An introduction to mobile user acquisition

Nailing the mobile games scene is all about grabbing users' attention, getting them excited to download your mobile game, and ensuring they have a great time playing it. However, as a mobile game developer, you might find yourself at a crossroads when it comes to executing user acquisition campaigns. This could involve establishing an in-house user acquisition team within your studio, leveraging the expertise of a mobile marketing agency, or collaborating with a mobile game publisher.

Each approach has its own advantages and disadvantages, and the choice depends on your specific goals and resources. So, let's conduct a complex review of all three methods and examine the pros and cons of each.

Exploring the responsibilities of user acquisition teams

Before comparing different approaches to UA, let's discuss the work of a mobile marketing team in the gaming industry and how it operates.

Setting the goals of the UA department starts with the product. Specifically, we are talking about understanding the game's objectives and KPIs, which then will shape the marketing strategy.

UA managers need not only to know the game and its audience but also to have a solid grasp of project monetization

For instance, if a game aims to make $100 million in a year, the company sets annual objectives based on this target. The UA team then sets sub-goals, calculating marketing spend, and ROI to achieve this overarching target.

The main tasks include optimizing advertising campaigns and analyzing channels to minimize costs while maximizing profit. However, achieving this isn't as simple as setting up a few campaigns and gradually spending the advertising budget.

Understanding how traffic source algorithms work is crucial, as is knowing when to adjust bids to improve performance metrics and when to replace creatives in a campaign or decide to pause it. Determining when to scale campaigns and when to cut the bid is essential. Essentially, the UA team's success relies on the synergy of all these factors.

In addition to launching and optimizing campaigns, the UA department's tasks also include strategic planning, analyzing historical data, communicating with advertising platforms, managing emergencies in purchasing (like correcting a sharp CPI increase in a launched campaign), and much more.

For effective traffic purchasing, UA managers need not only to know the game and its audience but also to have a solid grasp of project monetization. Understanding user behavior in the game on the various days after install, and how they spend on in-app purchases, is important for effectively launching and managing UA campaigns. This insight influences both campaign setup and further management.

In the broadest sense, in mobile game marketing, the key formula is LTV > CPI (lifetime value > cost-per-install). Although greatly simplified and encompassing many nuances, it is still a primary guideline for many marketers. For example, in many publishers, some divisions like the monetization team predominantly work on increasing LTV, while others, such as the UA department, strive to lower CPI. This approach is valid, but the best results are only achieved through synergy – when the whole company works together to solve problems and help each other develop success.

Now, let's look at how UA works in in-house teams, agencies, and publishers and explore the pros/cons of each approach.

In-house user acquisition team

• Pros

No need to share revenue: Having an in-house UA team is a significant advantage once you've grown to the scale of mobile developers like Playrix and Nexters. With the stability and a large amount of resources at your disposal, you can build and maintain your marketing by yourself. You know your game better than anyone else and can manage your traffic buying using only your team without the need to share revenues.

Project knowledge: The primary benefit of an in-house UA team is their close connection to the game. This proximity allows them to suggest project updates based on traffic buying results. They can recommend strategies to the monetization team for enhancing the game, thereby increasing user motivation and improving the performance of UA campaigns.

Long-term investment: Building your own UA team, along with tuning analytics and creative production capabilities is an investment not just in your current game but also in your future projects. This lays the groundwork for sustained growth and development of your studio.

• Cons

Costs: Establishing an in-house UA team means investing in everything yourself, from direct marketing spend and creative production to hiring and training personnel. Marketing budgets for mobile games can be substantial, often five to ten times higher than the project's development costs. You must plan such financial commitment in advance.

Providing necessary resources: To maximize the efficiency of your in-house UA department, it's crucial to equip your team with essential marketing and product analytics tools, such as AppsFlyer, Tableau, or Amplitude. Additionally, you'll need to handle communications with ad networks, manage the co-investment process, and oversee the production and localization of creatives. This process requires time, money, and expertise.

Limited expertise in traffic sources: Typically, when establishing an in-house UA department, a manager is sometimes hired with the expectation of handling everything at once. This often involves initially driving traffic through two or three of the largest sources. Then, if UA achieves certain profit levels, there's a chance to expand the team and explore new traffic sources. This approach can be challenging as the manager may lack the necessary time and focus to grasp all the nuances involved quickly.

