What games can teach everyone about user acquisition

SAN FRANCISCO — Acquiring high-quality users is the problem that every successful app maker runs into. And then converting those folk from free to paid is the next challenge. Few industries have met this challenge better than games, and within games, publisher Kabam is one of the mobile leaders.

At VentureBeat’s GrowthBeat conference in a session that DominateFund’s Ben Parr moderated, Kabam marketer Kimberly Pointer offered some tips about user acquisition that can help just about any company. And her fellow panelist and marketing partner, Scott Brinker of marketer Ion Interactive, also passed on advice about the insights that games can give to the larger community of app makers, and in turn give them a better chance at success in mobile.

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With app stores clogged with a couple of million apps, competition is getting so fierce that in many cases, the cost of acquiring a user is exceeding the value you can get from that individual. Smart companies are hiring user-acquisition experts to help design better strategies.

VentureBeat did its own user acquisition survey covering 230 developers, and they voted on what solutions for user acquisition they liked. The rankings that came out, in order, were Google, Facebook, ChartBoost, AdColony, Flurry, Tapjoy, YouTube, Twitter, NativeX, and Playhaven.

Kabam, coming off a recent funding round of $120 million from Alibaba and a new game announcement yesterday, has embraced constant testing as part of its culture. Pointer said the company will freely engage in a wide variety of marketing campaigns that are mere tests of ideas. She said the company doesn’t mind if those tests are failures, because they ultimately help the company nail down the right messages to get across to the right users in campaigns that really work.

One of the tips is that the first landing page for a game should really matter. It should be considered like the first stop in a multistep experience that leads a player seamlessly into an app, said Brinker.

And that landing page experience matters so much that you can add multiple steps to it. That’s not intuitive, as most experts advise companies to reduce the number of clicks that it takes to get a user into a product. But in games, you can actually see an improvement with better landing pages, even if there are multiple clicks involved.

“The relevancy and engagement of the click is what matters, not just fewer steps,” Brinker said.

“You benefit from adding this at the beginning of the funnel,” Pointer said.

And if you make the creative material as good as the game, the handoff from marketing to the game can be good.

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“There is a handshake, sometimes not always friendly,” Pointer said.

Pointer said that Kabam pays attention to key metrics like average revenue per user, seven-day retention, and conversion. To deliver that data, it often requires multiple marketing and ad tech products and systems.

“We often do a lot of tests for campaigns and introduce only the winners into the larger campaigns,” Pointer said.

Kabam seeks users far and wide, creating a funnel of users. For that, Kabam has to stomach high CPI (cost per install) advertising and low conversion rates (to paid players) at the beginning as it tests the market, Pointer said. That’s harder as it adapts titles from other markets, such as Asia, to see how they will fare in the U.S. market.

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Lots of users try out a free-to-play game, but fewer stick around after the first experience. And relatively small percentages of hardcore fans stay long enough to consider buying virtual goods inside the game. That conversion from free to paid is what Kabam focuses closely on, Pointer said. To get that conversion, companies have to do a lot of A/B testing.

Other key metrics tell you about the kinds of users that wind up sticking around and paying. Kabam experiments with a lot of different sources of traffic. For that, is uses automated marketing tools, but it also needs the capability to dig into the data to do its tests.

“We scale as revenue scales, and then we automate what makes sense to automate,” Pointer said. “You might have a hit or you might not have one. We stay pretty lean, but scale up when we have a hit.”

Pointer often needs to know exactly which creative advertising really works at drawing in the users, particularly the ones that are willing to pay.

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“A talented creative director will get you far,” Pointer said. “That’s often undervalued, as you can’t do much without it.”

To often, there’s a big mismatch between the production value of an advertisement and the production value of the game.

“If you look at Kabam’s landing pages, you see high production values that make people feel like they are already starting the experience” inside the ad, Brinker said.

Above all, Pointer said that focusing on conversion is what really pays off.

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