ABOUT OUR GUESTS: Peggy Anne Salz (Mobile Groove)  | Keith Kawahata (AppLovin)


| Cameron Thom (Adikteev)  | Jon Hook (BoomHits)




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KEY HIGHLIGHTS

🎈 Retention marketing – the new buzzword of 2022

🔋 The economics behind retention vs. acquisition

🛎 Retention strategies for 2022 

🔍  Web 3 – the latest emerging trend

🌊 The popularity of crypto gaming

🏹 The business model that allows all stakeholders to monetize a game

📣 Factors that contributed to the rise of cross promotion

💰 Performance retargeting was not universally adopted

🎤 Data science can help predict user behavior

🚴🏻‍♂️ The presence of self-serve tech platforms to facilitate self-publishing

🧦 A community to help fund game developers to self-publish

KEY QUOTES

Why retention makes more sense than acquiring

 If it’s five times cheaper to retain users than to acquire new ones, then it makes sense to do what you can to keep users longer.

Does the play to earn model look promising?

As we saw in prior cycles, I would expect there to be several contenders fighting to be the backbone of the play-to-earn ecosystem, which is going to make it a highly fragmented start, but that’ll likely consolidate and standardize over time.

The rising popularity of NFTs

I think that there was around $2 billion of volume on NFT’s in the first couple months of 2021 alone, which was like a 2,000% increase from the fourth quarter of 2020. I would expect that volume increase and audience increase to be propelled by gaming and to propel the whole ecosystem into the mainstream in 2022. 

Segmenting by user behavior to eliminate a negative impact

If you do care who sees ads and monetize over longer periods of time with purchases, you don’t want to risk alienating that user and need to limit that risk through segmenting by user behavior, ad format, and position in the waterfall to be more thoughtful in your approach. An example is users who play a ton, but rarely make purchases. Not much risk there. But still, you’re purchasing your own inventory with your competition and trying to limit risk through resource intensive studies on  audiences and behaviors to minimize negative impact.

Making use of data science to predict user behavior

We see advancements in diagnosing and predicting user behavior, with data science making growth teams more accurate and pinpointing an action which each user will do and when they’ll do it. This creates the opportunity to further`pinpoint the next app that the user is most likely to appreciate, within your portfolio, potentially even across genres. 

The impact of ATT on hypercasual ads

We’ve seen crazy CPIs on Facebook, iOS, and Android. So more people are trying to test on Tik Tok and try to find new ways to go. But I think we’re seeing a lot of hypercasual studios realize that if you break free from the publishing model, and actually focus on games with more LTV, it gives you the freedom to create a different kind of game.

The possible safety nets for hypercasual games

I think the rise of play-to-earn blockchain games is now really interesting, particularly for hypercasual developers or studios that can build games with a bit more matter to them. The way I’m seeing these private token sales and NFT drops, it’s a way – if you’ve got a really neat idea, and you can execute well, there have been a few examples recently, you can raise 1 to $3 million very quickly.

FULL TRANSCRIPT BELOW

SHAMANTH

Peggy Anne Salz is a consultant, analyst and writer at Forbes. She is also the founder at Mobile Groove, an app and content marketing agency. 

In today’s episode, she tells us why retention could be a very important weapon in a growth marketer’s arsenal in 2022.

Here’s Peggy.

PEGGY ANNE SALZ

Hi, I’m Peggy Anne Salz, mobile analyst, tech consultant, senior writer at Forbes and founder of Mobile Groove, my app marketing and content marketing agency.

2022 will be remembered as the year that retention marketing became a buzzword. So what is retention marketing? Well, it’s lifecycle marketing at some level, but with a twist, very important, because rather than focus on acquiring new users, you focus on increasing the profitability of the ones you already have. So in a word, customer lifetime value rules. 

So why retention marketing and why now? Well you know better than I do, that changes in privacy and all the changes Apple threw at us in 2021 mean marketers are stuck a little bit between a rock and a hard place. It’s tougher than ever to target, let alone retarget. Not to mention, more expensive. So a sharp focus on retention marketing makes real sense, to do everything you can to make every customer you do acquire more valuable. So I want you to think about that – and the money on the table here.

Consider milestone research from Bain and Co. They are the smart people who brought us the Net Promoter Score, so their research holds weight. They found that it can cost between five and 25 times more to attract a new customer than retain an existing one. And that research is eight years old, it was at a time when the world was one big, beautiful blue ocean, user data was plentiful, legal and performance marketing was a near perfect science. Well, fast forward to now, and it’s not that way anymore.

If it’s five times cheaper to retain users than to acquire new ones, then it makes sense to do what you can to keep users longer.

