Mobile Monetization Optimization Richard O’Connell Global Marketing Director| PapayaMobile Inc

1. Mobile Monetization Optimization Richard O’Connell Global Marketing Director| PapayaMobileInc

2. Papaya story so far… 2012 2011 2009 2010 Social Network Open APIs, Game Engine Cross-Promotion Network Mobile Games

3. A few of our partners…

4. Overview • Monetization Overview • Freemium Social Games • Freemium Ad Supported • Maximimizing lifetime value

5. Awesome isn’t good enough!

6. Most aren’t getting rich from mobile • 59% of Appsdon’t generate enough revenue to break even on development costs • 80% don’t generate enough revenueto support a standalone business • 68% earned less than $5000 with their most successful app http://app-promo.com/wake-up-call-infographic/

7. Mobile Game Monetization Models GameTypes Monetization Model Freemium in App Purchase Mobile Ads / Cross-Promotion Paid Merchandizing Social Games Arcade Games Deep Console style experience Monster Global Mega Hits

8. Today’s focus Game Types Monetization Model Freemium in App Purchase Mobile Ads / Cross-Promotion Paid Merchandizing Social Games Arcade Games Deep Console style experience Monster Global Mega Hits

9. Today’s focus Monetization Platforms Monetization Model Freemium in App Purchase Mobile Ads / Cross-Promotion

10. Monetization Overview • Freemium Social Games • Freemium Ad Supported • Maximimizing lifetime value

11. Consider Elasticity of Demand Price affects supply $0 to $0.001 is huge barrier $0.001 to $1 is easier Multiple low price purchases easier than fewer high price

12. True Fans make up just 4% of paying Papaya farm users… …but account for 60% of virtual good revenue

13. “True Fans” spend a greater proportion on consumables

14. Offer low cost Consumables • Each with their own play/refresh profiles • Pay with Grind only • Pay with Cash only • Limit access by ‘Level’ • Pay to skip ‘Cool-down’ Nagging has an impact on long term loyalty

15. Applying The Theory • Balance with different Durables • Each with their own art style & impact on gameplay • Encourage emergent play • Grind or in-game currency • Offset nagging of consumables

16. High spenders start small – but increase with time, peaking in 2nd and 3rd months

17. True Fans are happy to spend money in the long term Don't break the Free Player experience Takes 8-12 days to start paying Make it great to spend the first $1 Nurture one-time spenders & low spenders What are your ‘Gateway’ purchases? Free players are your most important marketing channel. Keep them happy!

18. Monetization 3.0 • Make buying goods part of the fun • Collection Cash-in • Grind relief goods • Level limited items • Purchase only items • Special “Level-clearance” items

19. Compulsion Loops - Give Players a reason to keep coming back Schedule of reinforcement Grinding & flow Visible achievement stream "Just one more turn" What happens between sessions?

20. Applying The Theory • Reward repeat play with Collections • Each with an art style relevant to their source • Encourage gifting/trade with friends • Trade in for Consumables • Trade-in for Unique Durables Image Source: http://www.speedrungames.com/?cat=5

21. Things to Avoid… • Things to Avoid… • Don’t Punish Players • Don’t require purchases to continue • Don’t make the game painful without spending • Don’t sell goods players can’t show off Happy freeplayersare vital for your high spenders

22. Monetization Overview • Freemium Social Games • Freemium Ad Supported • Maximimizing lifetime value

23. In-game banners require large volumes of traffic • Industry CTR for mobile ads just 0.79% in 20121 • Average eCPM for mobile ads just $1.35 in 20122 • Ads were only viable for mega hit titles such as Angry Birds. Players hatebanners. Most titles make little revenue. 1: http://www.forbes.com/sites/ericjackson/2012/08/03/why-the-higher-click-through-rates-for-mobile-ads-which-facebook-touts-mean-nothing/2/ 2: http://www.clickz.com/clickz/news/2220099/us-widens-lead-with-average-mobile-ecpm-of-usd137

24. New ad formats offer hope! • Interstitials produce high CTRs. • On AppFlood we saw a network average of 9% CTR in October. • Top games over 30% CTR • ECPMs on AppFlood Interstitials 12x higher than banners New ad formats a significant driver in game discovery

25. Why do these ad formats work? • Offers content related to users current behavior • Users constantly looking for “Something else to do / try” • Games have definitive end points. Game Over, level reached etc. • Prospect of free new games always appealing. Earn from churn!

26. Ad Optimization tips • Show interstitials when game paused. • Show interstitials after levels cleared. • Show interstitials after new items are unlocked. • Use interstitials after a game is left idle for more than a minute. Balance volume of ads with effect on retention

27. Try avoiding... • Displaying more than one ad on a single page. • Interrupting any active gameplay. • Forcing users to click in order to complete tasks • Misleading users or causing accidental clicks Poorly thought out ad placements can impact on retention

28. Word Drop Plus Oct 29th – Nov 4th Average CTR 15.04%

29. Dragon KingdomOct 29th – Nov 4th Average CTR 10.91%

30. Monetization Overview • Freemium Social Games • Freemium Ad Supported • Maximimizing lifetime value

31. True fans can take 8-12 days to start spending Work with the user lifecycle to keep them engaged Build Anticipation between Games Cross-Game Virtual Currency We don't just want a one night stand… Typical number of Games an X-City player spends money

32. Use cross-promotions to maximize lifetime value • Products have a lifecycle • Players also have a lifecycle • Churn is inevitable • Ensure churn is monetized

33. Traditional Ad Networks: Selling Traffic Buying Traffic Total value lost to Ad Networks: 60%

34. Your Share

35. Commission-free cross-promotion • No minimum traffic requirements • No lengthy deal negotiations • Free to setup, free to use • 100,000,000s monthly impressions available • appflood.com

36. Thanks! Richard O’ConnellGlobal Marketing Director, PapayaMobile richard.oconnell@papayamobile.com papayamobile.com appflood.com