Join top execs from Ketchapp, Smule and Vungle as they explore their most successful strategies for acquiring and building mobile audiences during a panel at Casual Connect USA. The panelists which included Zain Jaffer, CEO of Vungle, examined how they each use data to plan and optimize their user acquisition campaigns. They talked about how in-app video plays an increasingly larger part in marketing in the games industry. If your focus is on user acquisition and increasing the LTV of your users, tune in on this discussion.
Zain Jaffer is the CEO of Vungle. They describe their workdays as being varied, having to deal with customers, employees, investors, partners and the press. While Zain is sometimes working on resolving challenges in the office working on goals and other days where they’re going to numerous meetings.
“There isn’t as much time for me these days to think creatively and come up with new ideas and ways to solve the complex challenges facing the industry and beyond,” they note. “I get most of that time now from when I have to travel. When you’re sitting in a plane for 5-15 hours, I really take advantage of those moments to think.”
Zain makes an effort to know everyone who works at Vungle and interviews every candidate that joins the Vungle team. Zain likes getting to know the future employees’ stories that led them to where they are now. Zain encourages an open culture at Vungle where colleagues are also friends.
“I love seeing Vungle grow and watching the impact we’re making. As our company continues to scale, our deal sizes have grown exponentially. We have millions of dollars in advertising money flowing through Vungle,” they said. “And witnessing the amount of uplift we can achieve for our customers through our creative and LTV optimization products is an incredible feeling. It’s amazing to know that the internal products we develop and release can not only significantly move the needle for our customer’s toward their UA and monetization goals, but also positively affect the industry and performance marketers as a whole.”
It’s a challenge as an involved CEO to find the balance between delegating and executing. Zain notes that if one delegates too much, it’s easy to become out of touch with your customers and employees. On the other hand, if an executive micromanages they might not be able to keep their company as agile as it needs to be.
“You need to always make sure you have the best people around you and trust in them to deliver,” Zain notes. “In many ways you need to be a coach and you have to get good at making sure you understand what people need when you meet with them and knowing your role in that interaction. I have a tendency to be very action-oriented, so I’m always looking for solutions when I hear a problem. But sometimes that’s not what’s needed. It’s a challenge, however it’s one that can be overcome by having introspection and asking yourself the right questions in that moment. When you’re meeting with a person, are you there to make a decision, are you there to brainstorm, coach, give a different perspective, or are you there just to listen and be a sympathetic ear?”
Learning from Web 1.0
Zain’s experience includes time running a few start-ups and, as early as 2003, building their own websites. After gaining some money from the banner ads on the sites, they saw the potential in both advertisers reaching new clients and for websites to support themselves with ads. Unfortunately, the ad experience back then was less than stellar and Zain gained ideas of what could be done to change and improve it, which set Zain up with what they do today in improving ad tech and improving it.
“I was also spending a lot of money on my own ads to promote my website. And I lost so much money from that experience,” Zain detailed. “The whole thing felt like a scam. There was little in place to prevent click fraud, you couldn’t get any insight into the types of traffic you were driving to your site, it was really hard to know where and how your ads were being placed, it was just a really bad experience all around, whether you were an advertiser or a publisher. You’d put money in as an advertiser to run ads and it would just disappear into a vacuum, you wouldn’t really know what result, if any, you’d get from your ad spend. It felt like you had better odds just going to casino and betting on red.”
Zain saw this as a problem and resolved to change it. They wanted to provide measurable and accountable performance marketing, which is what Vungle provides today. “By making the advertising system transparent and optimizing targeting so that you’d be able to hone in on high LTV users while also optimizing creatives to leverage video and the interactivity of mobile, it was a recipe for something big,” they said, “Something that would not only change how advertising worked, but also make it better and more effective for everyone involved. Those early experiences trying to navigate a terrible advertising environment is what inspired Vungle’s creation.”
Targeting the Five Percenters
While the majority of app revenue comes from in-app purchases, only about five percent of users make any in-app purchases at all. These five percent of users drive billions of dollars in revenue to mobile game developers. Because of this, engaging, acquiring and retaining these high-LTV users is the key to long-term growth.
“Our vision statement as a business is to deliver high-value users through engaging video ads,” detailed Zain. “That means users that are going to spend money inside your application. These high-LTV users are the exact audience we help game developers and publishers reach. Video is the secret sauce to doing that. Our advertisers want high value and they want volume. We’re able to ensure every dollar the advertiser spends results in an ROI-positive outcome.”
Video is a primary way to acquire these high-LTV users, using tailored messages to detail why the games are worth playing. Video is a good way to captures a users attention and with sophisticated ad targeting, it can help ensure the right users see a video ad at the right time, helping the app become more popular and financially solvent.
