User Acquisition for Mobile Games on Facebook

How to go from good to great when marketing your game

NEXT LEVELFACEBOOK APP MARKETING

Table of ContentsIntroduction ...............................................................................................................2

Why Facebook should be part of your app marketing strategy .......... 4

Study: How Facebook stacks up vs. other media sources .................... 5

But can you do better? ....................................................................................... 7

How to get maximum performance on Facebook ................................... 8

Tools to maximize benefit from Facebook .................................................. 13

Case studies ........................................................................................................... 18 Driving volume and ROI – action/simulation game ............................................................. 19

Driving sustained user growth – sports simulation game ............................................... 20

Driving volume and visibility – puzzle game .......................................................................... 21

Test your mobile game with Fiksu for better results .............................. 22

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IntroductionFacebook has become a leading traffic source for mobile game marketers. For most games, Facebook mobile app ads are the most productive way to acquire high quality, transaction- oriented players.

While most marketers see successful initial results with Facebook, increasing scale and maintaining momentum over longer periods can be a challenge. Marketers need help to:

• Ramp up volume while maintaining sustainable player acquisition costs

• Maintain performance, avoid saturation, and keep campaigns relevant for their target audience

With initial successes, marketers may not realize that by applying the right tools they can achieve additional volume and cost efficiencies. Unfortunately, there is no easy way for marketers to validate if their campaigns are reaching their full potential.

In addition, Facebook has almost limitless ways to segment audiences and optimize ad buying. Leveraging those capabilities, however, can be complex. Finding a partner with deep mobile ad technology and expertise can help marketers get to the next level of performance.

As the industry’s largest mobile app marketing platform, Fiksu has a unique view on the performance of different media sources. Fiksu is a Facebook Ads API partner with mobile measurement access, and provides both programmatic buying and mobile measurement for Facebook mobile app ads. Fiksu also works with hundreds of leading mobile ad networks, real time bidding exchanges, and social media channels, and has generated over 2.2 billion app downloads to date.

In this report, we’ve used Fiksu’s unique vantage point to share:

Results from a study of a sample of 8 million mobile game downloads comparing Facebook performance to non-incent ad network and DSP alternatives.

Tips on how to generate performance improvements of 30% or more on Facebook, even with campaigns that are already optimized.

Three mobile game case studies illustrating how Facebook can impact rank and visibility and cost effectively generate high quality players in volume.

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Why Facebook should be part of your app marketing strategyMany game marketers have found Facebook to be a valuable source of new users. It’s easy to understand why:

Reach Facebook reaches over 1 billion mobile users. That makes it one of the largest channels available for user acquisition.

Volume With the right tools and tactics, you can generate unprecedented volumes of high quality users.

Long Term Value Facebook’s highly granular segmentation and targeting tools let you reach players with the unique characteristics and interests that make them a fit for your game.

If you’re a game developer, you’ve probably tried marketing on Facebook, either on your own or through a marketing partner.

If you haven’t, you should. Facebook can help you accomplish a variety of player acquisition goals, frequently more cost effectively than other sources. And with the right tools, you can sustain performance over time and reach even higher levels of performance.

About Fiksu Fiksu is the leading programmatic mobile app marketing platform:

• Used by 40 of the top 50 grossing apps in 2013

• Over 1200 successful burst campaigns

• Over 2.2 billion mobile app installs generated worldwide

• Works with all leading mobile ad networks and real-time bidding exchanges

Fiksu Facebook IntegrationFiksu is a Facebook Ads API partner with advanced technology for:

• Programmatic media buying and optimization

• Mobile measurement

Other UsersFacebook Users

WW Smartphone and Tablet Users

51%

49%

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Source: eMarketer, Fiksu estimates

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Study: How Facebook stacks up vs. other media sourcesFiksu studied the performance of Facebook mobile app install ads versus non-incent networks for marketing mobile games.

The study was based on a sample of 8 million downloads for 124 mobile game marketing campaigns using Facebook and alternate media sources.

Results The analysis shows that Facebook delivers conversions and purchasing users at significantly higher rates. Cost per purchasing user, a key ROI metric, is significantly lower than other mobile media sources. It’s important to note that for raw media costs, Facebook is not the cheapest source: it is significantly more expensive on a cost per click basis than many ad networks. However, it is clearly the most productive source for generating ROI.

Facebook is not the cheapest source. However, it is clearly the most productive non-incent source for generating ROI.

