This article is part of a Gaming Insights series paid for by Facebook.
We spoke with executives from mobile game developers Kabam, Wildlife Studios, and global technology company AppLovin to better understand how they diversify their marketing strategies. Our discussion with these industry leaders focuses on what diversification means for their companies, how they’ve used Facebook to help grow their games efficiently and profitably, and what results they’ve seen.
Raphaela Melo (Facebook): Let’s kick things off broadly. For your organizations, what role does diversification play in your day-to-day marketing strategy?
Kay Wong-Alafriz (Kabam): Kabam utilizes ROAS (Return On Ad Spend) and LTV (Lifetime Value) delta as key indicators on how to shape the marketing strategy. Our team diversifies their media mix by finding the best opportunity in the marketplace. From a finance versus a marketing perspective, I would have questions around how much “control” the client has around the latest methods where client is only instructing a partner on a desired outcome ie. ROAS x% on D7. Since ROAS is the main objective, 90% of the optimization is focused on Value and ROAS optimization bid types through self-attributing channels such as Facebook, Google, Snap, or TikTok. Kabam’s team firmly believes in the importance of diversification to maximize performance, and will lean into business development and growth marketing opportunities to focus on the benefits of real-time learnings and direct application into our strategic partnership/channel negotiations.
For example, Kabam makes games that can be appealing for the APAC market, therefore the marketing strategy is focused on finding local partners, whether they are local/regional ad networks, publishers, or agencies to strengthen our networking and increase reach and drive.
Victor Lambertucci (Wildlife Studios): Diversification plays a key role in our responsibilities. Being able to compete simultaneously in all available markets while maximizing performance in each of them is the bread and butter of our business, so we always try to reach every possible user in the most fitting manner, which takes a lot of experimentation and diversification.
Jerome Turnbull (AppLovin): Diversification is central to our marketing strategy. In a few short years, we have evolved to become a global technology platform that fuels mobile developers’ growth and brings mobile experiences to market. Along the way, AppLovin has developed strategic partnerships with mobile game studios around the world that create immersive content across a variety of genres. This gives our media buyers the ability to pivot and shift budgets when competition is high.
As a result, we have the opportunity to market a wide portfolio of game genres that employ different monetization models. For example, casual games skew heavy towards ad monetization whereas word puzzle and match-3 games employ a hybrid approach. And midcore and strategy games focus heavily on in-app purchases (IAP). These monetization types dictate the different buying optimizations media buyers use in the app ecosystem. App Install Optimization is still a viable strategy for casual games with high daily active users (DAU) and ad revenue. App Event Optimization tends to perform well for hybrid model games, whereas Value or Return on Ad Spend (ROAS) Optimization does well for IAP games. This mix allows the media buyers to shift focus and budgets to different pockets of traffic targeted by these different optimization algorithms.
RM: Your business targets will dictate key performance indicators and the strategy to achieve those. Are there marketing investments you make that don’t show short term results but pay off in the long run? For example, do you ever seek to acquire high-retention players who may not make in-app purchases but produce value in other ways?
KWA: Kabam has focused on brand driven marketing initiatives that may be challenging to measure direct ROI. Initiatives can include influencer marketing campaigns, social media boosts, and pre-registration for new title launches. Kabam with new titles in its pipeline will consider a portfolio of traditional and non-traditional techniques, benefitting from its learnings with Netmarble.
VL: Our objective is to maximize the profit we generate, so we are always very mindful of our investments and their profitability. That being said, we believe constantly testing new strategies is the best way to maximize long term results, despite the fact that those experiments will often result in short-term losses. The knowledge we build through experimentation is important to keep us constantly moving forward as a company.
As for the user value example, every person who downloads your app ends up generating value in some way, so we believe it is important to account for all of those factors when thinking about acquisition. The example mentioned is a good representation, as those users will generate ad revenue.
JT: Most of us are acquiring users with a break-even time frame of 6 to 12 months, but media buyers need to make decisions within a few days. While ROAS is the key performance indicator in some cases, it can be volatile in high average revenue per paying user (ARPPU) games. In those cases, identifying other engagement metrics like cost per engaged purchaser can help.
For hybrid model games, it’s important to have secondary metrics such as retention, level progression, and playtime. If you have good ROAS, but a horrible retention rate from a traffic source, it’s unlikely you’ll be able to break even with your ad revenue. There’s also value in acquiring non-paying active users if your game is highly social and community driven. Through social interactions, competition, and teamwork, these players will drive the purchasing behavior of your payers.
RM: In your view, is diversifying your marketing a feature to defend your business or to go on offense and innovate?
KWA: I believe it’s more the latter and that’s why Kabam started developing different types of games with different IPs.
VL: It certainly works both ways, but diversification tends to be something we strive for in order to reach new highs and learn new things, so I would probably favor the second option.
JT: It’s both. If you’re a first mover to a new strategy, then it’s innovative but it also comes with risk. If you’re late to the party, then it’s defensive. This space is changing rapidly so there is great value in being on the offense and experimenting with new strategies. This could mean revisiting some older strategies and making small changes to them. This past quarter, I saw marketers invest heavily into some buying strategies and new ad products, but then become overexposed.
RM: Facebook provides a variety of ad solutions to help reach and acquire new players for your games. What have you found is the best way to leverage Facebook for your marketing?
