We had the opportunity to sit down with Elena, Sharon, and Noelia from ZeptoLab to talk about monetization and user acquisition trends going into 2020.
ZeptoLab was founded in 2010, developing games around the character Om Nom. Since then, Cut the Rope games have been downloaded more than 1.2 billion times. The ZeptoLab team consists of more than 130 employees with offices in London, Moscow, and Barcelona.
In this exclusive video, hear this trio talk about their investment into developing hyper casual games, excitement on real-time bidding, sharing four important criteria for a successful ad partnership as well as their key advice to mobile game developers.
IAP vs Ads, what’s your monetization strategy?
Up until recently, we were focusing more on in-app purchases. We were trying to develop games that would monetize 70% with in-app purchases and up to 30% with ads. Recently, we had a shift in strategy focusing more on casual games. That’s why we shifted the way we look at monetization and the split is becoming more 50/50.
The biggest trends you are seeing as we get into 2020?
From my perspective there is definitely one big trend which is with the appearance of hyper casual companies. The space is changing rapidly because they need to launch the games fast. They need to operate fast and the whole process of game development it’s becoming faster.
That’s why we are looking at them and the automation that is happening in the game development, at the speed they are making prototypes, to then go for launch. We are trying to kind of take that from them and take that experience and utilize it in our reality. To apply it to the games that we develop. We are not developing hyper casual but we learn from them.
Marketing is becoming much more important to mobile gaming than it has been in the past. As the industry matures it becomes more competitive, it becomes more important how we invest in what new products that goes forward. What we’re seeing across the industry is that marketing has a role to play in helping each company decide where to invest and how to invest.
When developing hyper casual at ZeptoLab , marketing is being involved right at the beginning and testing user acquisition and seeing if it’s actually possible to take this concept and sell it profitably to users.
Your thoughts on programmatic and real-time auctions?
The movement of the industry toward programmatic and real-time auctions is hugely exciting from a user acquisition standpoint. Historically we’ve been held back by a lack of transparency, not knowing where advertising is going, not knowing how it’s really performing and having to rely on a third-party between us and the final publisher we’re advertising with.
With the move to programmatic and the move to RTB, now we can choose and we can actually say we want to advertise specifically in this game, and we want to pay this price, and we can see what happens. It puts a lot more data, a lot more information back in our hands and a lot more flexibility.
There’s one group that is trying to hold back from this change and almost putting their heads in the sand and hoping that programmatic goes away. That group is still not transparent, might still not share publisher names with us. That tends to be a group that we move away from.
Then there’s another group of partners that are embracing it and those partners I feel are becoming more sophisticated. They need to understand themselves a lot more about how our RTB works. They are starting to hire salespeople and account managers that understand that and understand machine learning, which a few years ago it was very rare to find a salesperson for an ad partner that had any machine learning background whatsoever, but now that’s starting to change.
For us, it’s creating a change of mind. How to understand each of the partners to be able to place them in the right position of the waterfall.
I don’t think enough of the industry has moved across to header bidding. I think there’s still a lot of confusion out there and a lot of mistrust of what header bidding will actually bring to publishers. I don’t think at this point there’s been enough case studies proving that revenue goes up. There’s a technical cost to shift from a mediation platform that you might already be using if you are going to shift to somebody else’s header bidding platform.
I don’t think we’ve done a good enough job at convincing the industry that the cost will be regained and more benefits will come from moving to header bidding. I think it will come. I think we are starting to see it’s moving in that direction, but I don’t know if it’s 6 months, 12 months, 18 months before we get there.
How do you choose your ad partners?
Geography matters because for example in C.A.T.S., we have a 50% revenue coming from China.
Quality matters. We don’t want to buy or be involved in any sort of fraudulent activity. They need to have a good reputation for quality.
Transparency matters. If they’re not willing to share data with us, then that’s certainly a negative.
I would say the third thing that we look for is a proactive attitude. So if they’re coming to us and saying hey, how about changing this or trying this in a campaign that’s fantastic. Too many of them just sit back and take our money.
Gaming is not an industry where companies necessarily grow and keep growing and keep growing. In gaming, you can go up and you can go down depending on the latest product that you’ve launched. I really value partners that stay with us in the good times but also through the times where maybe we can’t spend as much on user acquisition as we did a year ago.
It’s important that we get our learnings together with our partner. As the partner digs into our data the same as we do and sees the data from a different angle. We started working with Chartboost many years ago. When you meet Chartboost people at the conferences and you still see the same people that means that during these seven years the people are still with the company!
What I especially like about Chartboost is that always, throughout all these years, it’s a very friendly partner, which is very different from others. We don’t have just a formal relationship with you guys. We always have something informal, something in common to share, and we can sit and laugh and talk about some personal stuff.
Every time I have to contact the account managers, the team or with Robin, it’s always a pleasure because they are always open to collaborating, to answer your questions. For all our meetings, we always book an hour, but half of it is just like tell me what you did this weekend, what are your plans for the next weekend, or please share with me the pictures.
Is this friendship that you are building that is helpful later when you have any issue or they want to test something. It’s awesome because it can only work. It’s fluid and I really love working with you guys.
A partnership is not the relationship between companies. It’s the relationship between people and that’s where we get this extra mile which helps a lot and which moves us and which moves the industry.
Your advice for mobile game developers?
Do not underestimate analytics. Data is everything. Marketing is very important, try to test everything as early as possible. It’s not the space where you develop the game for half a year, a year, and then you launch it and that’s it. Be proactive and try to break it into small pieces and get your first results as early as possible. Understand whether it’s a prospect or you should kill it.
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