Specialist
VP at Tripledot Studios Ltd
Agenda
- Operating environments for Zynga (NASDAQ: ZNGA), Applovin (NASDAQ: APP) and others – IDFA (Identifier for Advertisers) impact to user growth, customer acquisition costs and revenue growth trajectory
- Value proposition of key marketing channels pre- and post-IDFA changes
- Mitigation efforts – Zynga's Adjust and Chartboost acquisitions and contextual advertising efforts
- Outlook for Q1 2022 and beyond – industry winners, losers and potential wildcards
Questions
1.
There is a lot happening in the mobile gaming sector and anyone indexed to mobile applications has been monitoring the IDFA [Identifier for Advertisers] deprecation since 2020. How had that pre-existing system been working for mobile game developers? How did IDFA play into acquiring users and driving in-game monetisation once those users were within a mobile game portfolio?
2.
You mentioned that there was a split between complete and incomplete identification methods. How prominent were those incomplete methods prior to the shift from opt-out to opt-in? While IDFA was still available, how likely was a developer such as Zynga to try to track users itself, or even utilise DSPs [demand-side platforms] to design campaigns and receive intel for them?
3.
User acquisition seems to be a big driver of developers’ revenue trajectory, given how churn-prone the mobile gamers are. Could you estimate industry churn rate standards across hyper-casual, casual and mid-core games? Mobile developers like to talk about one-day, seven-day and 30-day retention curves, so that varies a lot by game type. How high had churn been even prior to some of the targeting issues that we’re discussing?
4.
Would you say that the IDFA deprecation had a material impact on game genres’ churn profiles? Alternatively, will it be much more the other KPIs around the lifetime value as it relates to ARPUs or the CAC [customer acquisition cost]?
5.
Is there a big delta between user acquisition dollars spent on brand-new users and re-engaged ones? Were re-engaged users a certain mix of the marketing budget and it’s much lower, therefore inflating the costs that a mobile developer spends in any given year on tech?
6.
You mentioned the switch from opt-out to opt-in impacted the number of users that an IDFA was available, claiming it was 70-80%. In our previous Interview, you noted the importance of the need for opt-ins, not just on Zynga or FarmVille, but also Facebook to get true opt-in and availability to target that customer. Is that 70-80% opted out a metric when considering that you don’t just need it on the publisher but also some of these networks you use, or is it opt-in even more dauntingly low when considering the two?
7.
You referenced the incomplete ways through which you can get to an identifier could probably consist of fingerprinting or probabilistic attribution. Would you characterise those methods as widely used now that the IDFA has been deprecated?
8.
I presume that there are different signals allowing the fingerprinting method to be efficient. What are the variations of that, such as IP addresses for companies such as AppLovin, ironSource and Unity? Unity even has gamer IDs to many of the mobile games that it’s developed. Have you noticed any other signals getting uptick and usage to track users now that we can’t rely on the IDFA?
9.
You mentioned there’s not significant concern in the industry that Apple might increase its enforcement of disallowing many of these methods. How long-lasting might that be? Could the driver of Apple not enforcing be an active function of how collaborative Google has been with its developers vs Apple? Could Apple be trying to avoid developer churn now but might enforce more frequently later? Alternatively, are these methods simply so off-server that Apple doesn’t have line of sight and will never be able to enforce these alternative methods?
10.
The probabilistic attribution could be considered a bit more contextual, where you’re getting a lot but not all the way there. Have there been dilutive effects on lifetime value or CAC when considering these methods relative to what ROIthe IDFA historically? Is there just an inherent dampening of the lifetime value of the customers coming in through these methods, or maybe it’s similar lifetime value but a higher CAC?
11.
What user mix shifts do you think occurred on end device type? Pre-IDFA, was iOS driving a vast majority of the user mix, and that’s getting closer to 50/50 when compared to Android? How significant has that shift to Android been, given the budget shifts?
12.
Is it safe to say that there are many more Android phones vs iOS? Does this mean a potential shift in budget to focus on Android also comes with an acceleration in user growth? What tactic changes driven by IDFA might have impacted the pace at which users came into mobile portfolios?
13.
Do you find there are campaign design methods that can specifically pursue very high-intent gamers in the sense that the lifetime value-to-CAC ratio becomes much more important, and you care more about 40-90-day retention rates? Is there a way to get those and not have very low-value gamers coming into the mix, where their user acquisition budgets are much more about getting high-output users?
14.
Who do you think is doing the best at pivoting their strategies and maintaining high-value but reasonable or maybe high-CPI [cost per install] intent campaigns? What was Facebook’s ability to do these high-value, high-CPI campaigns pre-IDFA and now?
15.
How has Unity trended and evolved pre-IDFA to now?
16.
Was Unity slower to evolve than the other players? It seems to have taken it longer than AppLovin or Google, who didn’t really have to change anything. Does that impact the spend coming through Unity in the sense that, if it wasn’t ready immediately after deprecation, it wasn’t the platform to partner with early days? How quickly could that spend come back? Is there permanent churn risk if it wasn’t the first one ready? Are developers not willing to use Unity because they’ve ingrained with others?
17.
How prominent was ironSource pre-IDFA and what headway has the company made since?
18.
How was Digital Turbine positioned as a user acquisition partner pre-IDFA vs now? It’s been quite acquisitive and is skewed much more exclusively to Android.
19.
It seems that at the advent of IDFA changes, it was considered the driver behind Apple’s pivot – though not spoken by it much publicly – as an attempt to increase the advertising business through ASA [Apple Search Advertising]. Much of what I’ve heard is that its SKAdNetwork is just not as efficient of a solution for campaign attribution. How does that stand today? What do you think is most lacking from Apple’s own SKAd?
20.
Would you expect Google’s Android ID to never be deprecated?
21.
Who do you think will be the 1-2 biggest winners across mobile gaming companies or ad tech partners due to what happened from the IDFA?
22.
Do you think there will be an increase in hyper-casual studio consolidation? Are the biggest mobile game companies interested in buying hyper-casual companies because they can’t acquire and monetise users independently, but, when they’re put into a larger dataset such as that of Zynga and King, that headwind dissipates?
23.
You mentioned that the biggest mobile game portfolios will be able to weather the storm the most, given their internal data. Does that apply similarly across all companies? It seems King was able to grow through IDFA with no issue, just citing a lot of re-engagement of its existing install base, whereas Zynga’s tone seemed to imply it was a transitory issue that it was working through, despite the similar massive install base. What do you think are the big differences why King was less impacted than companies such as Zynga?
24.
What are your expectations for M&A in the gaming sector? It seems gaming M&A has upticked recently, particularly around the size of the deals. In the last few weeks Take-Two took out Zynga and Microsoft bought Activision.
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