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Apps are the most competitive market ever - Rovio exec

VP of acquisition and engagement says user acquisition costs must be part of core development budget

As Rovio's new VP of user acquisition and engagement, Eric Seufert will be responsible for getting the Angry Birds developer's new franchises noticed. And as he told mobile ad and analytics firm Chartboost recently, that's no small task.

"In my opinion, the app economy is the most competitive marketplace that's ever existed," Seufert said. "The barrier to enter into that marketplace is extremely low. And because the potential rewards for being a popular app are high, people are spending lots and lots of money to market their app. For example, Supercell reportedly spent something like $440 million last year on marketing. Not all of that was on performance UA, but a huge chunk of it was."

That said, Seufert believes there are a few things developers can do to gain a competitive edge without blowing half a billion dollars on getting the word out. He was particularly impressed with the state of analytics and how they allow developers to target users for acquisition more precisely, and encouraged developers to set aside money for a soft launch marketing budget.

"I think you can do it on $5,000 to $10,000 - it doesn't have to be $100,000," Seufert said. "You can gather a decent amount of data with $5,000, especially if you have a sense of the core demographic that you should be targeting. And when you think about the overall development budget of the game, to not gather crucial feedback about how the players use your app is silly. This isn't just for the sake of trying to figure out what the LTV is, this is for seeing how the first-time user experience looks and for seeing where the choke points are."

Developers can't rely on user acquisition being completely free, so they need to be prepared to shell out at least a little to boost their player base.

"I hear people say, 'I don't have a marketing budget,' but that to me is insane because developing a premium app requires gathering data before you actually launch it," Seufert said. "I think it's wrong-headed to think about UA money as 'marketing budget' - especially for a soft launch. That's what's needed to develop your app. It's got to be a basic step in your development budget forecast."

Seufert acknowledged some developers prefer to launch their app and hope that new players flock to it organically, but he added that app stores are not set up to promote equal discovery of new projects. They're "designed to be winner-takes-all," with popular titles getting the key feature placement that only solidifies their popularity.

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Latest comments (6)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.4 years ago
So...spend your way to the top?

Reminds me of many of the games themselves. Pay to win.
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Craig Bamford Writer/Consultant 4 years ago
So cost-per-acquisition is skyrocketing, and ARPU is dropping like a stone unless you're SuperCell.

How is this supposed to be the future of the industry?
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""I think you can do it on $5,000 to $10,000 - it doesn't have to be $100,000," Seufert said."

With average CPI being around $3, 10K gets you around 3300 downloads.

While in soft launch, 3K users can be large enough number to give you some meaningful data. But terms of a live game that is nothing. In order to get any meaningful number of users via PBM you need to have a budget of at least 100K+, preferably millions.
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Show all comments (6)
How is this supposed to be the future of the industry?
Mobile games are certainly not healthy and in longer term the current stage is not sustainable.

Currently 99,99% of developers are actually paying to keep this business running, in terms of burning their own (or investor) money to make games that can get millions of users but never breaking even let alone making profit. Mass extinction is inevitable if this continues long enough.
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Darren Adams Managing Director, ChaosTrend4 years ago
Call me naive, but as far as I am concerned the moment you start paying large amounts of money to retain customers means your product is no good and you should start again.
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Jamie Firth Video Games Production 4 years ago
@Darren Totally right: If you're having to spend to retain, then your game is not good enough.
However, I'm pretty surprised that people are scoffing at the notion that you need to spend money in order to promote your product to acquire users - which has been the case for *any* product in the history of ever.
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