Adjust panel: The state of user acquisition for mobile games

Acquiring users for mobile games isn’t the sexiest part of the game industry. But it’s a critical one. And so I was happy to get caught up on the subject of the highly automated and strategic process of acquiring new users through mobile advertising campaigns.

I moderated a panel on the subject at Adjust’s Mobile Spree event in San Francisco. It got a lot of attention, as mobile gaming is a $70 billion market, and it is the biggest part of gaming. And games account for 10% of time spent on mobile devices, but 74% of revenue in the mobile game industry.

And acquiring new gamers isn’t easy for mobile games that have been around for a while. User acquisition managers are dealing with the automation of the industry, and they’re busy weighing how much effort to put into re-engagement versus getting new users. And the market is changing, with the rise of hyper-casual games, where players spend a short amount of time on some very casual apps.

My panelists included Robert Garfinkle, senior user acquisition manager at Big Huge Games, and Kim Bhatha, senior lead for growth marketing at Zynga.

Here’s an edited transcript of our interview.

Robert Garfinkle: I’ve been in the gaming space about seven years. I got my start at Elex, which was a Beijing-based strategy developer. Since then I’ve been around to Gameloft and Netmarble and Nexon for the last three and a half years. Now I’ve made the transition to a Nexon-owned development studio, Big Huge Games.

Kim Bhatha: I’ve been in gaming for about nine years. I’ve been at Zynga about four and a half years. Through my time at Zynga I’ve touched different genres of games, from FarmVille to poker to Words With Friends.

GamesBeat: Mobile gaming is a $70 billion market now, the biggest part of games. I was looking at some interesting stats. Apparently 10 percent of time is spent on mobile games, but games account for 74 percent of the revenue in the mobile industry. Games lead the way in trends. An initial question would be, user acquisition in this space has always been changing. I wonder if you could describe what your job was like a few years back, what you remember about it, versus what user acquisition is like now.

Garfinkle: Diving right into how it’s changed over the years, there’s a lot more marketing automation. There’s a lot less manual verification that this install came from this publisher at the right rate. There are a lot fewer disputes and a lot more checking on the mobile measurement partner (MMP) side for fraud, more verification in most regards of the quality of the installs you’re getting. It’s also changed a lot in terms of scale. There are a lot more users in the audience now, and a lot more diversity in what qualified users look like.

Bhatha: I’ve definitely seen a lot of changes over the last couple of years. I remember grinding and segmenting my audiences and countries and ages. So many different ways you could segment your campaigns. Just optimizing toward an app install. Recently, like Rob mentioned, it’s moving more toward automation and machine learning. There’s less visibility, less segmentation, and targeting broader, larger groups of audience, as well as focusing more on post-install events.

GamesBeat: What do you think you’re going to do so you don’t get automated out of a job?

Bhatha: You need to strategize. That’s why UA managers will still play a huge role, I think.

Garfinkle: You can’t really rest on your laurels, but I think by increasing the integration that UA managers have with product, there will always be a lot of leverage we have to start growing further.

GamesBeat: We were brainstorming earlier about what’s changed in the game market over the last year, the last couple years, and we zeroed in on hypercasual games. The best way to describe these games could be the games you play while you’re on hold on the phone. Or when you blow your nose on a Kleenex and throw it away, that Kleenex is the hypercasual game. What would you say about how this has affected user acquisition?

Garfinkle: What it is, it’s really grown the overall audience size in gaming, well beyond what it used to be. You used to have a few million core users in the U.S. market. If you were acquiring an install, it was qualified. It was a user that understood core gaming concepts and was able to play the game that you wanted them to. That’s not so true anymore. There’s a very large new-to-gaming audience that’s being brought in by hypercasual. It remains to be seen if they’re going to start becoming more literate as time goes on.

Bhatha: With hypercasual, it’s not made for a “gamer.” It’s more for 45+, 55+ women playing those types of games. It opened up more inventory for other games to increase their userbase, but at the same time, it also made the market more competitive. It increased the cost.

Garfinkle: It’s cast a very sharp light on the idea that installs equal revenue. It’s very much invalidated the idea that you can just dump installs in a game and have that result in higher aggregate revenue.