Methodology: sample based on 8 million downloads from cross section of game campaigns. Media sources compared: non-incent banner networks, non-incent video networks and real time bidding exchanges. Measurement: conversions were measured based on users clicking on an ad, downloading and opening the app. No view-through conversions were included. 5

Cost per Click

Conversion Rate

PurchasingRate

Cost perPurchasing

UserOver

Higher

Improvement Improvement Improvement

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But can you do better?Facebook can drive improved results, but as with other ad platforms, game marketers can encounter challenges when trying to grow and maintain their campaigns. These include:

• Getting volume: most game marketers find they can run smaller campaigns successfully, but see costs rise when scaling up.

• Maintaining momentum: Facebook can initially deliver users cost effectively, but campaigns can saturate, so sustaining performance over time can be difficult.

• Getting high-value users: obtaining downloads is important, but only if they result in users who take actions that drive profits. The best way to accomplish this is to measure in-app events such as purchases, and to understand the associated audiences and targeting variables. Putting this data to use, however, requires that you measure these events and have the analytical tools to optimize at a detailed campaign level.

• Using Facebook tools to best advantage: the Facebook ad platform provides a seemingly infinite number of ways to reach users. Identifying the most productive segments and optimizing campaigns is much easier with programmatic tools that facilitate data-driven decisions.

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How to get maximum performance on Facebook There are numerous ways to improve performance on Facebook. Some key questions to consider include:

How granular should your campaigns be?The more granular your targeting, the better your results. There is a trade-off, however, between finding the best-performing combinations and the effort to test and identify them. Consider the variables in play:

• How many attributes are you using for targeting? (Demographics, interests, device types?)

• Are you layering in advanced Facebook capabilities such as custom audiences and lookalikes?

• How many different combinations of those attributes are you testing?

• How many geographies are you targeting?

In typical scenarios, combinations of demographic attributes, device types, geographies, and interests can quickly reach the hundreds or thousands. Adding in variants for creatives, text copy, and custom audiences can push this to hundreds of thousands or even millions of testing combinations.

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Example: The campaign shown above, which uses simple demographic information along with interests, very quickly becomes 1000 discrete campaigns.

In a real-world example, Fiksu identified 3.6 million potential campaign variants in a large international campaign for a hidden object game. Fiksu tested thousands of variants, including combinations of 10 demographic segments, 200+ interest targets, and 6 custom audiences. These were iterated for multiple geographies and combined with over 300 text and creative variants, including local language versions. Optimization algorithms quickly narrowed the target audience down to approximately 3,000 high success campaigns in 11 different geographies.

2 Genders

5 Age Groups

10 Interests

5 Geographies

2 Platforms

1000 Discrete Campaigns

Male

5 Ag

e Gr

oups

10 In

tere

sts

5 Ge

ogra

phie

s

2 Pl

atfo

rms

2 Ge

nder

Female

15-20

21-25

26-30

31-35

36-40

15-20

21-25

26-30

31-35

36-40

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Can you segment your user base to intelligently create custom and lookalike audiences? Facebook can help you reach an audience with attributes similar to your current users. This helps you find more users like those who monetize best, and is a great way to expand your audience and generate additional volume. Combining lookalike audiences with demographic and other attributes is also a great way to generate granular campaigns that yield superior performance.

Are you bidding and budgeting to achieve the lowest cost possible? Finding the right audience can make your campaigns successful, but only if you can acquire those users at the right cost.

LTV: Each campaign can have its own productivity dynamics and goals. In addition, each campaign may address an audience with a different long term value. For example, you should be willing to pay more to reach a segment where player long term value is $40, versus one with a value of $10. The $10 segment still has value, but only if acquisition costs are in line with that lower value.

Media cost variability: Media costs can fluctuate significantly. Fiksu has seen variances up to 300% for a single campaign — in one recent campaign, CPM varied between $3.80 and $9.90. Unless you are monitoring costs continuously, you may find you are spending more or less than desired.

Avoiding saturation: In addition, campaigns can saturate their audience, leading to reduced performance over time. Attention to detail and the ability to react quickly can make a big difference: Fiksu has seen performance improvements of 20% or more simply by managing budgets more effectively.

To get optimal results, then, you’ll want to manage bids and budgets at a detailed ad set level. Unless you can value each segment and make appropriate economic decisions, you may filter out profitable users or pay excessively for unprofitable ones.

