The Truth About User Acquisition

More games and apps than ever are entering the mobile market: One million+ just for Apple’s iOS and Google Play isn’t far behind with over 700,000. Great content is still central to a game’s success, but now being “discovered” is also a major challenge. Visibility counts, so developers who want to monetize their IP are looking at new ways to attract users – even if they must pay.

“I can’t ignore the fact that the odds of me getting a game in the Top 20 – on any of the charts in any of these major mobile platforms – is very, very near zero if I don’t do paid user acquisition,” said Spry Fox’s David Edery at  the Design, Innovate, Communicate, Entertain (D.I.C.E.) Summit in February. While the CEO of Triple Town developer thinks paid user acquisition is increasingly unavoidable, it has become controversial as well. A recent VentureBeat article noted that costs are rising, up 21% this past December according to mobile app marketing firm Fiksu.

How to Buy Users

Any method used to gain users, such as marketing and advertising, can be called “user acquisition.” But buying them (people, that is, as opposed to bots) doesn’t mean paying a user to download your game. Instead it refers to ways that “acquire” users – such as pay-per-install, which encourages people to get another app through incentives (in-game currency or virtual goods, for example), pay-per-click advertising, or cross-promotion with other developers through networks like Chartboost. Typically, they’re deployed near the app’s launch to boost users quickly, hopefully cracking the Top 20.

Companies like Tapjoy made headlines in 2011 when Apple reportedly banned pay-per-install apps for violating its developer license agreement. Such incentivized installs artificially rocketed apps to the top of App Store rankings, giving them highly coveted store visibility. And while incentivized installs aren’t officially banned, Apple’s license agreement says devs that “manipulate or cheat the user reviews or chart rankings” will be banned from the App Store.

Delivering a good game goes a long way towards increasing user loyalty to your company and future products. On the other hand, buying users to enhance download numbers can’t guarantee those coveted lifetime fans.

As EEDAR’s Jesse Divnich pointed out at Interactive Ontario’s GameON: Finance this past January, more than 50% of in-app purchases occur within the first 60 minutes of playing. Also, 60% of players make up their minds about future engagement in the first 10 minutes. The key lesson for game and app developers: you may attract lots of attention through advertising and user acquisition, but no one’s going to spend money on the game if your app is not interesting and engaging right away.

The Long View

Successful companies like Halfbrick Studios (Fruit NinjaJetpack Joyride) have built a gamer base of hundreds of millions. This lets them avoid user acquisition expenses by cross-promoting within their own networks. For new entrants with dollar signs in their eyes, Halfbrick stresses the need to have good games first. As chief marketing officer Phil Larsen said at D.I.C.E., “building a great product is way higher on the priority list.”

Spry Fox’s Edery is concerned about the “arms race” of paid user acquisition. “The only way you’re going to beat the clones is if you’re spending more on user acquisition,” he said, admitting at D.I.C.E. that his company is looking into it. He believes most top-grossing and free games depend on substantial user acquisition and cross-promotional methods.

Paid user acquisition may not go away anytime soon. Still, for smaller game developers, whether veteran or new, solid, original games are a better long-term investment no matter how many customers they pay for. Lifetime users – otherwise known as loyal fans – are something money can’t buy.

LEAVE A REPLY

Please enter your comment!
Please enter your name here