● Mobile Gaming has only taken off in the last 2-3 years

● A variety of competing business models, none necessarily better than any other

● A lot of conflicting information, and opinion.

● Mobile Gaming is still pioneer country

● In the last 12 months tablets are emerging as the dominant form factor for game playing.

Premium - Paid Games

Selling games the “old fashioned” way

Freemium, the new(ish) challenger

It is proven beyond all doubt that a well designed freemium game can generate INSANE amounts of cash

The Rub

Freemium game design is HARD!

You can’t simply tack on freemium monetization after the fact. You need to build the game for freemium monetization from the ground up, complete with appropriate gating and enticing IAP.

King and Supercell employ full time data

scientists to tune their games.

Ads are Eveeeeeeel

Users hate ads

Surprising thing is...

Given the choice between paying 69p for a version of the game with no ads, or a free version with ads - what do users choose?

Not that surprising

Less than 1% of revenue typically came from Paid, ad-free versions of Free apps, on Android

source Betable Blog, Aug 2012

Users (on Android) hate paying for stuff more

Square that circle

So we think we know that users hate ads, however:

● 87% of Facebook users and 61% of smartphone users prefer free apps than apps they would pay for.

● Acknowledging that app developers need to make money, pay opposed smartphone owners:

○ 88% preferred ads to IAP

● Ad supported doesn’t need to mean banner badgering while playing a game or checking out an app

○ 60% smartphone owners preferred immersive & interactive ads such as offers for virtual rewards or an interactive video after completing a level

Source, Harris Interactive, Aug 2012 - 2236 respondents

Summary

● Users hate ads

● Users hate paying for stuff more

● Users don’t mind ads (as much) if they are well integrated and offer them rewards

● A well designed freemium or paid game will earn vastly more than ads alone

● Freemium game design is hard

● King only announced this month they were removing ads from Candy Crush.

Part 2

Generating revenue from ad placement

Glossary of Terms● CPM - Cost Per Mille - The price paid by an advertiser for a site displaying

their ad 1000 times○ eCPM - effective Cost Per Mille

■ (Total Earnings / Impressions) * 1000

● FillRate - The percentage of ad requests that are filled with ads (that is, where an ad is displayed to the end user)

● Incentive Based Ads - User watches an ad or installs an app in return for a virtual reward, ie Tapjoy, Chartboost○ Offer Wall - Customer invited to watch an ad in exchange for gift

Push advertising - ave earning

● Impossible to get accurate figures, typical earnings around $1 eCPM

○ AdMob – $1.00 eCPM, almost unlimited inventory

○ InMobi – $1.00 eCPM, large inventory (especially international)

○ Millennial Media – $1.25 eCPM, large inventory (mostly US)

○ Madvertise – $6.00 eCPM, small inventory

○ Leadbolt – $3.5 eCPM, moderate inventory

○ revmob – $6.50 eCPM, small inventory, interstitial ads only

○ Mobfox – $6.00 eCPM, very small inventory

● Developers code their apps to pull from several ad networks, best eCPM backwards

Source Betable Aug 2012

Targeted Ads - Chartboost / RevMob

● Chartboost and Revmob offer much better targeted ads than the likes of AdMob, so theoretically better CPMs are returned

● Offer walls - integrate with game, create high eCPMs

● This is currently the big growth sector in advertising

● Developers report circa $5-20 eCPM, but evidence of far-higher eCPMs on some games.

Case Studies

Kiloo

● 100-250K DAU over several games

● Ad Channels

○ Chartboost $5-40 eCPM

○ Adcolony $5-10 eCPM

● Gross $500-$3000 PER DAY!

Wanaka Mobile

● DAU Unknown

● Ad Chanels

○ Revmob $18-$125eCPM

● Gross Unknow

● They describe affiliate marketing as revolutionising their business

Conclusions

● Foolish to dismiss mobile advertising as just banner ads

● Mobile advertising has potential to add 20% or more to bottom line

● CPA networks like Tapjoy are particularly tempting since we know kids don’t like to pay

but want free stuff in game.

Part 3

Using mobile ad placement for inbound marketing

Glossary of Terms

● App Discovery - How users get to hear about your app

● CAC - Cost to Acquire Customer

● cLTV - Customer Life Time Value

● Cross Promotion - Using adnetworks to promote your other apps

● PPI - Profit per Install

Breaking the charts

Distimo reported June 2013 on downloads required to break the

US Apple Store charts:

To break the Top 50:

● Free - 23,000 per day

● Paid - 950 per day

To break the Top 10:

● Free - 72,000 per day

● Paid - 4000 per day

App Discovery - Geared for Free Apps● In 2011 Apple banned TapJoy from incentivising downloads, as they felt charts

were being gamed

● TapJoy immediately moved to the web, where Apple can’t control them

● Discovery networks have been known to shift HUGE download numbers

● Not necessarily real users, people download for reward

● App discovery networks like FreeMyApps reward users in return for downloads.

● If you get it right can drive large numbers of users, game type needs to be right, if you drive hardcore gamers to “dress the doll” app, you’re going to get 1 star

reviews.

Marketing Premium AppsFrom a mobile marketing pov Premium apps have 2 disadvantages:

1. It is extremely hard to convert a customer in an ad with a premium app. Clicking on

an ad is an impulse thing, having to pay is a massive barrier.

2. In freemium CAC is spread over the lifetime of that customer, so they may download and eventually become a whale, however in premium you need them to pay at the door. So you may be paying out more in advertising than you’re bring in.

That said paid games like Civilisation are advertising on mobile, unknow how successful these campaigns are

Conclusions

● For Freemium content mobile advertising can drive definitely drive downloads

● Consensus seems to be that mobile advertising for premium content alternative strategies, and more traditional marketing will work better.

● App discovery networks feel a bit “dirty”, but can drive massive amounts of downloads.

● Cross Promotion of apps is a no-brainer

● Again a very pioneering area, which is undergoing huge change

● To be successful App Publishers requires understanding mobile advertising, and how to best utilise it to drive sales.