When AppTrackingTransparency was introduced, many predicted the doom and gloom situation and the death of mobile gaming. The changes shook up the mobile gaming ecosystem and, along with the current macroeconomic situation, had a devastating impact on the valuations of its key players. While some companies saw a rise in cost and a decline in revenue, others managed to rise above the situation, launch successful games, or reinvent themselves and continue growing. This is proof that if the audience is there and the need is there, it's not that the market is broken. Our products need to be reinvented to fit the new reality. We need to find a new product market fit.
Playrix is a leading mobile gaming company that has been making waves in the gaming industry for its highly successful games, incredible production value, and, yes — misleading (aka non-representative ads) ads. With a portfolio of popular games such as Gardenscapes, Homescapes, and Fishdom, Playrix has established itself as one of the most prominent players in the mobile gaming market, with over $8B in lifetime revenue. What inspired me to write about them is their approach to User Acquisition (UA) and how UA and creative findings impact their product roadmap. This approach not only helped them survive the proverbial mobile marketing winter but also helped them record one of the highest revenue months in their recent history. According to Sensor Tower, in January 2023, their grossed over $250M in IAP revenue which is their 3rd highest revenue month ever. The other two highest-grossing months happened pre-ATT launch during the peak of the COVID pandemic.
User Acquisition — The Playrix Way
I always admired their UA approach because it's heavily ad creative focused and, despite an incredibly aggressive approach, it doesn’t seem wasteful. What do I mean by ad creative focused?
It's no secret that Match 3 is the most competitive mobile gaming genre. This makes doing UA for a Match 3 game a typical winner-takes-all activity, and the publishers willing to pay the highest CPM win the highest market share.
As we discussed in the previous few articles, CPM is a function of CPI (LTV) and IPM (Creative Performance), and the higher the CPI and IPM, the more competitive the advertiser is. In the case of Playrix, IPM is the metric when they decide to take off and switch from the maintenance (business as usual) mode to the aggressive push mode. They keep testing ad creatives (according to some sources, thousands of creatives) in their business-as-usual campaigns. Once they find a new highly successful hero creative, they tend to buy out every single impression. The initial push with misleading ads from 2019. ended up annoying so many people that they were banned from using them in the UK due to their non-representative nature.
The misleading ad push was succeeded by the famous "Pull the pin" puzzle-style ads that put Evony and Hero Wars on the map in the past few years. The combination of non-representative puzzle ads with a casual, highly retentive product seemed to be the winning combination that led them to do another push later in 2022, now with the fully integrated new onboarding that features these mini-games in the early phases of the game.
Gardenscapes onboarding as of February 2023
From creative audience pairing to gameplay audience pairing — Doubling down on what's working
The new onboarding is there for two reasons:
- Since misleading ads were banned, developers had to find ways to implement highly converting (and yet misleading) ad elements into the game. This led to the rise of mini-games initially as a separate segment of the game and, as of late, even as part of the onboarding and the core loop. I wrote about some of the mini-games in my previous article, which is the perfect prequel for this one.
- While misleading ads significantly reduced the cost per install (CPI), the retention of users coming from those ads would be so low that the actual gain on the CPI front wouldn't be high enough to offset the loss on the retention side. Over time, misleading ads evolved and combined the actual gameplay with misleading elements to tackle the retention decline. To understand the actual value of those users, User Acquisition teams had to focus on blended metrics such as Cost per Payer or Cost per Retained User. Here is an example of how CPI and Cost per Retained User can differ based on the creative segment we're using.
The CPI discount generated by these ads inspired developers such as Playrix to go one step further, and implement the most engaging segments of misleading ads in their actual gameplay. The most prominent and successful example of this combined approach is Royal Match. Since its launch in February 2021. the game generated over $600M in gross revenue
Royal Match has proven that, what was initially considered a fad, was now a way to tap into a large and truly incremental audience. The audience that was looking for a slightly different type of puzzle gameplay, the gameplay that was featured in the ads they were clicking on. This was a huge A-ha! moment for many folks in the mobile gaming industry, including Playrix. It was not only the UA strategy that had to be changed to unlock the next growth phase. It was the product that had to evolve to accommodate the next 100M users. The industry had to move from ad creative — audience pairing (showing the right creative to the right audience) to gameplay — audience pairing (serving the right content to the ad engaged audience). This was done through mini-games and it is the winning formula for unlocking growth as it helped on both CPI and retention fronts. Mini-games will continue to be one of the most dominant mobile gaming trends in 2023.
