Expert interview: Three minutes with Nexon
User acquisition and monetization insights from a global gaming leader.
The Bango ‘Three Minutes With’ series talks with app developers around the world to get their views and experiences with user acquisition and monetization in the global marketplace. In the latest article, Bango Audiences talk with global leader in online games, Nexon.
Nexon are developing and perfecting their own UA algorithm models to optimize targeting and messaging says Mr Lee WooChang Team Manager UA Department at Nexon. With more than 80 live games operated across more than 190 countries, South Korean publisher Nexon is a global leader in online games. Long-standing hits include MapleStory, Dungeon&Fighter, MapleStoryM, V4, KartRider Rush+ and KartRider.
In this interview, Lee shares his industry knowledge and gives insight into the UA strategy Nexon applies to ensure it continues to thrive, including the custom audiences that Nexon use to find and target users who are not only likely to have high ad engagement rate, but also likely to make IAPs when they play!
How do you monetize your mobile games?
Lee WooChang, Nexon: Most of the revenue from Nexon mobile games are generated through In-App-Purchases(IAP). A few of Nexon games also use the In-App-Ads model, yet the IAA portion is relatively small compared to the entire Revenue scope.
Do you think about monetization when you run user acquisition (UA) campaigns, or do you treat monetization and UA as separate activities?
In running UA campaigns, UA ROAS – accumulated UA revenue over UA Spend – is our primary KPI which decides our campaign optimization strategy. Despite the literal meaning of “User Acquisition,” UA is more than just bringing in game users. UA’s purpose is to find users who are likely to remain and enjoy the game and eventually make purchases. Therefore, as Lifetime Value(LTV) differs country by country, and game by game, we set appropriate ROAS KPIs per country and run UA campaigns based on those goals.
For games that are specialized in IAA models, ROAS KPIs are estimated based on combined revenue performance of IAP and IAA. Also, we strive to discover high LTV users while balancing Cost Per Acquisition. While we do carefully monitor cost per install performance to prevent any spikes in conversion cost, sometimes we strategically bid a high cost per install to bring in whale users, players who spend relatively higher amounts of money in a game.
An install volume is indeed a critical KPI during UA campaigns for title launchings or major updates, while retention rate and revenue generation tend to hold more weight for sustaining campaigns.
How has your approach to UA changed over the last few years?
For the last several years, market players competed to find more precise methods in estimating UA campaign performance. As a result, UA managers were able to access far larger and more significant UA data.
Based on this massive UA data, UA managers can now look up and compare UA performance by target groups as well as by creatives. Due to this advance, a marketer’s capability of building more meticulous UA campaigns is now a key deciding factor in UA performance enhancement.
Major ad media began to provide machine-learning based optimization algorithm, enabling UA managers to manage campaigns more easily. Nevertheless, a more independent approach should also be taken into consideration for the purpose of controlling our reliance on ad media by actively predicting and tracking in-game events at our end through continuous monitoring.
Along with the UA industry’s growth, technology related to fraudulent traffic generation has advanced. A myriad of fraud traffic is prevalent among some network media, jeopardizing accurate UA data analysis and proper decision making. For this reason, the ability to supervise and handle any fraudulent activities is also another significant responsibility of today’s UA managers.
Also, impressions on video ad placements continue to rise magnifying video creatives’ impact on UA campaigns. Video creatives customized for more diversified formats keep growing in its numbers, and this video clip-oriented trend will stand in view of MZ generation’s dominance in mobile culture.
What’s your biggest innovation in UA?
Lately, Nexon’s UA team is highly focusing on developing and perfecting Nexon’s own algorithm models, based on Nexon game user’s elaborate in-game data, which we are planning to apply to divergent UA practices, including target optimization, target-customized messages etc. We are also researching on how to measure UA performance and to deduce essential insights from it, especially on retargeting UA campaigns where we target lapsed customers. For retargeting campaigns, game companies have access to lapsed user’s past game play pattern, hence we can conjecture which users have a higher probability of returning to the game. By targeting those return-expected users with more reach and frequency in ad impressions, in conjunction with customized messages that reflect user’s previous game pattern, we strive to achieve effective ad spending with improved ad engagement rate.
Bango Audiences helps us to find and target those users who are not only likely to have high ad engagement rate, but also likely to make IAPs when they play. We have utilized Bango Audience for Nexon’s domestic and global UA campaigns, and the results have substantiated that Bango Audiences do perform better, with higher conversion rates compared to other target groups (interest, demographics wise). Seeing the potency of Bango Audiences, Nexon continues to adopt the Bango Audience model to our major titles’ UA.
Furthermore, in terms of UA budget allocation and UA creative development, we try to avoid decision making based on an individual’s disposition, but endeavor to maintain our data-driven approach grounded in actual pre-install and in-game user journey data.
What do you do to capture surges in mobile consumption around seasonal peaks such as national holidays?
The scale of Nexon game users and revenue keeps rising due to the recent surge in mobile usage, and to keep up with this accelerating trend, our primary action is to extensively cover mobile UA placements and effectively deliver the right message to the right target audience. Nexon is providing online PC game services as well as mobile games, so we are actively employing mobile ad inventories and mobile target users to advertise major PC online games’ updates and pre-registrations.
At what stage does monetization become the priority in your UA strategy?
As mentioned earlier, for launching and update UA campaigns’ KPI, we are focusing more on install volume scalability, while focusing more on ROAS per ad media and per target for sustaining UA campaigns.
For sustaining campaigns, a title’s past UA performance (cohort ROAS, LTV trend) is adopted as a reference to predict the next new/returning user’s ROAS. Based on this actual performance-based forecast, sustaining titles’ UA campaigns usually run under stricter ROAS management.
For launching and updates, ROAS/LTV tend to be higher compared to other periods, so we allocate relatively massive UA budget during this time precipitating an increase in UA install/reattribution volume.
What will you do differently in your UA campaigns going forward into 2021?
I believe data-driven decision making will continue to expand even deeper in UA campaigns, and the UA industry will keep changing at a very fast pace, just like the last few years.
UA data processing, estimating, and analysing capabilities will become an imperative prerequisite for a UA organization to be successful. Moreover, those data-driven potentials will also capacitate solving different issues in UA operations and decision making.
Also, iOS 14 update’s IDFA issue will bring about colossal changes in UA management during the second half of 2020, but I believe the industry itself and each UA manager together will seek and find an alternative.
A pioneer in the world of interactive entertainment software, Nexon was founded in 1994 and introduced some of the biggest innovations in our industry including the world’s first graphic massively multiplayer online role-playing game (MMORPG) and the first free-to-play game.
Since then, we’ve continued to be an industry leader in MMORPG’s with more than 80 live games operated across more than 190 countries proving that online games are a progressive, mainstream form of entertainment to be enjoyed by everyone.
By focusing on quality we have developed long-standing IP franchise hits, including MapleStory, Dungeon&Fighter, MapleStoryM, V4, KartRider Rush+ – and KartRider. Each of our games is tailored to the unique geography in which they are played, which is why our titles continue to be played by millions of people around the globe.