Stop Ignoring 98 Percent Of Your Audience! Best Practices for Monetizing Non-paying Users, Damon Marshall

STOP IGNORING 98%

OF YOUR AUDIENCE!

Damon Marshall VP of Business Development

Remember when…..

….we used to talk about ARPU?

But then a sea of animals started getting in the way of our total audience.

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So, we added a “P” to get ARPPU

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Monetization Strategy

Direct Payments

Ads

Here Are Some Facts

Web

“Only 1% - 5% of a social game’s audience purchase

virtual items.” - Casual Games Association; Social Network Games Report; 2012

Mobile

“The number of people that spend money on in-game items in free-to-play games ranges from 0.5% to 6%, depending on a game's quality and mechanics.”

- Flurry July 7, 2011

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Here Are Some Facts

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King.com’s advertising revenue from social games has increased tenfold over 2012 and currently accounts for 15% of total annual revenue.

- Inside Social Games, Nov. 12, 2012

Angry Birds reported between $1M-$6M per month of ad based revenue .

- Casual Games Sector Report: Mobile Games; 2012

Here Are Some Facts

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Casual Games Association; Social Network Games Report; 2012

Inside Network; Inside Social Gold; 2010

Popular Myths

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Advertising is going to f*ck up my game!

Ads take users out of the “experience”

I don’t want to cannibalize my paying users

The revenue is not meaningful enough

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Display Ads

Interstitials

“Achievement” Ads

Offerwall

Rewards-based Video

Advertising is going to f*ck up my game!

Chose the right ad product

Advertising is going to f*ck up my game!

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Avoid these pitfalls:

Interruption

Distraction, Annoyance

Wrong ad, not relevant

Clicking on ads by mistake while playing

Gamer feels exploited

Advertising is going to f*ck up my game!

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Interruption- No, it is opt-in

Distraction/Annoyance – subtle ad unit, not intrusive to gameplay

Wrong ad, not relevant: Mighty Pirates => The Pirates movie

Clicking on ads by mistake: Good Design

Gamer not feeling exploited

Rewarded for their actions

Ads take gamers out of the experience

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Ads act as “enablers” in the game

Users engage on their terms!

Ads can be a utility, a service in the game; similar to other utilities you create

Ads are “friends” of non-paying users

Be thoughtful….

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Be thoughtful….

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I Don’t Want To Cannibalize Paying Users

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Treat different users differently!

Example Datapoint: 95% of users who do not buy anything after playing for 30 days, never buy anything throughout their lifetime.

Time to treat them to a delicious ad!

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Increased engagement

Increased retention

Reduces churn

Increased traffic (word of mouth, friends start playing)

Increased ARPU (one “P”)

Increased conversion from non-paying to paying users

Remember, free players are essential to your game’s success, so keep them happy!

Integrating ads results in:

I Don’t Want To Cannibalize Paying Users

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The revenue is not meaningful enough

80% Re-booking rate

Increased spend after first buy

Audience engagement rates 3x as high as TV (IAB 2011)

Positive Brand Association

Post video view click rates are typically 15 - 30%

CPV is preferable to CPM

Advertisers love the social gaming audience!

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A well thought out ad strategy is yeilding $10,000+ a day for publishers

Branded video is yielding $.04 to $.06 CPV (Cost per view) which is equivalent to $40 to $60 CPM

Click through rates on this engagement are as high as 20%

Completion rates are 80%

Be strategic in selecting your ad network partners to achieve 100% fill rate.

The revenue is not meaningful enough

Facebook Examples

Toyota American Pie Pepsi

Ice Age Adidas Disney

Mobile Examples

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Gamer is presented

with ‘Free’ icon

User initiated Content

BrandConnect player

opens, presents

brand and video

User must watch

100% of the video

Once the video is

complete, CTA

message appears

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Concluding Slide

Games have become a new mass medium that is scalable and targeted for advertisers

Don’t “P” on your audience

Direct payments and ad monetization can live in harmony (not an “either/or”)

Be thoughtful about how you roll out your ad products – one size does NOT fit all

It’s happening!!! Brands and agencies are on board, and more are coming!

Thank you!