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by Ilya Smirnov on 12/17/20 11:05:00 am

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

I mentioned the importance of marketing many times: it is the key element of making a game successful, and the main value of a publisher to the developer. In the article I want to tell you how it works.

Of course, there are some success stories of launching a great game without spending a dime on marketing. Some indie developers even make it their very specific business model: making dozens of lookalike pixel-art games that attract thousands of organic installs for video ad monetization.

But right now a successful game release without marketing doesn’t seem likely, so all publishers and major developers include marketing into their budget planning. Even at the testing stage, it’s easier to invest $300-900 in user acquisition to see what the real users like about the game. And when you’re already sure that the investment in the game development will return, there’s no easier and more effective way to scale than using marketing tools. The mobile gaming market turns more and more competitive each year. The players, respectively, become more demanding and impatient. In this environment, marketing becomes one of the main promotion tools. It’s easy to notice if you take a closer look at the industry. The trend is, the share of non-organic installs is increasing. It’s true even for the hyper-casual games, where the non-organic installs already take up more than 50% of all installs. These topics are not usually covered in detail, so let’s try to dissect the basics: how much money is usually spent on development and test campaigns, and why post-release marketing should not be put into a box. ## Development and marketing budgets It’s easy to evaluate the complexity and importance of marketing if you look at the amount of money the successful projects spend on their products’ development and promotion. For example, let’s look at a smaller studio that has a trustworthy hyper-casual game making pipeline. Such a game can be made in 2 to 6 weeks, and the budget will be based on the number of iterations. In most cases, there’s three of them: 1. Prototype. 2. Retention fixes. 3. Video ads installation. Each iteration can cost about$1,5-3 thousand, but if the prototype fails, the studio doesn’t move to the following steps.

The traffic purchase test can start after each iteration, and cost anywhere from $300. They can get more expensive, for example, if there are a lot of visual options that need to be tested. So, to sum it all up, the development and test flights for a hyper-casual game can cost, on average, from$1,8 thousand (if the prototype failed and is discarded) to $10-12 thousand (if the game was released and has reached the scaling stage). In the second case, it may cost even more, because the development may have to continue if the developer wants to improve the metrics in several iterations. After plugging in the video ads the project scales based on buying traffic, and promotion spending may reach hundreds of thousands of dollars a month. As you may see, development and promotion costs are incomparable for a successful project. The same approach applies to the more complicated mobile game genres as well, even though the cost of development is much higher. Especially if we remember that the development of a successful mid-core or content-reliant casual game continues during the whole lifetime of a project. Development costs can be drastically different even inside a particular genre, especially for the content-reliant games. For example, Gardenscapes demands a huge amount of content: new animations, scenarios, interiors to choose from, etc. That’s why making Gardenscapes is way more expensive than making the more recognizable Candy Crush. They share the same genre, but Candy Crush is easier to produce. Both projects are loved by their audience and show great business metrics. If we want a rough estimation of how much is spent on marketing a particular casual or mid-core game, it can be done this way: look up the estimated earnings of a project using App Annie, Sensor Tower, or another service. If the estimated income is valued at hundreds of millions, there’s a high chance that the same amount is spent on marketing, or was spent on marketing at some point. Just as an example: Supercell spends more than$500 million a year on promotion.

## Scaling to the max

Our marketing department can spend anywhere from hundreds of thousands to a couple of million dollars in six months. Some new developers believe they don’t need a publisher and can take out a bank loan for marketing: well, if you look at these numbers, it’s easy to see they’re far from right. The banks rarely lend this much with reasonable interest, and acquiring new users will be based on how successful the initial marketing investment was. This approach is too much of a risk.

It should be mentioned that the ad networks open lines of credit to large publishers. A line of credit is one of the means of paying for the ads. If you choose to use it, you can pay the advertising expenses after receiving your monthly bill with no interest. Of course, this option is only available to larger companies.

Let’s go back to scaling and try to understand how it works. Suppose we have three audience segments. Here’s how we’ll work with each of them:

1. High-margin audience. This is the limited core audience of the game. It shows high ROI (return on investment) rates of more than 100%. What’s so hard about working with this audience? First, you have to find the right targeting settings that will allow you to reach it: for example, men, 35+ years old, interested in hunting, fishing, and automobiles. Second, you have to decide what’s the right price for such an audience. You should avoid overpaying for an install, and the more complicated targeting is, the higher the price. Maybe you should be less specific in targeting and choose either the age group or the interests. If you choose right, you’ll reduce the CPI and get more reach. The high-margin audience you find may be just a fraction of the core audience.

2. Low-margin audience. User acquisition shouldn’t be limited to a high-margin audience: low profit is still profit. It makes sense to acquire all the players with ROI of at least 100%. Even the non-profitable players are good for the project: they increase the project’s active audience, and each improvement in product metrics will be higher adjusted to absolute profit. For multiplayer session games, matchmaking time is crucial, and more players ensure faster matches.

