Although most people realize the value of social media marketing (in addition to paid social media performance advertising), few understand the subtleties of understanding how to measure its effectiveness. The secret is to measure engagement.
The relationship era
I was recently at a dinner with Doug Levy, the author of Can’t Buy Me Like, and Doug eloquently made the point that marketing has made a fundamental shift from persuading people to buy to creating trust in your product, and that is what persuades people to buy from you. The most successful marketers are ones who have the greatest expertise in gaining authentic relationships. Among those who have worked with and endorse Doug’s ideas are the CEOs of Whole Foods, Panera Bread and Patagonia, real companies that are highly profitable. Continue reading “The key to measuring the success of your social media marketing”
Many do not understand, or even accept, the motivation for people to spend real money for virtual goods. Some are even more amazed at the success of virtual casinos, where players gamble but can never collect their winnings. They discount it as manipulation or irrational thinking by the consumer. In fact, purchasing virtual goods is a very rational behavior consistent with how people conduct other aspects of their life. Understanding this motivation will help you develop a game that better satisfies your customers’ needs.
Why people shop
Although some people shop because they need something (food, clothing, steak), yet there are many other reasons people shop. In a seminal piece from the Journal of Marketing entitled “Why People Shop?“, Edward Tauber wrote that the obvious answer (“to purchase something”) “can be a most deceptive one and reflects a marketing myopia.” Below are several reasons that Tauber hypothesizes drive shopping behavior, which do not reflect ending up with a physical good. These reasons can also drive monetization in a game: Continue reading “Why would anyone buy a virtual good?”
An aspect of lifetime value that is often neglected but could mean the difference between the ability to advertise (or not), are the costs associated with your game (or product for those outside the gaming space). As I have discussed in detail in the first seven posts on customer lifetime value (LTV), your lifetime value has to exceed to cost per install of a new user (CPI) to justify advertising. The LTV is a formula incorporating retention, virality and monetization. The other areas, though, that you need to look at are costs that lower the revenue stream from the user. Continue reading “Lifetime Value Part 8: Incorporating costs and expenses in LTV”
One of the greatest mistake game companies make is building or launching products that are paid apps, not free-to-play (F2P), which then monetize through micro-transactions. Despite the fact that survey after survey shows F2P games generate more revenue than paid apps, virtually all the investment money goes to F2P products (and VCs are pretty intelligent) and most companies that abandon paid apps for F2P never go back, there are a surprisingly high number of companies still focusing on the paid app model. In particular, many mobile studios whose roots are in the traditional (console) gaming world still prefer the paid app model. As I am often asked to help game companies, it is very frustrating when they forgo my advice and build a paid app. The usual refrain is “But look at Angry Birds.”
A recent analysis by Forbes (“Rovio’s Revenue Crisis and the App Market Evolution”) shows beyond a shadow of a doubt it is just foolish to still be building paid apps, even if you are Rovio. To summarize the key analysis and findings from the Forbes data: Continue reading “Don’t charge for your app, PLEASE (at least if you want to make money)”
A recent article in the Harvard Business Review on Advertising Analytics 2.0 shows how advanced analytic tools and concepts can improve the return from your growth efforts. The article, written by Wes Nichols of MarketShare, shows how ad channels increasingly interact with each other and you can be much more effective by understanding these interactions. What you do in performance marketing, search ads, web, YouTube, TV and PR are not independent of each other. For example, a TV advertisement may increase Google searches that are then directed to your web game by purchasing ad words.
Advanced analytics allow you to understand these interdependencies and allocate accordingly. For example, one company found 85 percent of its budget went to TV ads and six percent to YouTube ads but the YouTube ads were nearly twice as effective at driving search. They then changed their allocation of ad dollars. This adjustment increased sales nine percent without incurring any additional advertising expense.
One of the keys to using analytics more effectively is understanding what data to collect. Many in the game industry think that tracking clicks on cost-per-click (CPC) campaigns, adding some consumer surveys, focus groups and last-click attribution is enough to optimize their marketing. It is not. Continue reading “Using analytics to optimize all of your advertising spend”
There’s a great blog post on GamesBrief on how to get your A/B testing efforts going. Given the importance of A/B testing to optimizing both your game’s performance and user acquisition, this is a must-read article if you are not already A/B testing.
To summarize the post (read the full post for a much deeper explanation of each point), the key point is that there are six steps to start successful A/B testing: Continue reading “How to implement A/B testing”