In the case of Gardenscapes, you can quickly see how their product evolved using ad creative findings. When misleading ads were initially launched, a lot of focus was on renovation and failed outcomes (which inspired Matchington Mansion by Applovin), and they changed their app storefronts to focus more on this segment of the game. To get the most out of this trend, they had to go one step further and fully implement mini-games into their gameplay. This is now fully live in the game and across all of their app store assets, as you can see in the picture below.
Why does this matter in the post-ATT world?
Given the scale of their business and the massive footprint of their games, chances are you knew most of those things about Playrix before. What is new and unique is that their UA strategy is working in the privacy-safe, post-ATT world. Which is what most industry professionals didn't expect to happen.
The central assumption of the post-ATT world was that the advanced targeting capabilities (FB AEO/VO, Google tCPA/tROAS, etc.) are radically impacted along with our ability to find payers and highly engaged users at scale. As a result, the quality of the users coming from performance marketing campaigns would deteriorate, and combined with the lack of ability to measure the success of these campaigns, many predicted this would be the end of most mobile gaming that is so dependent on UA.
The first part of this did happen. If you had a chance to read Eric's articles about META earning reports and the "ATT Recession" you're probably well aware of this. But, instead of marking the complete end for advertisers, it called for a different approach to UA; one that was significantly more focused on the top of the funnel (CPI) vs. engagement and payer volume. We went back to the early days of user acquisition when CPI was the main metric we all focused on.
ATT moved the focus from engaged users and payers to the top of the funnel, which meant lower cost (and lower risk as a result) and lower quality of users. This is where the holistic approach to Product Design and its impact on UA excels.
We are now deep in the new, post-ATT market, and this market requires different type of product. The one that has the best retention, the lowest cost at the highest possible scale. In other words, the best product market fit.
Personalization is one way to tackle this issue. The other and, in my opinion, a better way is to build products that users you can reach want. Creatives are the first touchpoint we have with our potential customers. If a specific audience shows intent to engage with a particular type of creative (by interacting with it), we should cater the content behind the creative to them. This is why end-to-end creative reporting is so crucial. The misleading ads failed initially because users interacting with them expected a different type of experience.
The truth is that users we drive to our apps in this, some say shotgun approach, are more casual and have lower ARPI, but the scale is definitely not impacted. The users are still there. If our CPI < LTV formula is not broken, UA will still be efficient and help our apps grow.
Playrix is one of many examples here. You'll notice a pattern if you analyze the biggest and most scaled apps in the post-ATT era. It's the games that balance broad appeal and casual monetization. There are multiple examples of games that exploded in the post-ATT period:
- Royal Match
- Survivor IO (check out a great article by Matej on their launch strategy)
- Merge Mansion, etc.
Obsessive focus on Creative and bridging the gap between gameplay and Creative is what connects them. If ads with clumsy characters work, build a game around it, and you'll get Royal Match. If you're into soap operas and drama and can't resist clicking on those ads, check out Merge Mansion's backstory. If Among Us art style appeals to younger audiences, pair it with a highly engaging Archero meta, and you’ll get Survivor IO. Opportunities still exist, but we must be more intentional about how we use creative learning to unlock them.
The only constant in life (and business) is Change
What worked in the past is a thing of the past and doesn't work anymore. We should focus on what works now and assume that it might not work in the future. Product-market fit is a moving target. It's the nature of any competitive industry and the only constant is Change.
We can blame the macroeconomic environment, Apple, and its AppTrackingTransparency, or we can work harder to understand what works in the current market conditions and get the most out of it. Again, if the players are there, and the need is there, the opportunity has to be there. It is up to us to understand limitations, explore workarounds and learn how to seize them. The key is understanding the numbers behind our UA campaigns and moving fast enough to act on those learnings before the competition does.
Playrix is a great example that it can be done. An example is that games that are 5 or 7 years old can be transformed and scaled further despite the market changes, at a scale that’s nothing short of impressive.