KWA: Value-based optimization and minimum-ROAS bidding have been successful in enhancing the capabilities of worldwide targeting especially for geos where the reach is limited and LTVs are lower. Lookalike audiences and/or broad no targeting have also shown some success. Leveraging a consistent and aligned platform for creatives as a key driver of conversions is something that Kabam has continued to invest in.
VL: Recently the ROAS product has definitely been the most important one, with AEO and MAI (mobile app install) campaigns losing scale in comparison. We still believe these optimization goals can be profitable, but on a smaller scale and with more selective targeting.
JT: With its new ad products each year, Facebook has driven innovation in the mobile market. New products usually work well for first movers. After wide adoption, it becomes more difficult to make them work as well.
One of the best ways to leverage Facebook in your marketing strategy is to consolidate signals in their system. This results in fewer campaigns and ad sets, making it easier to manage and optimize your campaigns. If you’re looking to diversify your strategy further, leaning more on the buying algorithms and employing looser targeting can also be effective.
RM: Before we end, can you share tips on diversifying your marketing bets that may have led to a spirited debate with peers? Maybe it’s how you structure your marketing teams for success (using channel experts vs generalists) or what your appetite is for experiential marketing tactics (such as out-of-home or unique partnerships with other brands).
KWA: There is not a “one size fits all” mandate especially in our quest to diversify with realistic constraints on resources and budgets while striving for reach and return. One possible avenue is to evaluate the effectiveness of “regionally specialized teams of channel experts.”
VL: New initiatives and experimental marketing tactics should be optimizing towards rigorous learning not ROI. If you put too much pressure on your team to deliver on revenue or new users targets, they will tend to prioritize incremental improvements in your existing channels instead of bold new bets.
Set up a budget for testing, define the key questions the team has to answer at the end of the learning period and let them run their experiments with rigor not speed. Even if the initiative does not yield financial results, celebrate the wrong bet and spread the learnings that came from it.
JT: I’ve seen it work both ways, it just depends on the situation. Prior to AppLovin’s acquisition of Machine Zone, Machine Zone built a team of channel experts that predominantly marketed only one title at a time. It was highly successful and made Game of War: Fire Age and Mobile Strike two of the highest grossing mobile games of all time. Machine Zone also explored many experiential marketing tactics like Super Bowl commercials because it had maximized all the value from performance-based advertising and was looking for incremental gains.
On the other hand, AppLovin takes a more generalist approach — which has also been highly successful. Because of its diverse portfolio of games, media buyers work across multiple games and are able to shift focus and plug into opportunities quickly.
No matter what approach you pursue, it’s important to consider the costs of different marketing tactics. There is time and effort with each additional traffic source that should be taken into account in your ROAS targets.
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Facebook diversified marketing strategy uses a combination of optimization, audience targeting, and ad placement solutions that drive short- and long-term performance. By executing a diversified strategy, game developers can help increase player base and overall user engagement while driving ROAS. For more information, visit the Diversified Marketing Strategies section of the Facebook Gaming Webinar Hub.
BIOS
Raphaela Melo, Client Partner at Facebook (Moderator)
Rapha is a Senior Client Partner on the Facebook Global Gaming team supporting some of the largest gaming developers in the world. Rapha has nearly 10 years of experience in the mobile gaming space, with over five years at Facebook. She is also a strong voice in the Women in Gaming and Diversity & Inclusion initiatives at Facebook.
Kay Wong-Alafriz, CPA, CA, CFE, ICD.D — Chief Finance Officer at Kabam Games, Inc.
Kay Wong-Alafriz is an experienced, high-integrity strategic partner bringing a broad array of Finance and Operations experience to bear in helping public and private companies achieve corporate objectives. She serves as the CFO, and Head of User Acquisition (2017 to 2020), Data Science & Analytics, Legal & Compliance, and Asset Infrastructure teams at Kabam, Inc., a subsidiary of Netmarble Corporation. Kay is passionate about championing a collaborative, operational approach for the finance function that leverages technology and data to drive decision making. She is responsible for financial and operational leadership post-acquisition and to help set Kabam on a strong footing for continued growth. Kay’s expertise includes corporate development and financing, international and cross-border expertise, regulatory and compliance, operations and risk management. She is also an experienced board member, skilled in the dynamics of both private and publicly listed companies.
Victor Lambertucci, VP of Growth at Wildlife Studios
Victor holds a degree in Electronics Engineering from the University of São Paulo. Before Wildlife, Victor built a career in Performance Marketing in other startups, as Marketing Director for ride-hailing start-up Easy Taxi (in Brazil and Colombia) and later as Head of Marketing at Nubank. At Wildlife, Victor leads one of the most data-driven digital marketing operations in Latin America and helped the studio reach over two billion downloads worldwide since its foundation.
Jerome Turnbull, Director of Growth at AppLovin
Jerome Turnbull is the Director of Growth at AppLovin where he helps fuel user acquisition and ad monetization for the games made by AppLovin’s partner studios. He works with a talented team of media buyers and analysts across a wide portfolio of game and monetization types. Before AppLovin’s acquisition of Machine Zone, Jerome was part of the team that launched top grossing hits like Game of War, Mobile Strike, and FFXV: A New Empire. He’s an avid runner and enjoys the beautiful world of aquascaping.
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