How do you work with this audience? Well, the same as with high-margin. The example in section one shows one of the main principles of finding marginal audiences: going from general to specific, narrowing down the targeting until marketing campaigns begin to show ROI > 100%. It’s true for both the effective campaigns and the ones that used to be effective too. In that case, you have to narrow down the targeting inside that audience that stopped showing margin and reach the part that still can be profitable.

3. Low payback audience (ROI < 100%). This one’s easy: you have to understand that this audience won’t show positive ROI unless you improve the product metrics in the game. For example, LTV, or estimated payback period. If you double the LTV (lifetime value), you’ll be able to invest in buying an audience that used to have a ROI of 50-100%.

Increasing LTV will also mean that the players that already launch the app regularly will bring profit you didn’t even expect to get.

The players don’t disappear after the payback period. They continue to play and make purchases. So, even the traffic that seems to be low-margin can be profitable.

Let’s take a closer look.

In the first case you earn money in the present moment, in the second one — you save up your audience, scale, and form considerable leverage. I’ll explain it with numbers.

Suppose acquiring a high-margin player costs $1, and they will bring you$2. But since this audience is limited, you can only acquire 1000 users a month. So, in a year, you can earn $12 thousand, and get a limited audience of 12 thousand players. If you acquire a wider low-margin audience you can get the player count up to 120 thousand people. You will also get higher DAU (daily active users) and organic installs since your game will be more noticeable in the app store features because of the paid installs. Viral organic installs also exist: the players can recommend the game to their friends. Each paid install brings a fraction of an organic install. When you reach the desired player count, you can turn the ad campaigns off and enjoy the profit from 120 thousand players. This way, you’ll earn way more than you could if you'd worked with a small high-margin audience with a 200% ROI for a year. If you also work on the product metrics, the more players you have, the more considerable the profit increase will be. Conclusions: 1. There’s no need to put a cap on a marketing budget. In theory, it can be any amount of money the investors can provide, as long as it pays back. 2. It makes sense to let the project grow and develop, gathering a large audience, and avoid pursuing instant profits. DAU growth at one of our projects ## Why game traffic costs the way it costs Now let’s talk about particular traffic purchasing tools. We’re working with ad networks, programmatic ads, influencers, app store tools (such as Apple Search Ads), and even pre-installing the games on devices right at the factory. Today I want to focus on real-time bidding on ad network auctions. I’ve noticed that a lot of indie developers are not familiar with how it works, so it can be interesting to them in particular. Ad networks work like an auction, where advertisers compete against each other to show their ads to a particular user. You can’t just come and pay to make your ads run on smartphones. First, the network should decide which ads will be the most profitable to show. There’s plenty of different auctions: open, close, even second bid auctions where the one that offers the highest bid wins (and pays the price the previous highest bidder offered). Without going into detail, here’s how it works. Suppose two competitors want to show their ads to a user. The first one is ready to pay$1 per install (all numbers in this example are just an assumption), and their ad brings one install per 10 impressions on average. So, there’s a 10% possibility of an install after the ad is shown, and the ad network will receive an average of 10 cents per impression.

The second competitor is ready to pay $5 per install. Sounds like a bargain for all parties, right? Well, suppose only 1% of impressions of their ad lead to installs — ten times lower than the first one’s.$5 with a 1% possibility of an install is just 5 cents per impression on average.So, it will be more profitable to the network to run the $1 ads with a 10% install possibility then the$5 ads with a 1% install possibility. The first competitor will win the auction more frequently.

• Your target CPI: how much you’re willing to pay per install. This is the bid the advertiser makes for an ad, or how much they’re ready to pay for the desirable outcome. There are many ways of optimizing ad bids, and we won’t get into that now.
• The ad conversion from impressions to installs (else, the higher bid would always win).

Now let’s focus on key points to consider when optimizing conversion from an impression to an install.

The first one is the ad quality. It improves with experience, analytics, following trends, and testing. Sometimes a campaign begins with a couple of different listings competing for the same target audience to find the one with the highest conversion.

You have to make a distinction between the ads that bring in a high-margin audience and the ads that attract cheap installs from the “non-paying” countries. In other words, there’s no magic bullet to hit high conversion, but I’ll share some tips for beginners in the next section of the article.

The second one is targeting settings. No matter how good your ad is, if you show it to the wrong audience, there won’t be any payback. Don’t run a top-down 2D shooter ad to a 3D turn-based strategy fan audience.