Performance marketing agency

• Pros

Accumulated experience from various clients: Agencies work with dozens of projects simultaneously, and good agencies have a large portfolio of clients from various game genres and categories. Consequently, UA managers at agencies have a broader perspective in managing advertising campaigns and working with creatives.

Expertise in specific strategies and sources: Large mobile game developers often engage performance marketing agencies for specific expertise. This includes areas like SKAN traffic or web-to-app conversions, where the developer may lack internal know-how.

Territory-specific expertise: Hiring a local agency can be beneficial if you need specialized knowledge in acquiring traffic from specific geographical regions.

Creative production: Agencies not only create ad creatives but also have the capability to produce complex formats like Playable ads and UGC-like creatives.

• Cons

Commission: Agencies invariably charge a fee for their services.

Less in-depth game knowledge: Typically, agencies cannot immerse themselves in your project as deeply as an in-house team or a publisher might. This limitation is often due to agencies being external teams handling multiple clients simultaneously.

Longer decision-making process: Engaging with an agency usually means navigating a more extended decision-making process. This can involve additional time for aligning strategies, making adjustments, and obtaining necessary approvals. Such extended timelines can delay the response to market changes or evolving needs of your game.

Need for an established marketing department: Effective collaboration with an agency requires having your own marketing department and understanding essential marketing metrics to set KPIs and assess the agency's performance. Additionally, it's important to have connected traffic analytics tools and a quality Mobile Measurement Partner (MMP) like AppsFlyer or Adjust. Agencies may be limited in assisting you if these elements aren't in place.

Mobile game publisher

• Pros

Comprehensive in-house immersion combined with agency-level expertise: Publishers offer a dedicated producer who essentially becomes an integral part of your team while working on your project. This producer deeply understands the game and focuses solely on its improvement, effectively translating the vision to both the marketing team and the developer.

Expertise in advertising platforms: Publishing companies often have substantial resources, allowing the user acquisition team to be divided into specialized groups focusing on different sources, such as paid social, ad networks, and programmatic advertising.

Large amount of resources: Publishers typically can produce a lot of creatives per project, a volume that in-house UA departments can't often afford.

Addressing the cash gap: Publishers also finance advertising campaigns. This is crucial for many developers, especially when development funds have been exhausted, and no budget is left for marketing. Effective game promotion is vital for achieving substantial volumes of traffic and revenue, particularly in the first year of a game's existence.

Business development advantages: Large publishers typically have established contacts with managers of stores, ad networks, agencies, and other contractors. Publishers may also cover other aspects, including monetization, product development, community management, technical support.

• Cons

Revenue sharing: The most obvious disadvantage is the need to share profits, with the developer typically giving away 30 to 80% of the game's revenue. Ideally, this is offset by the publisher increasing the game's overall profit, but this arrangement can result in significant revenue loss if the project doesn't experience growth.

Dependency: Dependency on a publisher can become problematic, especially if they decide to discontinue support for the game. This would not only mean losing out on creative inputs and traffic but also potentially losing paying users, leading to a drop in revenue.

Contractual limitations: Publisher contracts are often long-term and might not include provisions for early termination under mutual compliance. This implies that dissatisfaction with a publisher, even if they haven't breached the contract, doesn't necessarily allow for an easy exit from the agreement.

Assessing both the potential benefits and the drawbacks is crucial in determining if this path aligns with your long-term objectives and vision for your game

Reputational risks: Associating with a publisher that has a questionable reputation or engages in controversial actions can have adverse effects on the reputation of both your game and your development studio.

Diminished developer focus and control: When a game is transferred to a publisher's account, there's a tendency for the publisher to receive most of the attention. This often leaves players thinking that the game belongs to the publisher, with the actual developers pushed to the background. Partnering with a publisher also generally results in less control over various aspects of your game. This includes decisions regarding services and traffic sources, the types of creatives used, and the overall manner in which your game is marketed and presented.

These factors highlight the importance of thorough consideration and careful evaluation before entering into a publishing agreement. Assessing both the potential benefits and the drawbacks is crucial in determining if this path aligns with your long-term objectives and vision for your game.

To figure out your next move, ask yourself these questions: what are your goals, and where do you see your project in two to three years? What milestones are you aiming for? How much do you want to earn, and are you ready to invest time and money?

Take your time and think carefully about the answers to all these questions, as they may significantly affect the future of your project.

Vladislav Samarin is the head of user acquisition at AppQuantum. He boasts over ten years of experience in the video game industry.

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