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Example: Fiksu recently improved performance for a card battleling app by creating hundreds of lookalike audiences combined with other targeting criteria. By systematically combining multiple tactics with lookalike audiences, overall CPI was reduced by 60%.

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How are you employing the different bidding methods? • CPM (cost per thousand impressions) gives you the widest pool of users but may be costly

if your campaigns are not successful in identifying the correct users.

• CPC (cost per click) narrows to those likely to click on your ad.

• CPA (cost per action) finds those most likely to download, but may limit your volume. It also can’t be used unless you’ve previously run CPM campaigns.

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How often are you testing and refreshing creatives and text copy? Creatives: Creatives need to be switched out regularly to avoid creative fatigue. For large-scale campaigns with many targeting combinations, this can be a significant task to manage.

There’s no hard rule for how often to refresh creatives: some campaigns may need refreshing in days. Others may be productive for as long as a month or more. Make sure you’re monitoring performance to detect saturation. That way, you can take action before it becomes a drag on your ROI.

Text copy: Optimizing the copy on your mobile app ads can also have significant impact on conversions. Fiksu has seen changes in CPI up to 40% simply by optimizing copy.

LTV: How are you optimizing for purchase events and downstream metrics?Are you able to optimize your campaign on the metrics that drive your business, such as in app purchases or registrations? Optimizing on these metrics is a key driver of ROI.

In order to do so, you need an SDK that is able to track these metrics via Facebook and feed this data back into your segmentation and media optimization strategy.

Are you re-engaging users?It’s a fact of life that players can lose interest in a game and become dormant. Facebook’s retargeting capability lets you remind players to visit your game. Use it to promote major updates, special events like game tournaments, or special offers.

Players can be re-acquired for a fraction of the cost of a new acquisition, so this should be an integral part of an overall marketing strategy.

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Example In a recent Facebook campaign for a sports/simulation game, 5 sets of copy were manipulated, identifying one set of 2 variants that yielded a CPI improvement of 34%.

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Tools to maximize benefit from FacebookAs discussed, taking performance to the next level on Facebook requires the ability to manage tens of thousands of combinations of audience segmentation criteria, and constant monitoring of bids, budgets and campaign results. Keeping up with campaigns can be a significant effort.

Using manual methods doesn’t take advantage of the full range of tools available to improve performance. It also means that changes in conditions, such as campaigns that are saturating, may go undetected until they have a significant impact on cost.

Programmatic buying and campaign management with Facebook APIs: The key to getting the best performance is to automate the processes of segmentation, creative testing, optimization and campaign management. Facebook offers APIs that allow marketing integrators to do just that. Using these APIs, Fiksu has developed an extensive range of tools to enable programmatic management of all of these key processes – all in concert with one another.

While any one of these tools can improve results, systematic use of the full suite takes maximum advantage of Facebook’s segmentation and audience management capabilities. Fiksu’s clients who have employed this strategy have:

• reduced mobile app ad costs up to 60% • increased volume by 2X or more while maintaining costs within target ranges

These technologies and tools include: Micro targeting and bulk campaign management: Generally, the more granular

and personalized an ad campaign is, the more effective it will be. Intelligent tools that can evaluate large numbers of audience segments and test them efficiently are key to driving top performance.

Fiksu’s campaign management system automatically generates and tests thousands of granular audience targeting combinations, using dozens of variables as shown below.

Audience segmentation criteria used by Fiksu programmatic algorithms

Demographics Countries, regions, cities, zip, radius, locales, gender, age

Education Education status, college networks, college majors, work networks, college years

Relationship status, interested in

OS version, user device (brand), wireless carrier

Broad interests and behaviors

Lookalikes, phone numbers, email addresses, IDs

Relationships

Device

Behaviors & Interests

Custom Audiences 13

The diagram below shows an example of how programmatic bidding and budgeting lowered CPI by 22%.

On the left: an example of Facebook campaigns managed with manual bidding. The width of each line represents the percentage of spend being allocated to a particular campaign

On the right: the same campaigns once real time bidding and budgeting were enabled. Fiksu technology automatically balances budgets and bids for maximum value. Spending varies depending on the productivity of each targeting combination, ad rates, and expected results for the various targets. Using this technology, CPI fell to $0.74, a reduction of 22%.

Programmatic budgeting and bidding: As noted, achieving the best results also depends on making the right budgeting and bidding decisions. There is a constant balance between conversion rates, the value of a particular type of user, and the cost of an ad.