So what is a good retention strategy? Well, it’s got a mix of components we’ve heard loads about. The momentum will pick up in 2022 and we will see marketers get down to business. You can’t keep users loyal to a bad app experience, so you have to have a good product. No surprises or shortcuts there. Brand is a big help when it comes to filling the funnel, and more importantly, building the fandom that feeds retention. And let’s not forget personalization, or individualization because common sense, nobody wants to feel like a number. 

And in the spirit of the pirate metric – the RRR, I have come up with the three R’s, you need to be relevant and be really real. After nearly two years, in various stages of lockdown, people are not happy. They have no patience for BS. So you need to be authentic and accurate. And that means being real. How do you do it? You use the few data points you have, to speak to users like people. So in everything you do at every touchpoint everything you can imagine from the tone that you use to communicate via email, WhatsApp, to the stuff you suggest, be real and relevant. 

So opportunities abound if you do your homework. Make 2022 your year to experiment and of course, prosper.

SHAMANTH

Thank you Peggy!.

Retention is indeed the name of the game, more so for subscription apps.

Keith Kawahata will take over the next section to talk to us about the gaming industry learning to leverage the play-to-earn model.

Keith heads games at AppLovin and is responsible for expanding AppLovin’s advertising focus to now include amplification on the game development and product side.

Here’s what Keith has to say:

KEITH KAWAHATA

Keith Kawahata here, Head of Games at AppLovin. To make some predictions for 2022, by far the most interesting dimension within our industry right now has to be web 3. At the intersection between web 3, crypto and gaming, we see the early signs of a new business model emerging, currently called play to earn and that business model being focused on chain virtual asset ownership. It is so very early in this cycle. However, investment in the community around the space is just growing exponentially.  As we saw in prior business model evolutions, I would expect crypto gaming to increase the audience transparency and inclusion within the market, both from a consumer perspective and from a developer perspective. 

As we saw in prior cycles, I would expect there to be several contenders fighting to be the backbone of the play-to-earn ecosystem, which is going to make it a highly fragmented start, but that’ll likely consolidate and standardize over time.

Digging a little deeper, I think NFTs in particular are going to grow much bigger in gaming, and that gaming is going to help propel NFTs into the mainstream, much more than they already are. The alternative of on chain virtual asset ownership is not that big of a leap from the centralized and custodial ownership of virtual assets that has already existed in  gaming for decades. 

So what we’re seeing in the web 3 space, is that this business model is already providing opportunities for players, creators, developers to monetize and collaborate in new, exciting and decentralized ways. To throw out a couple of stats,

I think that there was around $2 billion of volume on NFT’s in the first couple months of 2021 alone, which was like a 2,000% increase from the fourth quarter of 2020. I would expect that volume increase and audience increase to be propelled by gaming and to propel the whole ecosystem into the mainstream in 2022. 

SHAMANTH

Thank you Keith for your thoughts, those stats are quite a revelation.

Our next guest is Cameron Thom, Director of Sales at Adikteev. Cameron dives deep into the world of cross promotion for game publishers. His experience with different gaming apps has obviously helped him identify and differentiate between genres when it comes to cross promotion.

Over to Cameron

CAMERON THOM

I’m Cameron Thom with Aditkteev. Our prediction for 2022 is a meteoric rise in cross promotion for gaming publishers. When we say cross promotion, we’re talking about sending a user of your existing app- the source app, to a new app – the destination app with an install ad. 3 factors drive this prediction. 

One, the Apple privacy changes limit user level targeting capabilities for non IDFA inventory, which has caused UA cost for opt-in inventory to rise to consolidation in the industry across companies that provide different services, supply, analytics, publishers, and has advertisers questioning key relationships due to perceived conflicts of interest.

 Three gaming studios going through acquisitions of their own are suddenly in charge of different genres of games with very diverse audiences. So what’s been the response to these factors so far? And how does this set up the rise of cross promotion for marketers? Well, we’ve seen a trend towards further consolidation on spending toward the self attributing networks like Facebook and Google, as marketing teams went more risk averse during the initial response to iOS 14. 

Performance retargeting, kept chugging along to see enough users opt in around 30% on gaming to still have an addressable audience, and in fact, have better performance on revenue returns overall. However, not everyone adopted performance retargeting, and for some genres like hypercasual, it often lacked the unit economics to warrant running it. This leads marketers looking for an answer that already had been used by some teams – cross promotion. 

While ad ids will go away, companies can still track users across their portfolio with IDFV or publisher ID. There are two traditional ways companies have addressed cross promo. If you make money on ads, like hypercasual games do, you have a pretty quick LTV and turn arc. So beyond the first ad, it doesn’t risk you anything to purchase an impression or two from yourself to advertise on your own app. Now,

if you do care who sees ads and monetize over longer periods of time with purchases, you don’t want to risk alienating that user and need to limit that risk through segmenting by user behavior, ad format, and position in the waterfall to be more thoughtful in your approach. 

