Why monetization and marketing need to work closer together
Traditionally, ad monetization and user acquisition have been run by discrete teams at most major game companies. Theoretically, this makes sense. The two teams have different remits and will work to fulfil different KPIs. One team will operate in the internal world of the game, while the other will focus on the outside world, bringing new users from the ‘market’ into the game. But true game growth is a loop not a funnel, and savvy game companies are gradually uniting these two areas of their business, especially as ad monetization becomes an increasingly important revenue stream.
So why are smart gaming companies merging their monetization and marketing teams?
One business point of contact with more power
For many game companies, the partners they work with for user acquisition are the same as for monetization and vice versa. By having the same contact person managing the business relationship with ad networks, game companies are empowered to leverage the activity on one side of their business to drive benefit on the other. For example a buyout deal on all U.S. impressions on the monetization side could be parlayed into extended support with creatives on the user acquisition side. If the two sides of the business aren’t managed by the same person, then connecting those dots becomes infinitely more challenging. In fact splitting the relationship can even lead to convoluted operations that ultimately result in inefficiencies.
Familiarity with ad serving for better UA
It’s not in the average user acquisition manager’s skill set to be deeply familiar with ad serving, or how each network uniquely prioritizes which ad to serve where and when. Their focus, on most channels, is on setting Return on Ad Spend (ROAS) targets, initial CPI bids, and then measuring the scale and return provided by each channel and adjusting accordingly, to maximize profit. It may be confusing why different ad networks deliver different volumes of installs, even though the CPI bid is the same.
What’s missing from their view is the in-depth understanding of how ads are prioritized in each network. Without understanding the unique ad serving logic, data science and targeting capabilities of each platform, UA managers will be unable to pinpoint exactly what can and should be optimized. Depending on if one network is strong with lookalike audiences while another has a robust solution for ROAS optimization, a UA manager familiar with ad serving can adjust their strategy dynamically per network.
A familiarity with ad serving is critical to a monetization manager’s skill set, however. Therefore when these two functions are merged or work closely enough together, the person or team responsible for user acquisition is able to leverage their familiarity with ad serving to take their campaign efficiency to the next level.
Reveal red flags and opportunities
Merging or syncing monetization and marketing teams can also serve to reveal opportunities and sometimes raise red flags. For example, in an ideal situation where monetization and marketing work together, it would follow that a game company’s biggest network for user acquisition would be the same as their biggest network for monetization.
If a UA manager is seeing the greatest scale from a particular network, then it would make sense that that network monetizes similar apps well, so they should also appear prominently in your waterfall. Conversely, if you’re buying from a channel you’re not monetizing from, it should be an immediate red flag. Either you’re missing out on potential ad revenue, or you’re buying from a channel that’s not serving ads and you’re wasting spend on fraudulent traffic.
Similarly, knowing who your biggest advertisers are on the monetization side can hint at potentially lucrative or high-performing sources for your user acquisition campaigns. If hyper casual advertisers are seeing high conversion rates on your traffic, it might follow that you would find potential new users on theirs. Or if a certain network is driving good ad monetization performance for match-3 games, it would probably be a significant UA channel across other similar apps.
Measure the full loop for maximum optimization
Finally, and most importantly, merging monetization and marketing oversight means one owner or team is responsible for measuring the entire growth loop and is in possession of the full picture.
They’ll have a deeper understanding on each user — the channel they came from, which creative brought them in, and how they engaged with the app in terms of both IAP and ad revenue monetization. With visibility into the full revenue generated by users from both IAPs and ads combined, the UA team can then make more informed bidding decisions according to their LTV modelling and apply these data insights into their ROAS optimization strategy, as well as apply better segmentation on the monetization side.
What’s more, the full loop analysis would enable the owner to better prioritize where their efforts should be spent. For example, if a game is seeing good monetization metrics but UA isn’t scaling, you need to have a clear vision and options for where and how you can improve the top of the funnel to maximize the game’s potential. Similarly, if a game has a high IPM (installs per thousand impressions) but the campaign isn’t scaling, then you need to bid higher to achieve higher eCPM which will result in higher scale and revenues. By using your top partners as benchmarking sources, you can better understand how your ARPU and IPM compares with similar apps, providing guidance on what to focus on first.
They will also be able to understand the significance of eCPM on both the monetization and marketing side, and compare the two to understand how much more potential a game has in terms of scaling UA or optimizing monetization. Kongregate’s VP Marketing & Ad Monetization has discussed how having a view on both sides of the business helps them better manage their UA activities.
The various benefits which come from closing the loop on monetization and marketing is likely behind a trend of more and more game companies merging management of these two activities. And more game companies are doing so. Executives at game companies, like Kongregate, Jam City, Pixelberry and Big Fish Games have merged management of monetization and marketing under one position. With one owner or team able to track, analyse and make decisions, gaming companies will be able to optimize the loop to constantly maximize LTV and profit in a virtuous cycle of accelerated growth.
This article first appeared on VentureBeat. Read it here.
