Mobile Monetization Optimization

Richard O’Connell

Global Marketing Director PapayaMobile Inc

Papaya story so far…

Mobile GamesSocial

NetworkOpen APIs,

Game EngineCross-Promotion

Network

2009 2010 2011 2012

A few of our partners…

Overview

1.Monetization Overview2.Freemium Social

Games3.Freemium Ad

Supported4.Maximimizing lifetime

value

Awesome isn’t good enough!

Most aren’t getting rich from mobile

• 59% of Apps don’t generate enough revenue to break even on development costs

• 80% don’t generate enough revenue to support a standalone business

• 68% earned less than $5000 with their most successful app

http://app-promo.com/wake-up-call-infographic/

Mobile Game Monetization Models

1. Freemium in App Purchase

2. Mobile Ads / Cross-Promotion

3. Paid

4. Merchandizing

Social Games

Arcade Games

Deep Console style experience

Monster Global Mega Hits

Game Types Monetization Model

Today’s focus

1. Freemium in App Purchase

2. Mobile Ads / Cross-Promotion

3. Paid

4. Merchandizing

Social Games

Arcade Games

Deep Console style experience

Monster Global Mega Hits

Game Types Monetization Model

Today’s focus

1. Freemium in App Purchase

2. Mobile Ads / Cross-Promotion

Monetization Platforms Monetization Model

1.Monetization Overview2.Freemium Social

Games3.Freemium Ad

Supported4.Maximimizing lifetime

value

Consider Elasticity of Demand

• Price affects supply• $0 to $0.001 is huge barrier• $0.001 to $1 is easier• Multiple low price purchases

easier than fewer high price

True Fans make up just 4% of paying Papaya farm users…

…but account for 60% of virtual good revenue

“True Fans” spend a greater proportion on consumables

Offer low cost Consumables

• Each with their own play/refresh profiles

• Pay with Grind only• Pay with Cash only• Limit access by ‘Level’• Pay to skip ‘Cool-down’

Nagging has an impact on long term loyalty

Applying The Theory

Balance with different Durables

• Each with their own art style & impact on gameplay

• Encourage emergent play• Grind or in-game currency• Offset nagging of consumables

High spenders start small – but increase with time, peaking in 2nd and 3rd months

True Fans are happy to spend money in the long term

• Don't break the Free Player experience

• Takes 8-12 days to start paying• Make it great to spend the first $1• Nurture one-time spenders & low

spenders• What are your ‘Gateway’

purchases?

Free players are your most important marketing channel. Keep them happy!

Monetization 3.0

Make buying goods part of the fun

• Collection Cash-in• Grind relief goods• Level limited items• Purchase only items• Special “Level-clearance” items

Compulsion Loops - Give Players a reason to keep coming back

• Schedule of reinforcement• Grinding & flow• Visible achievement stream• "Just one more turn"• What happens between sessions?

Applying The Theory

Image Source: http://www.speedrungames.com/?cat=5

Reward repeat play with Collections

• Each with an art style relevant to their source

• Encourage gifting/trade with friends

• Trade in for Consumables • Trade-in for Unique Durables

Things to Avoid…

Things to Avoid…

• Don’t Punish Players• Don’t require purchases to

continue• Don’t make the game painful

without spending• Don’t sell goods players can’t

show offHappy free players are vital for your high spenders

1.Monetization Overview2.Freemium Social

Games3.Freemium Ad

Supported4.Maximimizing lifetime

value

In-game banners require large volumes of traffic

• Industry CTR for mobile ads just 0.79% in 20121

• Average eCPM for mobile ads just $1.35 in 20122

• Ads were only viable for mega hit titles such as Angry Birds. Players hate

banners. Most titles make little revenue.

1: http://www.forbes.com/sites/ericjackson/2012/08/03/why-the-higher-click-through-rates-for-mobile-ads-which-facebook-touts-mean-nothing/2/2: http://www.clickz.com/clickz/news/2220099/us-widens-lead-with-average-mobile-ecpm-of-usd137

• Interstitials produce high CTRs.• On AppFlood we saw a network

average of 9% CTR in October.• Top games over 30% CTR• ECPMs on AppFlood Interstitials

12x higher than banners

New ad formats a significant driver in game discovery

New ad formats offer hope!

Why do these ad formats work?

• Offers content related to users current behavior

• Users constantly looking for “Something else to do / try”

• Games have definitive end points. Game Over, level reached etc.

• Prospect of free new games always appealing. Earn from

churn!

Ad Optimization tips

• Show interstitials when game paused.• Show interstitials after levels cleared.• Show interstitials after new items are

unlocked.• Use interstitials after a game is left idle

for more than a minute.

Balance volume of ads with effect on retention

Try avoiding...

• Displaying more than one ad on a single page.• Interrupting any active gameplay.• Forcing users to click in order to complete tasks• Misleading users or causing accidental clicks

Poorly thought out ad placements can impact on retention

Word Drop Plus Oct 29th – Nov 4th

Average CTR15.04%

Dragon KingdomOct 29th – Nov 4th

Average CTR10.91%

1.Monetization Overview2.Freemium Social

Games3.Freemium Ad

Supported4.Maximimizing lifetime

value

• True fans can take 8-12 days to start spending

• Work with the user lifecycle to keep them engaged

• Build Anticipation between Games

• Cross-Game Virtual Currency

Typical number of Games an X-City player spends money

We don't just want a one night stand…

• Products have a lifecycle• Players also have a lifecycle• Churn is inevitable• Ensure churn is monetized

Use cross-promotions to maximize lifetime value

Traditional Ad Networks:Selling Traffic Buying Traffic

Total value lost to Ad Networks:

60%

Your Shar

e

Commission-free cross-promotion

• No minimum traffic requirements • No lengthy deal negotiations• Free to setup, free to use• 100,000,000s monthly impressions

available

appflood.com

Thanks!Richard O’ConnellGlobal Marketing Director, PapayaMobile

richard.oconnell@papayamobile.com

papayamobile.comappflood.com