PUBLISHING FUNNEL (PART III)
Performance Marketing has evolved in the past few years
to the point where testing is essentially the norm for any app you make. Google supports this process with an alpha, closed beta and open beta track on your console that allows for further testing to make for a successful product.
On this site, I discuss a lot about in-game system designs but recently no matter how much i delve into how a system works, if you’re not getting enough users into your product then there is really no point even making the game. Some would say.
User acquisition has become a full time job where identifying the best user base for your product is established through ad campaign management than a creative director or producer who speculate what the market wants and chooses a specific direction in how the product is made. Those days are over, but if it isn’t at your current studio, it’s time to look for a new job.
Performance marketing has paved the way for many different approaches in angles to position your product, but with this post I want to focus on 2 specific approaches to an ROI positive publishing funnel.
CPI and CCA
The Cost Per Install approach is one of the most common approaches publishers take in publishing an app. After all it’s the easiest.
The Cost per Install approach essentially takes your Cost to acquire any User and determines how long the Payback period of acquiring these users are. Which is also called ROAS (Return on Advertisement Spend)
So let’s just say it cost around $0.50 to acquire a user on facebook. Based on the avg. lifetime per users in your game, will determine your ROAS on this specific user but adding the using the below equation to determine your actual LTV.
Actual LTV = ARPDAU * (x+1) Retention % (n)
This will determine your real LTV and as long as Actual LTV > CPI than you need to look into scaling up these adsets and acquiring ‘this’ base as much as possible, buy retargeting or creating look alike campaigns.
Cost per Customer Acquisition Strategy is a different approach which can be highly effective but at a pretty expensive price tag. For anyone wanting to inherit this User Acquisition strategy they should start by reading Part 1 of the Publishing funnel and making sure that your product has all the features for the users to funnel through to the end of the Publishing funnel.
Just a quick recap, the publishing are the below steps
- Retention / Referral
For a CCA strategy Loyalty becomes an extremely important feature set since this completely emphasizes on re-conversion than just your initial conversion.
For example if you were managing a hyper casual product, you wouldn’t run a CCA campaign strategy as the players usually funnel out at the Retention layer and at best the Conversion Layer. Therefore seeking out Customer (Defined as users that have purchased something in your product are tagged as Customers) in your Ad campaign strategy will be sub optimal and focusing your efforts on low CPI and utilizing something call the ECPI strategy to be ROI positive makes the most sense. But I Digress
The CCA strategy requires extremely strong Loyalty features that have ‘Customers’ coming back spending. Loyalty features are deep meta systems that require players to manage their account constantly to stay competitive in the game.(which i’ll probably get into depth later in another post)
A Look at Customer Acquisition Cost
The reason for the necessity for strong loyalty feature is because if the strategy is CCA driven than the team is required to utilize something called the CLTV model where the developers are only looking at the
CLTV > CCA
The difficulty of this strategy is that, at current, the average cost per customer costs around $35 per / customer.
Yes $35 (This is for Action Games)
Therefore for every customer acquired through UA efforts has to pay back over $35 or it will never be ROI positive. So make sure you have plenty loyalty types features in your game or you’ll have to pivot back to a CPI based strategy.
The only good news is that the average customers sticks around 5 to 10x longer than your average user. Therefore if you manage to increase your ARPDAC as high as possible, the potential to payback the CCA cost is a reality.
Note: a lot of these notes are based on the assumption that Organics are not included and purely performance marketing. Assuming that organics are going to be the variable to help your product be ROI positive is fools gold and should rethink your strategy ASAP
Just for some examples of products i currently manage in the action RPG space, were seeing DAC retention as high as 50% after 30 days.
To sum up, choosing your publishing strategy will be imperative to communicate to the producers and designers so they can prioritize the feature sets to make for a success product