Are pre-installs the best path to acquire high-value, highly-engaged users?
Funda Yakin, Director Media & Marketing Development at InnoGames, Germany’s leading developer and provider of mobile and online games, is certainly convinced—and for a good reason.
InnoGames' early decision to pre-install its titles on mobile devices through direct deals with mobile operators and handset makers has allowed the company to report lower CPIs and increase LTV by up to 40%.
It’s an algorithm for success that Funda will share with attendees at Mobile Spree (Berlin, June 7). There she will deliver a keynote speech discussing the benefits of being in the close company of mobile operators (who enjoy a high degree of consumer trust) and in close to proximity to potential users, occupying prime real estate on the device homescreen that audiences can’t miss.
We catch up with her to ask about her experience and her top tips for other app marketers.
With revenues of more than €160 million and more than 200 million registered players InnoGames is Germany’s leading developer and provider of mobile and online games. Perhaps best known for Forge of Empires, Elvenar and Tribal Wars. InnoGames’ complete portfolio spans six live games and several mobile titles in production. What started you on the journey to pursue pre-installs as a way to acquire users for your games?
In a way, it is linked to my personal and professional background in mobile business. Before joining InnoGames, I worked at a German mobile operator, and I also worked at Microsoft in Germany and in the U.S., where I was responsible for the products Windows and Lumia. During this time, I saw first-hand the benefit of presenting users with gaming and shopping apps directly on the smartphone, rather than expecting them to spend hours looking for them in the app stores. Apps were also included as a kind of start-up package with the phone, and I recall a very big and very successful campaign where Angry Birds came preloaded on Nokia devices. So, when I started at InnoGames, I asked the question: why not try it with our games? For me, it was low hanging fruit, but for the company, it was something really new.
Research shows that people tend to interact with apps that come right on their smartphones right out of the box. Preloading your app clearly removes the issues around app discovery, what are the other business benefits?
InnoGames offers in-app purchase and virtual currency, so we monetize through driving user engagement with our games, not delivering advertising. As such we are focused on achieving long-term and on offering a sustainable user experience. It’s all about trying to find the right balance of highly sustainable users and favorable engagement metrics, while keeping CPIs in check—and this is what we can achieve with pre-install campaigns. The scenario is very different to classic performance-based user acquisition because the user finds the game on their smartphone, and that means it has cleared rigorous testing to be preloaded on the device in the first place. In other words, the app comes with a kind of recommendation from the mobile operator—and that’s a trust factor that plays in our favor.
In test campaigns, we saw that users who interacted with apps preloaded on the phone had higher retention rates, higher conversion rates, and higher loyalty—all because they trusted and tried the apps that came with the smartphone. Of course, this is a combination that ensures we are connecting with players likely to get hooked on the game and, again, results confirmed this. Today, we see CPIs that are comparable to other campaigns but better conversion rates. This is because we are targeting the right audience-device combination, a highly engaged audience highly likely to interact with our games—again and again. This means we acquire users that stay users, which reflects our high-quality approach in general. Overall, we see an increase of up to 40% in LTV (customer lifetime value) compared to other campaigns.
What about the issues you would expect to face when you rely on app stores and advertising to address and acquire players, or just A/B test what works and what doesn’t in your ad campaigns? Developers often complain these channels are a “black box.”
In the case of pre-installs there is no ad fraud because there is no app and no provider between the users and the games. Direct deals with carriers mean the app is right there on the device. Beyond that, we benefit from having the proper tracking in place through our partner, Adjust, that gives us high transparency and visibility into all our campaigns and performance from start to finish.
You have been quoted as saying this is a “win-win-win situation” because users get instant access to apps they can trust, mobile operators increase customer connection and loyalty because they are offering great apps out of the box, and InnoGames can activate and motivate high-quality users from the get-go. To top it off, ad fraud isn’t a problem. So, what is the downside?
There is a downside because different carriers have different technical requirements. There is no standard, which means setting up is a lot of heavy lifting on our side. Pre-installs are a great additional channel to consumers, but it's not for everyone. Space on the smartphone is limited and so mobile operators are limited in the number of apps they can offer. It's hard to get on the device, and then you need to calculate anywhere from 6-12 months to set up the first campaign from both a technical perspective and the effort needed for negotiations. My advice to other app companies: bring lots of time and a team of good business development people and account managers to the table. Having the right contacts is also key if you want to enter this market. It takes effort, but, for us, it’s not about buying installs or registrations. We want long-term and sustainable users, and this is the route that works for us.
Be sure to register here to attend Mobile Spree, where you have the opportunity to connect with Funda and learn more about her experience at InnoGames, where she is responsible for the strategic development of marketing and the worldwide expansion of direct media partner cooperation. Next to Machine Zone or Supercell, InnoGames is among the gaming industry’s top five ad spenders in the U.S. and Germany.