Tag: advertising

Using analytics to optimize all of your advertising spend

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.

Advertising analytics 2.0One 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”

Lifetime Value Part 7: The importance of segments and cohorts to LTV

In previous posts, I discussed the importance of customer lifetime value (LTV), its key elements (monetization, retention and virality) and how to calculate LTV; but it is important to also understand that there is not a monolithic LTV for your game (or product). You may remember that the practical value of LTV is to use it as a metric to determine whether or not an ad spend has a positive return. If the LTV is higher than the cost per install (CPI), it is profitable to advertise (and vice versa).

process from cybaea.net

The key to success, though, is understanding the LTV of the customer you will be acquiring as opposed to the general LTV for the game. Some low cost user acquisition channels may bring in players who are effectively worthless (they leave your game right after they click on the ad) even in a game that has a high overall LTV, so understanding the lifetime value of these users would save you from wasting your money. Conversely, there may be a very expensive advertising channel that brings in great players who all monetize well and have a much higher lifetime value than their CPI.

There are four factors that you should use to calculate separate LTVs (and in different combinations): Continue reading “Lifetime Value Part 7: The importance of segments and cohorts to LTV”