There are many dimensions to fine-tune your targeting settings: geography, gender, age, devices, etc. If your game needs 3Gb RAM and the marketing team acquires users from some countries where they can’t even launch the game because their smartphones don’t meet the requirements — you’ll get a lot of bad reviews. So the marketing team should always be in close contact with the developers. It’s also important that the marketing team is aware of the product metrics and which platform shows higher LTV and retention (i.e. tablets or smartphones? iOS or Android?).

The CPI itself can also influence the conversion. Suppose you’re making a battler — this niche has high competition for the installs, so the bids will be higher. So if you’ll place a low bid, you won’t be able to compete for the users. It’s unreasonable to put a Rolls Royce in a Ford store.

All points considered a User Acquisition specialist begins to work. We usually start by buying anything we can. Then, based on the product specifics, the marketing specialist can start targeting specific countries. Or choose a fine-tuned targeting strategy based on product analytics. For example, if we know from experience that some countries have more paying users, we can run separate campaigns for these countries.

Income from different countries on one project

We start with a large campaign in many countries. Then, we choose the most effective countries and put them into a separate campaign. From those countries, we choose the “paying” ones and show them different localized ads, or even country-specific ones. This applies to all performance campaigns.

The main goal remains the same: acquire as many users as possible to create a large user base.

## Marketing creative

Let’s go back to making the marketing campaign assets, such as banners (static ads), videos, and Playable Ads.

It all begins with defining your target audience. An ad is always supposed to reach someone specific. You may want to reach younger users that expect dynamics, drive, and headshots. Or, maybe you want to acquire adult users that want something casual and relaxed.

To understand who likes what, experiment a lot, and gather expertise in your niche. For beginners, there’s a one size fits all advice:

Remember misleading ads? You’ve probably seen one: an ad for the game that looks nothing like the ad. Such videos often bring an irrelevant audience that’s hard to work with.

There are many ways to show “honest” gameplay too. Experiment with the recording angle, scripts, special effects. You can even add custom animation and scenes — as long as they’re all based on the real gameplay that is supposed to hook the audience.

I recommend a length of 15 to 30 seconds. Also, make a rapid frame change to the logo with the store button for a great ending. Begin the video with something eye-catching.

Product metrics can help understand what the players enjoy the most. For example, if the players frequently choose a particular character or a gaming style in your MOBA game — maybe add the character to the ads? It’s just a hypothesis, but it may become an interesting creative script. All in all, everything comes down to testing.

Create lots and lots of hypotheses. Maybe you’ve produced a video that performed well — so, what happens if you use the script for another ad with different content? Brainstorm new ideas, but also work on improving the existing ones.

So you’ve made an ad that performs just amazing. It seems like you can’t make anything better. But there’s a caveat here:

Any marketing creative burns out.

If your video shows a 1% conversion to install and you’ve received 100 thousand installs, it means that millions of people have already seen this ad. They've seen it — and they didn’t click on it. If they didn’t click the first, second, and third time they’ve seen it, the fourth time will just annoy them. Bottom line is, you need to have a steady flow of making new ads.

The burnout period can vary based on the game specifics, but from experience, I’d say that you need to launch new creatives at least once in three weeks. Else, your campaigns will slowly turn less and less effective.

The perfect scenario is having 5 to 7 creatives simultaneously to hit different target audiences.

Ad burnout doesn’t happen overnight, so it can be predicted. Check the analytics to see the time to slow down a campaign that seems to be burning our, or change the content.

Campaign reach can also influence ad burnout. If you launch a worldwide campaign, it will burn out slowly. The narrower the targeting, the smaller the ad lifespan. But it’s not a bad thing, because narrow campaigns have a higher chance of being profitable at the end of the day. There’s a reason you’ve chosen that narrow audience, right?

Looking for new marketing ideas is a never-ending journey. For inspiration, you can look up Apptica, a service that allows you to research other companies’ ads. This will help you see what the other developers do and try using their approach in your campaigns.

## Marketing analytics

Ad campaigns don’t become profitable overnight, so marketing specialists define a metric called the payback period. They expect the user acquisition cost to return before a certain day. This period is influenced heavily by the genre, team experience, and metrics such as retention. There’s a low chance it will be less than 30 days. For example, for successful mid-core projects, the average payback period is 180 days and more.

You can increase the payback period to improve ROI and buy a larger audience. But to make it you’ll need expert marketing analytics to avoid falling into a cash gap.

Imagine you have no analytics and no experience of your own, and somehow you decided that the payback period for your project is 90 days. So, for the first 90 days, you’ll invest in ad campaigns not knowing if the investment will return. If you spend $1000 a day, in three months you’ll spend$90 thousand. Or, you can spend $1000 in three months to see if it pays back. First scenario: you lose time and money, second scenario: you lose time. To avoid it, you’ll need analytics. Even roughly, you need to understand what the user does in a month if they brought you$1 in the first week.