Fiksu’s intelligent bidding system provides the ability to test large numbers of targeting combinations in real time, and dynamically adjusts bids and budgets to maximize ROI. This is particularly helpful in preventing saturation. As a particular strategy’s performance drops, budget is reallocated to more productive campaigns.

22% reduction in CPI from managing budgets and bidding in real time.

How real-time programmatic bidding improves performance

Static bidding and budgeting - CPI $0.95

Real time dynamic bidding - CPI $0.74

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The bar graph on the bottom shows the volume of traffic purchased. As CPMs drop, purchasing volume increases to take advantage of the price fluctuations.

Scaling campaigns while keeping costs within target ranges can be a challenge on any ad platform. Because Fiksu can access Facebook data in real time, optimization decisions can be made and implemented instantly.

The chart below shows the relationship between CPM, CPI, and volume of ads purchased. You can see that CPM rates, in orange, fluctuate significantly. Despite this, CPI, in blue, stays within a relatively small range.

To get the best results, use real-time bidding and budgeting to take advantage of changing ad rates.

How real-time programmatic bidding scales campaigns

Fluctuating CPM

Algorithms increase buying when cost is lowest

Programmatic control keeps CPI within desired range

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Measurement: Fiksu’s lightweight, mobile-first SDK tracks conversions and links audience segment data to monetization and LTV events. Fiksu’s optimization and measurement systems are integrated, enabling immediate response to changing market conditions.

LTV/Loyal Users: In addition to managing targeting, bidding and budgeting, Fiksu also tracks key monetization metrics and optimizes spend to maximize long term value. Measuring in-app purchase events and feeding this back to your media buying strategy is one of the most critical things you can do to improve your ROI and reduce wasted downloads. Campaigns leveraging this capability have seen ARPUs (average revenue per user) at scale up to 40% greater than alternate sources.

Fiksu’s SDK leverages Facebook’s mobile measurement capabilities and links monetization events to the optimization process.1

Interest Exploration Tools: Facebook is unique on mobile as it allows you to segment audiences by interests and behaviors. For example, you can reach people who are interested in golf, music, or thousands of other subjects. As a first step, simply targeting an interest can boost performance. With the right tools, you can use this capability to get even better performance and increase volume significantly.

There are often statistical correlations between interests that can help target additional users. Some of these correlations can be non-intuitive, so it takes content mining tools to identify new high value audiences. Fiksu uses a statistical correlation tool that evaluates large numbers of these relationships to identify better segmentation strategies.

1 For more information on the optimizing on monetization events and how it affects your ROI, see Fiksu’s ebook: “How to Acquire Loyal App Users ”

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Example Fiksu recently achieved a return on ad spend of over 65% for a fighting game by combining multiple segmentation tactics with LTV optimization.

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The MummyReturns Zombie

Walk

The ZombieSurvival

Guide

Dawn of theDead

The Mummy

The MummyReturns

2012(movie)

TerminatorSalvation

The Witcher(video game)

Ghost

TheAmericans

Breaking Bad

Homeland

The Killing

Revolution

Grimm

Justified

Falling Skies

The Shield

Fringe

Supernatural

Vampire

Ghoul

Zombie

Zombie(fictional)

Apocalypse

Xbox One

Obstacle course

Stampede

Moroi

Folklore

Slayer

King’sBounty

PhilosophicalZombie

The Walking

Dead

Undead

Zombieland

Zombie

<1,000,000

Audience Size

1,000,000 - 10,000,000

10,000,000 - 100,000,000

>100,000,000

How Fiksu Interest Explorer expands your audienceIn this example, an exploration of zombie-related terms uncovered additional key words such as “Undead,” “Zombieland” and “Xbox One.” These in aggregate expanded the potential audience from 76 million to 846 million - an 11-fold increase.

Engagement and retargeting: Retargeting is a great way to reactivate players and promote game events. It is typically most effective with specific groups of users, so Fiksu offers tools that help you segment based on player usage frequency, in app behavior, purchase habits, etc. These can be combined with Facebook’s vast array of segmentation capabilities to develop very specific audiences and relevant calls to action that maximize performance. For example, one Fiksu client recently ran Facebook retargeting campaigns and found that the cost to reactivate was one-third that of a new user acquisition.