GamesBeat: I saw a report from YouAppi out this week that said you pay so much more to just try to retain your users, but retention has been going down, and some of the blame goes toward these hypercasual games. Your game, DomiNations, is in a fairly hardcore genre. It’s almost like you want to sort these people out.

Garfinkle: We have fairly advanced systems for identifying publishers that are delivering less than ideal installs and reducing our market exposure to those.

GamesBeat: Zynga’s games are more casual, though.

Bhatha: Hypercasual is definitely making the market more competitive, but it’s not necessarily the type of users that casual games are looking for. We’re looking for users who will later monetize, and I don’t see the users who are coming in from these types of games as high monetizing users.

GamesBeat: For me, games are always fun because there are so many different crazy things happening. Blizzard stepped in it with the esports player who spoke out about Hong Kong and got banned from Hearthstone esports. It’s been interesting how brands have been chasing after esports, and then they run into the kinds of surprises that can happen, whether it’s racism or sexism or politics. Then there’s AR and VR. AR has a little more relevance to mobile games. Google’s Stadia is also going to have some relevance to mobile. The FTC is looking at loot boxes and gacha mechanics.

I wonder what of these things show up on your radar more. Or do you have a more heads-down approach to doing your job?

Bhatha: I can speak to AR features. In our racing game CSR 2, we released a feature where players were able to take pictures with their dream cars in their driveway, cars they can’t afford in real life. It was a huge success for CSR 2. When it comes to things like Oculus and other devices, it’s more expensive to make games there, but if you can innovate with these types of features in your games that can cater to existing players and keep them engaged, that’s a good step.

Garfinkle: Talking about Google Stadia for a minute, what it represents is a convergence event happening in gaming overall. I believe we’re going to see this over the course of several years. The boundaries between the different consoles and platforms are going to break down. Gaming will be more of a universal experience, shared by your phone and your tablet and your PC and your home console and other sort of ambient devices. That’s going to really change the way we do things, not least of which – prescient, considering we’re at a conference sponsored by Adjust – will be really changing attribution and the way we think about these things.

GamesBeat: There will be a universal pool of users, then.

Garfinkle: Theoretically, yeah.

GamesBeat: Does that have more downstream effects? How would you think about that?

Garfinkle: You mentioned legislative action. There’s talk about loot boxes, for one, but beyond that there are lots of concerns about data privacy and the way in which users are being tracked or analyzed. That’s a question that needs to have some mature discussion, but I don’t know specifically where it will go.

GamesBeat: We’re coming into a kind of borderless world. The borders between platforms are coming down. The borders between countries are coming down. That’s why things like Blizzard and Hong Kong become interesting.

For marketers from other disciplines, are there things they can learn from gaming?

Garfinkle: I would suggest that games have always lead on post-install and deep funnel analysis and engagement. If there’s anything that can be gained for other disciplines—if you just study the way that users move through your funnel and understand more about the longer-term journey, I think you’ll gain a lot of knowledge.

Bhatha: That’s what we see. When it comes to differentiating gaming from other verticals, we focus on the lowest cost possible. We have to find the lowest cost users where we can spend more and get the highest returns. We also have to focus on understanding the product and the player base that we’re advertising to. As Rob mentioned, it’s more about understanding the user flow throughout the game. Every event in the game impacts the user journey. They can drop out any time, so we have to be careful to make a product that can retain those users.

GamesBeat: Is influencer marketing coming into your focus?

Bhatha: If you look at kids these days, they’re not watching TV. They’re watching YouTube, and they’re watching influencers. It’s becoming a big part of UA. We’re starting to look into influencer marketing as part of our overall strategy. Google and Facebook are both coming up with products. The only caveat there is measurement. They’re trying to figure out attribution, how we can track these types of campaigns.

Garfinkle: On that measurement topic, there’s a lot of debate back and forth about how you figure out influencer deals. Do you do CPI? That’s the most risk-averse of the models. It’s comfortable for most advertisers. But it’s not something most influencers are interested in. There are mismatched interests when it comes to the business side of influencer marketing. It gets very hard to track.

Bhatha: If you think about giving out promo codes for the game that redeem for something, that’s one thing you can track. But measurement is still very up in the air.