The Hi-Rez Expo in Atlanta is a fine way to start 2018. I am here to witness the world championships and underscore G2A’s support for such a fantastic publisher and one we are very proud to have a direct relationship with. When G2A Direct was conceived Hi-Rez was one of only three developers working directly with G2A. I am pleased to say that now not only do we still work with Hi-Rez but also with over two hundred other developers who use G2A’s marketplace platform to sell and distribute their games.
The truth of G2A Direct is a long way from some of the far-out stories that have appeared in the past. In fact, most Developers are incredibly surprised about how it works once they start engaging with the platform. Like Hi-Rez and two hundred other developers have discovered, as it happens G2A is a really effective and low-cost customer acquisition platform. Who would have thought?
In this article, I wanted to provide an overview of the current landscape of options available to acquire new users for new games – or even crafting campaigns for a second cycle.
I will talk about engagement, acquisition and conversion. Each is a very different metric, but simply put - engagement is a type of attention, acquisition is a user redeeming your invite code and conversion is a cost, usually calculated by dividing your marketing spend by the number of users acquired by a campaign action.
Over the many years spent in the games industry I have come up with a basic model that seems to work very well when trying to craft a campaign. I have three basic touch points that I am trying to hit to deliver the outcome I am looking for.
Firstly, lets outline the principals of this process. To get any consumer in a position where they are able to make a positive or negative decision as to whether or not they are going to become a user of your product, there needs to be a minimum of three engagements:
- The first engagement is simply to ‘discover’ the product offering. The consumer can only make a purchasing decision if they know the product exists.
- The second engagement, the consumer must see the product in context, or what I call “exploration”. This is where they understand what it does and what is the value proposition of the product.
- The third engagement must be the ‘recommendation’ either by a first degree or third-degree connection. This is the reinforcement of either the positive or negative impression the first engagement made.
Only when these three engagements are satisfied can a consumer make a positive or negative decision about whether or not to purchase or to use your product (or game in this case). It’s not necessary that the engagements follow the absolute order of above. For example, the recommendation could also be the first view of the product, but essentially there will still need to be at least another two engagements after the first for the circle to close.
So how do you, as a games developer, get there? What are paths you can follow to satisfy these engagements and allow a potential customer to make a decision whether or not they want to have a relationship with you?
This is going to satisfy at least point i) or perhaps point ii) if you get them onto your product page. The cost of that engagement may be negligible given that there is a certain amount of discovery built into the release process. The conversion, or acquisition cost, should a purchase be made, is covered in a basic retail agreement. With Steam it's usually 70/30 when it comes to revenue. Therefore, the cost of acquiring those users will be at the 30% of your retail. For the sake of argument let’s just call it 9.99 – therefore your direct cost of acquisition on Steam is around 2.99 plus any indirect cost incurred from marketing activities. Other retail channels are out there and should be considered to deliver your title to as many eyes as possible but Steam is clearly the most important given it’s the activation platform.
This is where it starts to get really interesting when it comes to satisfying the three engagements. The tactical approach will always vary depending on the type of product but the rules still apply.
Above the Line
If your fortunate enough to have a solid marketing budget you are most likely going to put some of into above the line activities, at least in the biggest markets. There are a lot of noise surrounding the lack of ability to quantify your above the line spends on advertising in general but the fact is that it does have a place, and if it can be incorporated into the campaign - it absolutely should be. It can often deliver that first engagement to a mass audience very quickly.
Most likely however, if you are dependent on transactions more so than independently wealthy - you are likely going to want to focus a lot of your energy on performance marketing. These are marketing activities where you can monitor results. An activity that will deliver a conversion and a way of measuring the conversion cost.
Now that’s of course different to cost of engagement but it’s going to deliver a facet of the engagement in the amount of impressions and it’s also going to deliver conversions.
Now I am not going to say the only game in town is Google but let’s face it – Bing is not going to deliver the volumes the same way Google can and if you only have limited resources you are likely going to focus your energy there. Social media and Facebook is good performance but we will get to Social soon.
