I received the following questions yesterday and wanted to share the answers so more users can learn.
Being an indie game developer I’m trying to understand all the low level stuff that happens around user acquisition but I often lack experience to close the gap. After reading the latest blog post
I have a few simple questions that I hope you can answer. Regarding the user that generated $74 in ad revenue at $134 eCPM.
The reason of such a high eCPM
Does the advertiser know the spending potential of the user (whale) and his playing patterns and such wants to acquire it in a game where spending can be in tens of thousands of dollars?
First, let’s start with some basic terminology so that we will be aligned:
ADVERTISERS – App publishers who want to spend money and get users.
PUBLISHERS – App publishers who want to get money and are willing to put ads inside their games
Now, let’s talk about the reasons for high eCPM. In most games, the advertising transaction model is based on performance – CPC or CPI. Advertisers are willing to pay high CPI and CPC when they believe that users will likely to do two things:
- be loyal/engaged/retained
- spend money in their apps
Most likely in this case, the ad-network was able to convince some advertisers that a segment of users that includes this one is worthy of these high CPC or CPI but this by itself is not enough.
In order for high CPC or CPI to translate into high eCPM and revenue for the publisher, users needs to take actions – they need to engage with the ads, click on them and most likely also go and install the apps that were advertised to them.
In CPC model – eCPM is CPC bid x CTR
In CPI model – eCPM is CPI bid x CVR x CTR
There is an interesting report from Comscore that identifies a group of users they call “Heavy app downloaders” – you can read more about these users in this link – http://blog.soom.la/2016/12/reward-abusers-and-heavy-app-downloaders.html. It’s highly posible that the user who generated $74 in a single month was a “Heavy App Downloader”.
Was it a game where spending can be in tens of thousands of dollars?
Yes, as a general rule all big mobile game advertisers are apps where you can spend thousands of dollars.
Was this a result of retargeting?
Was the advertiser was trying to re-target the player which has churned? from the game, but did invest a big amount of money before churning?
It is possible that this user have been part of one or more retargeting campaigns. Obviously companies who have already experienced good results with this user would try to get him back. However, I doubt that this is enough. It takes more than one advertiser to generate that sort of revenue for the publisher and retargeting campaigns are only a small piece of the advertising ecosystem.
Are the advertisers wasting money on this user?
Regarding the 555 impressions delivered, if all these impressions are advertising a single game, I guess at some point the advertiser will stop Targeting ads to that player because it is a simple waste of money (he can not acquire the player). Is that correct?
Actually not correct.
Most ad-networks charge the advertiser based on a performance model CPI and CPC. This means that if the publisher earned $74 the specific user should have not only watched the ads but also clicked and installed some of the apps that were advertised to him. Most likely the publisher will want to keep getting this money so he will continue to serve ads to that users. The ad-network will keep targeting more ad campaigns to him due to the high performance and revenue he is generating for them.