In episode 1 of LevelUp, game industry veteran, Jeff Gurian, VP Ad Monetization and Marketing at leading game publisher Kongregate, speaks about all things related to game monetization and marketing, and how the two loop together, including the future of user acquisition and whether or not we’re going to see more major game companies invest in TV.

Read on for edited highlights from Gurian’s podcast:

The evolving game monetization-marketing loop

“While a lot of companies keep monetization and marketing departments siloed, they really do go hand in hand. UA needs to know what the eCPM’s are because that affects what the ARPDAU is for ads, and that affects the LTVs, especially in games that are ad driven. If UA doesn’t know how much the value of ads has increased, then they don’t know how they can increase their bids accordingly. It’s something that needs to be an active conversation. Not something that they go ‘wow, our user value went up the past three weeks. Maybe we can increase our bids now.’ It should be something that should be done in real time.”

“At Kongregate, our [combined] monetization-marketing approach has helped give our UA team perspective on what our CPMs are and how competitive they are in the marketplace. If we’re primarily buying on a CPI basis, the amount of inventory we get is dependent on the CPMs that are being driven within the apps we’re buying from. That’s imperative because if the UA team doesn’t know what those CPMs are, they don’t know how much they really need to move the needle to get more volume.”

“A lot of companies keep monetization and marketing siloed since the disciplines and information and data between them are interrelated but are not completely dependent on one another. As long as there is a dialogue between the individual groups, I think that they can function separately, but effective communication is key.”

How UA differs across games

“At Kongregate, we have different strategies depending on the game. Sometimes we simply do indirect payback, meaning that we want every dollar we spend to make a dollar back. While for other titles, we may take a more aggressive approach to UA, since paid UA and scale also drive organics. We often try to find the balance point of volume in a particular title and a particular price point, while still seeing if we can nudge the price point up a little bit. We look at UA factors holistically.”

Will brand marketers going in-app make the UA space more competitive?

“From a monetization perspective, hopefully, brands will better utilize rewarded video. It’s unclear if CPMs are on par with performance yet, but if brands can figure out how to turn product views into a video, they become more valuable to brand advertisers, which could in turn challenge mobile acquisition as there would be fewer ads for mobile advertisers to compete on.”

Mobile’s impact on game design

“Mobile’s impact on game design has been good and bad. The bad news is that because the market for UA has become more aggressive, it’s forced developers to focus on data and monetization, pushing a lot of smaller devs into working with publishers. On the flip side, developers are learning to build high-quality games that aren’t just ‘fun’ but also monetize well. The ecosystem is forcing the hands of developers to get better at designing games, retaining users, and monetizing their in-app economies. When Kongregate is evaluating titles, there are two major criteria. One – is the game featurable? Meaning will Apple and Google like the mechanics and the art? And two – is there an option to do paid UA? These are both essential in a title in order to scale and find real success.”

The future of TV for game marketers

“At the end of the day, TV can work [for game marketers], but to get there it requires a pretty big investment. You have to test a number of things, ranging from time of day, channel targeting, geos, etc. You also need to have a good base line of installs to see if TV is in fact providing a lift. For example, buying one commercial does nothing, you have to buy a series of them over time before you see any results. For TV’s potential to really work requires a minimum fee of $100,000 (but more realistically $200,000 – $400,000). So is it better to invest that money in TV which is semi questionable? Or to put that money into performance marketing which provides exact and immediate insights?”

The benefits of rewarded video for UA

“Rewarded videos provide qualifying data about the user, as anyone who comes across this ad-type is likely to be playing a game, and is therefore a gamer. This allows advertisers to target their audience effectively.”

The right way to use rewarded ads inside your in-app economy

“At Kongregate we divorce ad placements from IAPs to avoid gold farming. Otherwise people continuously watch ads to get currency, without being incentivized to buy hard currency. Gold farming is also not ideal because when users watch subsequent ads, CPMs begin to decline. If people are watching five ads to get currency, the first ad is far more valuable than the second which is far more valuable than the third, and then by the time they reach the fifth ad, developers are actually making less money while still giving away the same amount of currency. At Kongregate we put added bonuses around things like speedups, timer reductions, bonuses, etc. but never tie the features directly to hard currency in order to avoid gold farming. The only ad placement that does tie to currency is the offer wall.”

What can we expect to see from the gaming space the next 5 years?

“Over the next five years, AR and VR will take their appropriate places in the tech ecosystem. AR, which is essentially an enhancement of existing technologies, will most likely become very prevalent in the mobile gaming space, whereas VR lends itself more to the console and in home entertainment systems. Additionally, video ads and programmatic mediation will continue evolving and structuring the mobile gaming space.”

Listen to the full gaming podcast .
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