Identifying the marketability of a game

The app stores today are nearly at saturation, which is why unless developers lock in a promising IP, it’s no longer enough to develop a good game with a good (enough) LTV and hope it reaches the top of the charts on organic installs alone. Rather, every developer must run user acquisition campaigns to scale their app and turn it into a business. The challenge is identifying which games to invest marketing budget in, and which to kill. As it is now, developers evaluating their game for global launch will normally only consider internal metrics like retention, ARPDAU and short-term ARPU, assuming that if monetization works well, then user acquisition will, too. In these cases, low LTV games automatically get shelved, while high LTV games are pushed forward.

The problem is, however, high LTV games don’t always make the best businesses — in other words, games aren’t worth much if there isn’t a large enough market interested in downloading them. This is why metrics external to the game like marketability, which measure product-market fit, must also be factored in during a developer’s go-no-go process. By considering marketability, developers may see that a low LTV game with a large potential market can actually drive more revenue than a high LTV game that doesn’t garner enough market traction.

Defining marketability

Marketability can be quantified by the campaign’s eCPM. eCPM is typically considered to be a purely ad monetization-related metric. However, it’s actually even more important for user acquisition managers since it signifies the ad revenue generated by a campaign and therefore where it’s being ranked by the different ad servers and how well it’s likely to perform. The campaigns that generate the highest eCPMs will be the ones to top the ad networks’ data science ad serving models, winning the most impressions and scaling the fastest. For user acquisition managers then, eCPM represents their buying power in the app ecosystem. While understanding eCPM is simple, as long as impressions and cost are measured, it can also be estimated by multiplying eCPI and IPM of a certain line item.

IPM, or the number of installs generated for every thousand impressions, is a lesser known metric which is often overlooked by marketing teams. But in fact, it’s critical for UA managers looking to evaluate the performance and efficacy of their campaign. Ultimately, IPM speaks to the market’s response to a game (and the strength of a campaign creative). For example, if a user acquisition campaign for Game A generates an IPM of 5 and a campaign for Game B generates an IPM of 50, we can conclude that the market prefers Game B.

In this scenario, even if the LTV and corresponding CPI of Game A is less than 10x higher than Game B, the eCPM — or the ultimate marketability — of Game B ends up being significantly greater, due to the vast difference in IPM. Game B, because of its high eCPM, gets placed higher by the ad servers since it is able to generate more ad revenue for publishers than Game A. A higher eCPM means access to more impressions, greater scale, and ultimately a higher volume of installs, creating a virtuous cycle of growth. Surprisingly, we see that the low LTV game in this case makes for the better business.

How to increase marketability

CPIs are of course notoriously difficult to increase, as they depend largely on budget and LTV — two factors that take time and resources to change. Fortunately, there is much more freedom in optimizing IPM — which is driven by the performance of some key elements in the top of the funnel, including measurement and attribution, suppression, creative optimization, ASO, and a clean portfolio of ad partners that don’t engage in attribution manipulation and fraudulent tactics which may drive eCPM down on legitimate traffic sources.

Developers can start with the creative soft launch, a process many savvy advertisers employ to determine the creative that delivers the highest IPM ahead of the global launch. During this time, which is typically split into three iteration cycles, advertisers continuously eliminate the lowest-performing creative from their campaign. The creatives that move on can be further optimized by leveraging in-ad data and analytics which offer advertisers engagement numbers on a range of in-ad events — including drop-off points, speed, duration, and lives. For example, in-ad data might show advertisers that the playable set to ‘medium’ difficulty level consistently drives high IPMs, highlighting the creative that maximizes their game’s marketability.

Once the creative data has matured, developers should compare the ARPU curves of users acquired by each creative and choose the creative that results in the highest eCPM based on the combination of your IPM and the CPI you’re able to bid — not necessarily the highest ARPU or IPM.

Following the soft launch, developers can continue to optimize for IPM in other ways. For example, they can employ an app store optimization strategy that builds a cohesive connection between the creative with the app store page. They can also be sure to target the right group of users during a campaign, and utilize suppression lists — two strategies that ensure no impressions are wasted, which may drive IPM and as a result marketability down.

In addition, reviewing IPM benchmarks for relevant categories and target markets is critical. If, for example, developers are maxed out on IPM and see that their eCPM is not competitive enough, they’ll understand ARPU is the metric to optimize, and shift focus to optimizing the product rather than the creatives, which can be done by perfecting the game’s onboarding funnel, stability, retention and economy design.

What eCPM makes a game marketable?

To achieve scale and marketability, campaigns must reach a certain eCPM threshold. Although eCPM depends largely on the game’s category and target country, if a campaign’s eCPM is below $5 in tier 1 markets, the campaign is unlikely to ever generate enough impressions within a network, no matter the channel it’s running on. The networks will simply not prioritize this campaign, and it’ll engage with a low number of users — making these games unmarketable.

The campaigns with eCPMs between $10 and $35 have a greater chance to succeed, and is where most successful games tend to fall.

The campaigns that drive eCPMs which are greater than $35, however, will consistently top the impressions share of voice and win a significant part of a network’s impressions for relevant audiences. In fact, campaigns with extraordinary IPMs can boost the eCPM so high that advertisers at this point have the luxury of dropping their CPIs while still being able to drive the same volume of installs — resulting in even higher profits — just because of how high and for how long the ad networks will prioritize their campaign.

Going forward

Going forward, developers must consider marketability early in the shipping process, and not only after the game is given the green light. Marketability answers the simple question: does the market want to play my game? Assuming IPM is optimized and ARPU allows them to scale up, only with that answer will developers know whether their game can generate enough scale to be profitable long-term. If IPM and ARPU are too far off, it’s time to move on to the next game.