“In addition, those same publishers and developers can also open up ad space, in the form of rewarded placement and interstitials, in their own games to earn ad revenue,” Zain noted. “That’s incredibly powerful as well, because it provides a reliable and lucrative stream of cash they can use to continuing growing their business.”
The Importance of High-LTV Users
As noted above, the five percent of users that make in-app purchases drive the majority of app revenue. Because of that, it’s important to focus not just on having many users for some mobile games, but having the high-quality users. These high-LTV users drive long-term growth.
“There are a lot of ad networks that can deliver installs for almost any price. But if those users don’t stick around in a game and delete it soon after installing, what’s the point of bringing in that user? It’d just be a waste of advertising budget,” says Zain. “Getting premium high-LTV users is what will actually help a mobile game company grow. It’s also important to note that high-value users aren’t just those that pay, but it’s also users will who engage with a mobile game as a part of their day. These are users that will help your app grow organically and give you insights into how to iterate and improve going forward.”
It’s not terribly difficult to spend money acquiring a large amount of users for a mobile app. However, if those users aren’t the right demographic they won’t find the app relevant or use it. If that’s the case, those users won’t recommend it to people they know or spend money on it, making acquiring those users superfluous.
“Developers and publishers need to focus on attracting high lifetime-value (LTV) users,” said Zain. “They should invest in figuring out where their target consumers are spending most of their time in mobile and how to get their ads in front of them. These are the consumers who will grow your revenue and expand your user base. Optimizing to bring in high LTV users can cost more, but they also deliver the most ROI.”
The delivery method of in-app ads is important as well. The video ads need to be integrated in a way that compliments the overall experience and delivers value to users. Timing and having ads that give rewards will result in a better user experience and more ad revenue. As such, it’s important to work with ad partners to ensure that only relevant content is shown to an app’s audience.
Mobile Becoming a Primary Ad Platform
When it comes to smaller companies addressing monetization issues, Zain suggests that they make sure they have a scaling infrastructure. Analytics, attribution and economic models should all be able to expand organically. While user acquisition is important, money is usually tight for a smaller developer, so maximizing the money sent is a crucial move. Being able to measure the performance of ads is crucial, so it’s paramount to understand advertising channels and the performance they provide.
Moving forward, Zain sees more brands using mobile as a primary marketing channel and performance marketing will be a huge part of pushing that in different ad networks. “The traditional monetization model works like this: A user downloads a mobile game, plays it and eventually the goal for most publishers is that those users will buy something in the game,” they said. “But the things they buy are all virtual items, they’re not real. However, those same users need to buy real things, like food, clothes, travel accommodations, flights, services, etc. Now if a publisher is able to tap into those users who are looking to make those kinds of transactions and help drive them to it, they’d be able to take a cut of those transactions. Because for an advertiser, whether they’re a big brand or a more narrowly focused company, their ultimate goal is to get a measurable return from their ad spend. If they invest a dollar in advertising, they should be able to get more than a dollar back. And in the future, every advertiser is going to adopt performance goals with how they approach their campaigns.”
“As long as they get a measurable return on their ad investment, whether it’s a user that buys a virtual power-up or a books a flight to Maui, the way opportunities for mobile publishers and developers to partake in that revenue will expand,” they continued. “So in a sense, the way monetization will evolve will also largely be influenced by how advertisers grow, and vice versa.”
The Future of Performance Marketing Strategy
What Vungle offers helps advertisers and publishers across a variety of genres all across the world. The key is matching the right users to the right apps, and that can help anything succeed. Once the right users are matched with the right product, then there’s a good chance that something can become popular on the Vungle network.
“The proudest moment was the first time I got a call from a Vungle customer saying that they were making so much money through our network that they were able to quit their jobs,” Vain notes. “I remember them telling me how much they hated their day jobs and how they didn’t think that the app they built as a side project now earns enough money for them to turn it into a real business that they can spend full-time building. It’s an incredible feeling made all the more powerful by them telling us that it was because of Vungle that helped get them there and it’s humbling to know they have enough confidence in Vungle and the results we deliver to them to make that leap. And the best part is that these moments happens a lot more often now as we continue to grow. But the frequency of these events never diminish the feeling I get from hearing about them.”
Going forward, Zain sees a larger focus on optimizing ad creatives, innovating new ad formats and types, and combining them to drive more high-LTV users. “Performance marketing strategy is going to be the primary way advertisers will be engaging with their audiences. They’ll be running campaigns and looking for measurable return on ad spend. There’s a going to be a huge focus on machine learning, with quality ad network improving the way they automate the process for optimizing creatives to drive high LTV users,” concluded Zain.
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