don’t be afraid of incentivized...
TRANSCRIPT
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Don’t be afraid of incentivized ads!
Dr. Volkan Ediz Director of Product GDC 2015 – San Francisco
GREE confidential
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Agenda
• Who is Gree?
• Mobile Ad Industry
• Incentivized Ads
- Retention
- Monetization/Cannibalization
- Conversion
• Best Practices
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But first, who is GREE….?
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GREE Headquarters Tokyo, Japan GREE Interna7onal, Inc. San Francisco, CA GREE Canada Vancouver, BC
QUICK FACTS
6 Con7nents playing GREE games
1,800+ Employees Worldwide
13 Games made in North America
2004
2011
2013
MILESTONES GAME STATS -‐ 4 :tles in top 50 grossing as of Feb. 2015*
Crime City (Studios) Reached Top 10 Grossing in 140 countries Top 100 Grossing in 19 countries, over 3.5 years since launch
GREE – A Global Gaming Powerhouse
Knights & Dragons (Publishing) Reached Top 10 Grossing in 41 countries Top 100 Grossing in 22 countries
Source: *App Annie
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Where is mobile advertisting going?
• Estimated mobile advertising spending to reach $40 billion by 2017
• Mobile Ads account for 98% of Facebook’s revenue growth
• 80% Ad Revenue CAGR for Glu mobile, reaching
$12M/quarter - 15% of Total Revenue • CPI/eCPM will go up as big brands embrace
mobile ads • Multiple Acqusitions in 2014: Sponsorpay, Flurry,
AdColony Sources: Gartner Report 2014 http://www.gartner.com/newsroom/id/2653121 Facebook Revenue Growth: http://www.statista.com/chart/2496/facebook-revenue-by-segment/ Glu Earnings Report: http://phx.corporate-ir.net/phoenix.zhtml?c=207033&p=irol-presentations
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Incentivized Ads
Video Ads Offer Wall
Your Awesome Game
Key Questions
• How does it impact retention?
• How does it impact monetization?
• Any signs of cannibalization?
• What are the best practices?
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Angry Neeson
If Angry Neeson 52 watches an incentivized ad of Kate Upton, won’t
he get his revenge and switch to another strategy title?
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Impact on Retention: Players are unlikely to quit playing due to incentivized ad-watching
0%
50%
100%
No Video 1 5 10 15+
% M
onth
ly A
ctiv
e P
laye
rs
Engagement by Ad View
Avg. # of Ads Viewed/Day for active players
• Majority of heavy ad-watchers retains long term
0%
20%
40%
No Video 1 3 5 7
% M
onth
ly A
ctiv
e P
laye
rs
# of ad-consumption days in 1st week
• Frequency of ad consumption correlates well with long-term retention
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Impact on Monetization: Ad consumption surprisingly correlates well with IAPs
0%
50%
100%
No Video 1 5 10 15+
% I
AP
Pur
chas
e
Avg. # of Ads Viewed/Day
• Heavy ad-watchers are very likely to make IAP purchases
• Volume of ad consumption strongly correlates with IAP revenue
No Video 1 5 10 15+
Mon
thly
Rev
enue
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Ad Watchers are Price Sensitive
• Heavy ad-watchers tend to be more price sensitive and prefer to wait for IAP promotions to spend
• Targeting ad-watchers with the
right type of sales might lift LTV up
0%
20%
40%
60%
80%
100%
No Video 1 5 10 15+
% R
even
ue b
y IA
P S
ale
Pro
mot
ion
Avg. # of Ads Viewed/Day
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No cannibalization of direct revenue was observed
1.0 1.1 1.0
0.9 1.0
1.7
1.3 1.2
1.1 1.0
- Minnow Fish Dolphin Whale Super Whale
Rat
io o
f sp
endi
ng r
elat
ive
to n
on-a
d-vi
ewer
Spending Ratios by Spender Type
No Ads
Watched Ads Recently
• Introduced a new ad partner signficantly increasing the
availability of video ads to
players, hence increasing the
number of viewable ads/
earnable HC
• Spending per player went up for
ad viewers relative to non-
viewers for all spender groups
after more ad inventory was
available
Ratio of spending per active user for the 2 groups is “day-weighted”
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Higher Likelihood to convert into Spenders
• Willingness to view ads/do offers is
heavily influenced by the hidden variable
“how much the player likes the game” so
we need to control it
• Built logistic regression models for multiple
games across different genres.
• Players who interacted at least once
with ad content are almost twice as
likely to make an IAP purchase
Note: Ratio of spending per active user for the 2 groups is both “day-weighted” and “revenue-weighted”
Variables
Cohort Age
Engagement metrics (i.e. # of logins, level etc.)
Social Activities
Core game loop activities ( # of PvP, PvE, Building, Research etc)
A natural follow-up: Does performing ad viewing still predict spending
after adjusting for other engagement metrics?
No Ads At least 1 ad
% S
pend
er
Con
vers
ion
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Giving small amount of Hard Currency to players may boost retention and monetization
Open the chest to get small amount of HC
• Experience from indirect revenue – players that do offers retain and monetize better, even after controlling for engagement.
• Nothing special about offer experience; must be
driven by currency reward.
• Boom Beach includes mechanisms giving out small amounts of HC to
• Decrease the psychological barrier into spending HC
• Increase retention
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As a proof of concept, we decided to experiment with the idea; the results were astonishing
• Game team boosted up the FB connection
reward to 10x • Allow early users to engage with
wider range of game features • Bring in high quality users • Associate HC with the core game
economy.
Metrics for players who logged in at least once after tutorial
3-d ARPU 7-d ARPU 7-d Retention 3-d Retention
Before After
Δ = 6.3% 11.2% 28.7% 3.5%
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Concluding remarks
• Incentivized Ads do not negatively impact retenion
• Incentivized Ads do not cannibalize direct revenue from IAPs. In fact, they tend to help with spender conversion when used appropriately
• Having additional HC available early on allows players
to experience more of the core gameplay and view the currency as a normal part of gameplay; incentivized ads may be one way to offer HC
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Best Practices
Surfacing
Ad Inventory
Monetization
Currency Conversion
• Persistent and animated ad icons draw more attention, thus may raise ad CTR and CVR.
• Interstitials and banner ads are disruptive to game play and steals from immersiveness
• IAP Store offers a convenient location to offer “Free Gems”
• LTV > $0 is infinetely better than LTV = $0 • If cannibalization is real concern, heuristic filters like
“No ads for the first 14 days” can provide a solution
• Video ads do not pay much on eCPM basis. Try increasing the currency conversion rate in favor of video ads as high as 10x and observe how players react
• Highly engaged players with limited budgets are likely craving for Hard Currency; working with multiple video ads via mediation is highly recommended to meet the demand
• Product quality of Ad Network matters
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Thank you!
Dr. Volkan Ediz Director of Product, GREE Interna7onal
Special Thanks to Bysshe Easton Yang Hung John Tran
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WE ARE HIRING!