Getting a conversion from a PPC campaign however can be an expensive process dependant on your ability to build and manage campaigns in Google Adwords, and importantly the cost of key words that your bidding - so it’s really hard to say what the cost of customer acquisition via programmatic is going to be. Personally, I have found it to be anywhere from $8.00 to $2.00 per customer acquisition on an average basket of $14.00. My first ever attempt delivered a conversion of near $20.00 on a $30.00 basket which was very bad.
So, although programmatic is a very good way of knowing exactly what the campaign result outcome was, there is a massive variance in the cost of the conversion based on your budget, length of campaign and cost of bid words.
Social media is still a very powerful tool in the marketing mix and can deliver nearly all of the engagements needed and described in the Discover, Explore and Recommend model. It also can deliver the conversion and therefore a measurable matrix.
The cost of social media makes it a very attractive medium for developers and the value of the eyeballs and attention it can get you is still relatively cost effective when compared to any other mediums. It would be personally my first choice as the most important medium.
There are many things you can do on social media from streaming, to blog to video and all of them should be exploited to the fullest to push your other methods of engagement to deliver a better conversion rate.
There is probably an entire article that could be written about social media activities that also include Youtube and Twitch as platforms for influencers that can increase engagement – though I will leave that for another time.
Bundling and Secondary Markets.
I am going to place these two channels together because they are very much interlinked. The growth of services like Humble Bundle and Marketplaces like G2A are very much in lockstep because each is dependent on the other for some part of the value proposition.
Again, these channels are important because they deliver engagement and they deliver conversion – but not at a cost, they deliver conversion with income that offsets the cost of marketing and engagement on other platforms.
I have had people argue with me that bundling and OEM is a sales channel and as a sales channel they should be able to enforce what happens in those channels but really, if you are transacting at a radically reduced rate (discount off the SRP) then you are carrying out a marketing engagement. It was designed to deliver engagement and users who realise it or not, predominately satisfy the very important part of the sales process - that is the “Recommendation”.
The reality is to deliver the Recommendation component of the Marketing Mix you need users. We can’t rely on media and press anymore simply due to the volume of games being released, so the most effective and cost-efficient way to do it is through a bundle.
But bundle doesn’t always equal user - equals happy user and subsequent recommendation. As a consumer, any bundle I look at I do so in terms of what in my current collection of games. If there are any games in that bundle that I already have in my collection, its value would be decreased unless there was a way I could recycle that game and redeem some value for that item I already have. Marketplaces allow this to happen. The consumer can sell what he doesn’t want or need and purchase another game that he does want.
Many developers feel helpless in this scenario and often bristle at it but it’s really important to understand that the developer who has sold his game to the bundling or OEM party – gets the same outcome – a user acquisition and hopefully a subsequent user recommendation.
I have had developers take offence that people are making money from the resale of their bundled games, but fail to see that with the buying and re-selling of their games they now have increased the size of their sales team and potential engagements across the secondary market. You can share the cost of opportunity with Google or an 18-year-old Uni student in Arkansas.
The argument for ruined pricing is also a difficult one. Many developers complain about low prices on marketplace only to be reminded of a deal they did on istheranydeal.com. Yes, internet doesn’t forget. But again, for the purposes of ‘Discover’ and acquiring a user who will deliver revenue over the game lifecycle with in game purchases or expansions – the user is acquired regardless.
The Bottom Line
The bottom line is with marketplaces and the secondary market - it’s a very cost effective, if not income positive, way of acquiring users and engagement that satisfies Discovery and delivers potential Recommendations.
A good solid marketing campaign that delivers the Discover, Explore and Recommend engagements takes into account all of the above the line, below the line and channel marketing opportunities and crafts a balance to achieve an outcome that sets up a game or property for growth.
I have personally seen some very good examples of companies that have been able to achieve amazing results with very modest budgets leveraging every channel available to them to deliver the engagements needed to grow users and subsequent income.
The Discover, Explore and Recommend model is far more complex than three simple sentences, but in essence that’s what’s at its true core. Three simple contacts with your prospective customer and then a binary decision YES/NO.
It’s a good place to start in 2018!