Paris Roadshow: Choosing UA channels, dealing with competition, the future of indies
July 16, 2015
A French version of this blog post is available here.Paris may have received its famous nickname, ?City of Light? from its preeminent role in the Age of Enlightenment early adoption of gas street lighting, but we like to think it?s now because of the awesome innovation on glowing smartphone screens.https://twitter.com/kneyght/status/613363351582810113This was no more evident than the third stop of our roadshow where we explored the increasingly complex universe of mobile app monetization, marketing, fundraising, and design. On hand to guide our analysis was Martin Macmillan of Pollen VC, Alexandre Yazdi of Voodoo and creator of QuizRun, and Chartboost?s own Tomas Piktozis.[caption id="attachment_9209" align="alignnone" width="900"]
Left to right: Tomas Piktozis, Martin Macmillan, & Alexandre Yazdi.[/caption]We asked a few questions to try to distill a good plan for indie developers just entering the industry. Here is a look at just a small sample of the responses we got from the panel.There?s been relative stasis on the App Store top-charts (excluding the recent success for AAA title Fallout Shelter). What does this mean for indies? Is innovation in games dead?Martin Macmillan: We researched the games in the sub-50 spot on the appstore and found that as a whole, they were making larger and larger amounts of money than before. It may be more competitive, but the pie is getting larger.Martin is right here, the proverbial ?pie? is getting much larger. The number of smartphone users will surpass two billion next year. Let that sink in? Smaller markets that could barely support a cheap localization effort like Thailand could make for an entire studio?s revenue. A developer?s fall to lower position on the charts is no longer a death knell. Naturally, we don?t want to ignore the challenge that this increased opportunity brings: increased competition. However, the fact remains that the total number of success stories should increase.https://twitter.com/piktozis/status/613402673325473792For developers with limited time and money, how do you chose marketing channels?Alexandre: Before buying advertising traffic, buy players to get data and then analyse the data and make the adjustments. Go to the cheapest to get lots of volume. FB, Twitter, CB, Admob.Tomas: Make sure the networks you choose share all the data and are completely transparent. This allows you to optimize future campaigns against your goals, depending on the stage you are at. Alexandre and Tomas make two important points on the same side of scientific advertising. The issue starts with a need for users before you can determine the quality of your app. However, without knowing the quality (we?ll use LTV as an indicator), then attempting to buy traffic at a profitable rate is impossible. How can you know how much to spend without knowing how much your players are worth?The answer is to take the plunge early. Study the market, ask around for decent rates, and spend to the point where you can get usable data. Once you see the quality of users (this is where data transparency is essential), then tune your ad spend so that your spend has a positive return on investment.
Outside of a publisher, how do you get money to fund your game?Alexandre: In our case we financed our first version by parlaying funds from a previous company. Next, use friends and contacts in your network. After the soft launch, do some user acquisition, improve the game, and it is time to look for a business angel. There is also plenty of options for government help and loans. The key learning is that raising money is like full time job!Martin: We lend money to developers against their unpaid earnings from the Apple App Store. It takes 60 days to get your money from the platforms which is a long time so this seeks to lend money when UA is essential: usually as the game is at the top of the charts and needs users to sustain this moment.Alexandre and Martin had two differing strategies here. For Alexandre, his financing strategy came from bootstrapping via contract gigs and personal investments (a popular strategy among indies). The advantage here is that the profits are your own. He added a business angel and government help later, although developers need to weigh the potential sacrifice in ownership in exchange for larger amounts of capital and business expertise/connections.Martin?s focus was on filling a gap between payment and UA. This affects developers in a unique position where they are at the top of the app store charts, beginning to lose players, and don?t have money in the bank for UA. The lack of funds can be due to the length of time it takes major platforms to payout, so he recommends finding lenders who can essentially open up your iTunes Connect or Google Play Developer Console, see that the money is on it?s way, then lend you funds in the interim.https://twitter.com/breadcrumbana/status/613405807804346368Biggest mistake you have seen or made yourself?Alexandre: [Failure] to learn organization within the team, using good tools, communication so that all ideas are heard and considered. We often see failure to AB test during soft launch. A good developer will release game ASAP and then improve small things along the way.Tomas: A huge failure is to not have it all planned as early as possible in the development phase. Martin: If UA is not working out to be ROI+, stop spending this money and keep it for later. These points all boil down to one essential tenet: Implement the scientific method in your game development. This begins by having an organization that can facilitate hypotheses from all corners of the studio, test these hypotheses (plan for this to cost money), then analyze the results. Sounds simple but we all know the devil is in the details :-)For more great tips, stay tuned for our Berlin Roadshow Recap!Sant?Nate