Analytics allows you to track how the ad campaigns perform and predict the behavior of the users acquired in them to improve their performance even more. There’s a large number of different analytics tools and best practices, and it’s complicated to explore it all by oneself.

If you’re making a product you’re hoping to scale in the future, go step by step and look at payback periods of 30, 60, 90, 120, 180, and so on. Don’t plan payback in a year and a half if you haven’t tested 30 to 90 days.

For our hyper-casual games, we usually look at a 30-day payback period. We also initially choose the 30-day mark for mid-core and other genres to evaluate the project and be confident about what to do next.

We talked about how to avoid losing many with the help of analytics. But can you increase the project’s income using it? That’s where it gets even more complicated and interesting.

Let’s say you’ve spent $1000 and earned$1500. Is this a success or not? How can you be sure that you couldn’t earn \$5000 with the same thousand? That’s what I mean by increasing income with analytics. The confidence that the ad campaign performed well, showed the game to the target audience, etc. — it’s all in the marketing specialist’s field of expertise that is offered by the publisher.

All things mentioned above: how to target ads, which ads work for each audience, audiences and their segments, performance analytics, which payback period to choose, burnout period for creatives and audiences — are a part of marketing analytics. And it’s most likely too much to keep in mind for a single person or a small studio focused on game development.

## Remarketing

Another vast field to work with the players in — and not a typo in “retargeting”. Remarketing is working with churned users in a wider sense, and retargeting is working with them by showing them ads specifically.

Retargeting, as a specific part of remarketing, can be divided into two parts:

1. Returning paying users;
2. Returning non-paying users.

The first part is easy to understand: everybody wants to return paying users. These are usually lower volume campaigns with higher ROI percentages.

The second part is a bit more complicated. Many marketers believe that returning non-paying users to games with an In-App monetization model makes no sense. I think that it’s possible to work with this audience, but it demands product improvements and different tricks to make retargeting perform well in terms of ROI. These tools exist, but it’s a very narrow field with low expertise and few people sharing their methods.

## Other means of user acquisition

PR campaigns. PR can work for a product if it’s a franchise or an influential AAA project, such as Cyberpunk 2077. Definitely not something fit for an indie game.

If your game is literally a masterpiece, you can try and send it to the press and they’ll make it a viral sensation. But that’s the thing about masterpieces: they’re one in a million things. To support this status, a game should have outstanding visuals, be a gameplay innovation, or offer a new, amazing experience. It should also be so captivating that the players will recommend it to their friends.

Influencer marketing. It may seem too easy: you just buy an ad placement in a blogger’s video and wait for a flood of installs from their audience. Especially now, when it’s possible to work with some influencers using a trustworthy CPI model.

But if you’ve never worked with influencers before, the risk of a failed investment is too high. Firstly, the ad placement itself may cost anywhere from thousands to hundreds of thousands of dollars. Secondly, no one can guarantee that the blogger will make a high-performance ad. A successful influencer campaign demands a detailed brief based on your ad assets, and to make a good brief for a project you’ll need dozens of test flights. Such campaigns should also run across many influencers’ channels.

Cross-promotion between projects. If you already have traffic and an audience at one project, cross-promotion can work for you. For example, you can make similar projects and share core audiences between them. But for that, you’ll have to understand which projects share a target audience and which do not. It doesn’t seem like a good idea for an indie developer with one or two games, so cross-promotion is mostly used by larger publishers with a big assortment of projects under their wing.

Platform featuring. If your project performs well, it can be eligible for platform featuring. For smaller companies, featuring is mostly a lucky coincidence. For a publisher, featuring is an established relationship with the platform, and details can be discussed upfront to ensure a successful placement.

There are specific ways of working with console platforms, but we won’t get into them today.

Viral organic traffic. Even though it’s a kind of organic traffic, it can be worked with. For easier understanding, let’s think that 4 mid-core players brought with ads can “acquire” one organic player. The virality coefficient can be optimized too.

ASO. A game can be found in an app store without advertising — with the help of App Store Optimization

Working with ASO can be divided into two basic parts:

1. How the players reach your page.
2. Conversion from the page into installs.

Page search is divided into two more parts: “search” and “explore”. “Search” is just a search tab in the app store: the user puts in the keywords and gets the relevant results. “Explore” is any relevant content compilation, such as “Similar Games” or “Other games from this publisher”. Free game charts fall into the “Explore” category too. Using search and explore mechanisms, the players reach your game’s page organically.

Each platform has its specifics. For example, Apple Search Ads allow you to rank higher with particular keywords.

There are benefits to posting your game using the publisher’s account. That way it gets into compilations more frequently, and can also attract a share of the audience of the other games the publisher posted. Even 1% of a successful project’s players that has a million installs a day is 10 thousand installs. Such growth is possible to achieve even by just placing the games next to each other. In that case, your logo can be placed on the splash screen.

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