An example is users who play a ton, but rarely make purchases. Not much risk there. But still, you’re purchasing your own inventory with your competition and trying to limit risk through resource intensive studies on  audiences and behaviors to minimize negative impact. 

So how is this overcome in 2022? We see advancements in diagnosing and predicting user behavior, with data science making growth teams more accurate and pinpointing an action which each user will do and when they’ll do it. This creates the opportunity to further`pinpoint the next app that the user is most likely to appreciate, within your portfolio, potentially even across genres. 

As a user’s awareness grows from an individual title to that of the studio with a portfolio, publishers have the opportunity to create a longer and more profitable relationship with their user base. That’s why we see studios betting big on cross promo in 2022. Thank you.

SHAMANTH

Thank you Cameron for descrbing how the mechanics of cross promotion will evolve here.

We now have Jon Hook who shares his views on the shift to self-publishing for game developers. Would it be worth the move for small  developers? Let’s hear it from Jon.

JON HOOK

Hi Shamanth, Thanks for having me back for your end-of-the-year special episode on the Mobile User Acquisition Show. It’s been a great year, and what do I think are going to be some of the top trends as we look into next year? 

On the game development side one of the big trends is going to be this greater move to self publishing for games developers. Why do I see that happening? There are a few reasons. First of all, there’s more and more self-serve UA technology partners and services than ever before. So that barrier is removed, because it’s very easy to work with great partners who have got all the technology you need from the mediation, the ad network, the attribution tools, the creative tools, as well as being able to put some knowledge on top of that. 

Secondly, I think the barrier of growth capital in UA funding is disappearing. There are loads of great UA funding companies around now. Particularly if you’ve had a hit game, and you’re looking to raise money, there’s such a vibrant community of angel investors as well. The classic hypercasual publishing model just feels really outdated now for these top studios. I think there’s some new blend of VC/publishing service models coming in. Speaking really honestly, I think a lot of the hypercasual gaming community is a bit worn down now because of ATT and the sheer volume of competition. 

We’ve seen crazy CPIs on Facebook, iOS, and Android. So more people are trying to test on Tik Tok and try to find new ways to go. But I think we’re seeing a lot of hypercasual studios realize that if you break free from the publishing model, and actually focus on games with more LTV, it gives you the freedom to create a different kind of game.

So I think that’s driving it as well. 

Last point, it might be a bit contentious, but

I think the rise of play-to-earn blockchain games is now really interesting, particularly for hypercasual developers or studios that can build games with a bit more matter to them. The way I’m seeing these private token sales and NFT drops, it’s a way – if you’ve got a really neat idea, and you can execute well, there have been a few examples recently, you can raise 1 to $3 million very quickly. 

You can use that to start building your studio, hire the team you want and you could have two parts of your business. You could have your game development team for mobile games, and then your blockchain team. It completely frees you from the need for any publishing partner in the short term because you’ve just raised $3 million. You can actually focus on building the game, building out your own tech and tools. Then it’s entirely down to you whether a publisher fits in. 

So in summary, I think all of these moving parts next year are super exciting for mobile games developers that are looking to gain more freedom and move into the distribution side of the business themselves. And I’m really excited to see what everyone delivers next year. Best of luck with all your game development and I wish you all Happy Holidays.

SHAMANTH

Thank you Peggy, Keith, Cameron and thank you Jon for sharing your predictions with us in this final episode of the Mobile Growth Crystal Ball series. 

You can check out our first two episodes in the series on MobileUserAcquisitionShow.com or wherever you get your podcast fix. The first episode features Danika Wilkinson, Andy Carvell and John Koetsier and our second episode guests include Melissa Zeloof, Natalia Drozd and Jerome Turnbull.

We’ve come to the end of the Mobile Growth Crystal Ball 2022 series and incidentally, also the end of the Mobile User Acquisition Show for 2021. 

We’re taking a break until next year and we’ll be back with a new set of ideas to make this podcast bigger and better.

Thank you for tuning in, see you next year. Happy Holidays!

A REQUEST BEFORE YOU GO

I have a very important favor to ask, which as those of you who know me know I don’t do often. If you get any pleasure or inspiration from this episode, could you PLEASE leave a review on your favorite podcasting platform – be it iTunes, Overcast, Spotify, Google Podcasts or wherever you get your podcast fix. This podcast is very much a labor of love – and each episode takes many many hours to put together. When you write a review, it will not only be a great deal of encouragement to us, but it will also support getting the word out about the Mobile User Acquisition Show.

Constructive criticism and suggestions for improvement are welcome, whether on podcasting platforms – or by email to shamanth at rocketshiphq.com. We read all reviews & I want to make this podcast better.

Thank you – and I look forward to seeing you with the next episode!