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Unsustainable Strategy: Buying Traffic To Scale Installs

Most game companies rely on buying traffic to scale game installs. This is not a sustainable strategy. Big game companies monopolize the best media within their own games, and can block third-parties from advertising. Then there is ad blocking tech...

Rich here...A potential investor asked me to write a Game Monetization doc for my free-to-play (F2P) Grudge Match game.  It was a terrific experience because I had to focus on what matters most.  That is, making money.

Monetizing free-to-play games is a process beginning with player acquisition, optimizing usage & reducing churn, improving conversion rates, enabling spending, tracking metrics, tweaking game play.  Data is usually “king,” and I would argue that effective marketing should share the same status.

Most game companies rely on buying traffic to scale game installs arbitraging their media spend against the perceived lifetime value of a player.   Rising media costs, ad blocking technology (pushing general market advertisers into games), and too many games chasing the same audience make this an unsustainable, long-term strategy for two reasons:

  1. Supercell, King, and Kabam have become proficient making money from their games thereby increasing the lifetime value of their players.  These companies mostly use their own in-app advertising to buy audience share.   If these companies choose to take a marketing loss to increase market share, they could prevent other games companies from entering market.  With Activision Blizzard’s recent acquisition of King, the lack of suitable ad inventory will become more profound.
  2. Once ad block technology become ubiquitous, more general market brands will be driven to advertise in games, which will drive up the media cost.   While game companies will benefit from increased ad revenues, they will not be able to buy audience at an affordable price.

Buying traffic is an inefficient too.  Identifying players who might like your game -- and targeting them – is a much better use of your money.

When writing your game development doc, take your time and really think through how you are going to market your game.  I owned one of Hollywood's top marketing & promotion companies for 10+ years, and I understand media well.  It took me 3-4 months to write a marketing plan for my Grudge Match game that I could defend.

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