(Originally published on Advertising Week)
The gaming industry is growing at an exponential rate and is set to hit $470bn by 2030, according to GlobalData. Spurred on by advancements in AI technology, specifically AR and VR, and ‘smarter’ smartphones with 5G connections, gaming is expanding in all areas.
Where once paid console games dominated, the rise in free-to-play games, cloud gaming and significant advancements in the quality of mobile gaming including IP games such as Pokémon GO, mean the industry is far more diverse than it was a decade ago. And the same goes for its marketing.
Across all industries, gaming has the most diversified marketing strategies. Marketers utilise the full range of tactics in their toolboxes; search, social, display, influencer marketing, TV, CTV, affiliates and more, across an average of 17 different mediums. The reason marketing is so diversified among gaming companies is that for free-to-play games in particular, marketing will often represent the biggest expenditure, making the need to continuously test new channels extremely important.
Yet, while the testing of new channels and tactics is crucial, the approach gaming marketers take is not always the most strategic when it comes to getting the best results for their spend.
It’s common among gaming marketers to increase ad spend around special occasions such as major shopping holidays including Prime Day and Black Friday. INCRMNTAL data has found however, that although major occasions tend to yield a substantial increase in sales and revenues, often these can be attributed to the dates themselves rather than results driven by ad campaigns.
Gaming is among the most competitive industries and while users are immersed in a game, it’s unlikely they will start playing a similar game made by a different gaming company. But many CMOs will still try to tempt users by increasing ad spend during high seasonality.
Yet, data and analysis show that additional spend would not generate any real incremental value beyond the already high organic returns. In fact, brands typically see an average of 59% of their conversions attributed to organics, while only 41% comes from paid media. And on many campaigns analysed across different industry sectors including gaming, the value of ad spend during shopping holidays was lower than the value during normal seasonality. So advertising around these dates is wasted budget for many gaming brands, which could be reinvested to help boost KPIs during periods of lower seasonality or against more micro-influences.
By micro-influences, we mean day-to-day factors such as the weather or if it’s a weekday or weekend. We know for instance that games are more likely to be played during certain times such as when it’s raining outside and consumers choose to stay in, or during peak commuter hours or at the weekend as opposed to weekdays, when users might be at work or school.
These considerations might seem fairly insignificant but can actually have as big an impact on KPIs as macro events. Understanding the effect of such variables could be leveraged for efficient and continuous growth.
The only way to know for sure is to integrate technology that’s able to measure marketing incrementality as it happens across all campaigns and micro-influences. This will enable brands to truly understand if budgets are being spent to the best effect, and marketers will often be surprised to find that their advertising has less impact than they think.
Yet effective measurement is a problem for gaming industry marketers. Lesser known games including casual, hyper casual, RPG and PvP typically advertise across dozens of different channels but are often unable to identify cross-channel cannibalisation, making it impossible to see which marketing tactics are driving positive results and which are not. Likewise, major gaming companies that operate IP games generally enjoy a high percentage of organic conversions but many experience the challenge of scaling paid advertising without a clear understanding of the true incremental value of paid marketing over organics.
Measurement has been a bone of contention for marketers across the board since privacy legislations and the deprecation of deterministic attribution came into play. As a result, marketing teams have been trying to find measurement platforms that will afford them the same level of granularity as cookie-based solutions.
Partnering with tech solutions that can provide games marketers with granularity into their ad spend value measurement is essential, especially given the competition within the market and the fact that for many games, marketing is their biggest expenditure. Games need to know if stopping marketing spend on certain channels during the week and reinvesting some of the money saved into different tactics during the weekend could boost downloads or in-game purchases while also reducing marketing budgets, for instance.
Without this level of insight, gaming marketers are simply taking multiple marketing shots in the dark. It’s only by analysing the effects of each tactic in detail that they can reach the next level in the journey to true marketing success.
Maor is the CEO & Co-Founder at INCRMNTAL. With over 20 years of experience in the adtech and marketing technology space, Maor is well known as a thought leader in the areas of marketing measurement. Previously acting as Managing Director International at inneractive (acquired by Fyber), and as CEO at Applift (acquired by MGI/Verve Group)