Diagram is a subset of a larger search

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These case studies illustrate how with the right infrastructure Facebook can be used effectively to achieve common goals of game marketers:

• Generate quality users in volume

• Sustain profitable campaigns over long periods of time

• Generate sufficient volume to support burst campaigns

Facebook Case Studies

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Driving Volume and ROI Action/Simulation Game

Goal

Results

TacticsDrive player volume at low cost per loyal user and generate ROI - positive downloads.

Tested and implemented Facebook campaigns to generate strong player response and low CPIs. Supplemented with other media sources.

• Segmented based on engagement metrics of heavy users

• Developed a series of high-quality lookalike audiences

• Implemented interest targeting using Fiksu interest correlation tools and demographics

Sample criteria: – Males in a select age brackets – Interested in beer and action movies

• Began campaign with a burst strategy

– Facebook drove more than 50% of installs

• Optimized on creative, interests, lookalike audiences, and LTV

Cost per install

Cost per loyal/returning user

Average revenue per user

Return on advertising spend

$0.78, as low as $0.65 for select segments

$1.43, as low as $1.02 for select segments

$1.72

0ver 60%

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Driving Sustained User Growth Sports Simulation Game

Goal

Results

TacticsDrive steady stream of new players at low CPIs in multiple countries over an extended period of time.

Used Facebook exclusively for a long-term campaign (over 100 days).• Applied Fiksu interest correlation tools to identify a series of interests

and audiences most likely to be receptive to this app• Tested a series of lookalike audiences based on prior marketing

experience • Segmented audience based on combination of demographics

and interests – Selected sports (tennis, skiing) – Luxury goods, high end autos, other criteria• Managed budgeting and targeting with Fiksu automated technology

to optimize for low CPIs

Conversions

Conversions per day

Conversion rate

Cost per install

Over 500,000

Average of 4,000 per day, peaking at over 11,000

40-55%

$0.76; as low as $0.49 in a key US segment

CPMs fluctuated by as much as 300%. Despite this, CPI was held within desired range

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Driving Volume and Visibility Puzzle Game

Goal

Results

TacticsAcquire over 300,000 quality non-incent players in one week in 19 countries.

Leveraged 24 different non-incent sources to drive high quality players, including Facebook as a key source: it drove the largest number of installs worldwide.

• Generated hundreds of discrete micro-segments

• Targeted unique interests, demographics, and lookalikes

• Continuously managed bids and budgets and dynamically allocated media spend to the most productive segments

Volume

Rank

Cost per install

Average revenue per user Return on advertising spend

Exceeded client goals in three days Drove 141% of volume goal (460,000 conversions) Drove top 5 rank in several Asian markets and top 25 and 30 in several major markets, including the US

Below $2 – 22% less than client goal. Segments as low $0.77 Over $3.50

Over 50%

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Test Your Mobile Game with Fiksu for Better ResultsEffective marketing means testing out alternate strategies to identify the best performers.

If you are not marketing your game on Facebook: Consider running test campaigns on Facebook to take advantage of high quality targeted audiences at a highly effective cost per purchasing user.

If you are already marketing your game with Facebook: You may in fact have the opportunity to significantly reduce your costs and increase your volume.

One tactic used to validate performance is to benchmark against a high performance platform. Results will yield some combination of three valuable outcomes:

1. Confirmation of peak performance.

2. Opportunity to reduce player acquisition costs.

3. Opportunity to accelerate growth.

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Running campaigns with programmatic infrastructure designed to leverage the full range of Facebook’s capabilities can identify new audiences and increase ROI. With Facebook’s vast reach and large volume of active users, you can run many campaigns using different approaches and still generate industry-leading performance. We’ve seen app developers successfully run as many as three sets of campaigns in parallel.

As a mobile-first company with advanced infrastructure for programmatic management of Facebook campaigns, Fiksu excels in driving mobile app installs and reaching the best users at the lowest cost.

The prospects for improving marketing performance on Facebook are significant, both for new titles and for games already being marketed on Facebook.

Fiksu can help you establish, validate, and improve the performance of your mobile game marketing on Facebook. To learn more, contact us.

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Copyright © 2014 Fiksu. All rights reserved. Fiksu, the Fiksu logo, and FreeMyApps are registered trademarks of Fiksu, Inc. All other trademarks mentioned herein are the property of their respective holders.

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APAC

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EMEA

Fiksu is used by 40 of the 50 highest-grossing game publishers to achieve exceptional app marketing results:

• 60 percent reduction in media costs

• 300 percent increase in loyal user acquisition

• Over 2.2 billion downloads generated to date

Clients that use Fiksu