Retention: A Key Growth Factor For Your Gaming App In 2020

Being a gaming app marketer is tough! Steering the ship through a maze of looming deadlines, dwindling budgets, aggressive KPI’s and all sorts of other hurdles, there are just way too many challenges to deal with. Marketers are embroiled in a constant battle and retention is right at the top of the list. And for good reason. It isn’t a secret that the word “retention” gives many a marketer sleepless nights. If your user retention in the gaming app isn't enough, the likelihood of turning a profit is zero, zilch, nada, you get the point.

What is Retention?

The two most common methods to define retention are hard retention and rolling retention.

Hard retention is the most conventional method of observing retention trends. You look at users who have returned exactly 1, 3, 7, etc. days after installing your app. The fast-paced industry that gaming is, companies prefer to look at hard retention as both an internal metric, and one for comparing to industry averages.

Rolling retention involves looking at the number of users who returned on or after day 7. Mostly observed by gaming companies who do not necessarily expect their players to play every day, but maybe just on weekends?

Whatever definition floats your boat, the cardinal rule remains that retention and only retention leads to profitability and success for a gaming app.

The Chasm Between Your Acquisition and Retention Strategies

The conundrum that marketers find themselves in today is the obvious need to rank high on the Android Play Store and Apple App Store (aka raking in a million+ installs) and the oh-so-even-more-obvious need to retain the users they bring in. But, there’s only so much you can do with the marketing budget at your disposal, and the goal that’s been given to you dictates where your priorities lie in this treacherous dichotomy. Spending tens of thousands of dollars on user acquisition might get your app ranking up, but in the long run, it just isn’t sustainable. No matter how deep your company’s pockets are, you’re bound to run out of the dough at some point and start looking at efficiencies. The average for Day 30 retention in the gaming app industry rates is 2-4%, that’s unbelievably low and despite that abominable ratio, companies continue to focus on their upper funnel volumes.

However, while we see a majority of gaming companies focus their spending on user acquisition, there are a handful of evolved companies that maintain a fruitful balance between user acquisition and retention strategies.

Let’s put things into perspective, shall we?

We (at RevX) run both user acquisition and app retargeting campaigns for our advertisers. So if there was ever an expert on the dilemma of what function was more important than the other, we’d bank on ourselves to be one. RevX sits on a wealth of user data, which gives us the leverage to look at trends and draw conclusions. So, when we looked at the rate of retention in the gaming app advertisers (who don’t run retargeting - not just with us, but across the board), this is what we saw:

User Retention (without retargeting campaign) in the gaming category app
User Retention in the gaming app category (without retargeting campaign)

No surprises here, the retention rates in the graph above follow the industry averages. Marketers with a keen eye who know their numbers well, will notice a marginal increase in retention rates in the graph above against industry averages, and we owe this to our precision targeting and machine learning algorithms - but, that’s a discussion for another day.

Next, we looked at retention rates of apps who run both user acquisition and retargeting, and this is what we saw:

User Retention in the gaming category apps
User Retention in the gaming category

What’s evident is the significant uptick that companies doing retargeting observed. While user acquisition is essential in filling up your upper-funnel, your mid-funnel and lower-funnel require constant nourishment as well and this can be done through re-engagement campaigns.

Incremental Lift

We also ran studies on the incremental lift to prove that retargeting your minnows, dolphins, and whales would lead to incremental revenue. We used the ghost bidding approach to divide all paying users (users who made at least one purchase in the past) into a control group (who were never shown any ads) and an exposed group (who were shown ads). The lift we saw in the exposed group was no surprise to us and is a testament to the impact retargeting can have on your business.

ARPPU increase with retargeting ads

Retargeting Adoption Among Gaming Apps

The State of Gaming App Marketing by Appsflyer mentions “Perhaps the biggest miss for gaming apps this year (2019) is retargeting.”

The report goes on to say, “The value of retargeting for non-gaming categories whose sole purpose for users is making purchases is clear. The purpose of a game is to play rather than to buy, but when taking into account a) retention struggles, b) the much lower cost of retargeting vs. UA, and c) the advanced utilization of data among gaming apps to generate ROAS from UA, the fact that so few are running retargeting is somewhat surprising.”

Apps running retargeting campaigns (2017-2019)

The Lowdown: Why Invest in App Retargeting?

Let’s take a minute to understand the benefits of running retargeting campaigns in today’s hyper-competitive landscape:

Retention remains a challenge: From our recent data study, we found that, while non-organic retention increased by around 20% in 2019, day 30 retention of organic users only increased by about 5%. Inorganic retention rates continue to be in dire straits reaching only 2-4% on day 30.

User acquisition costs rising: The reality today is that it costs marketers more money to acquire new users for their app than retain existing users. Although not exactly an apples-to-apples comparison when we compare CPI and CPC, the cost to acquire a user is 5-10x more expensive than the cost to re-engage a user. Appsflyer’s adoption trend analysis for 2019 shows us that roughly 1 in every 10 gaming marketers in 2019 increased retargeting at the expense of UA, and we predict this will continue as the industry continues to evolve.

Accessibility of advanced measurement infrastructure: Before turning to the increasingly sophisticated marketing analytics tools, it’s also important to recognize the evolution of marketers, and the mobile ecosystem at the core of it all. While technology has allowed for richer analyses and better measurement, improved data-driven skills among marketers can also be credited with sharper segmentation and more effective retargeting efforts.

Availability of more robust segmentation tools: With increasingly more advanced segmentation tools at their disposal like RevX’s audience segmentation feature, marketers can drill down into their app’s unique audience segments to see which users deliver the greatest revenue and which are most likely to churn, among others. That way, they can avoid overwhelming the wrong users with retargeting ads and focus only on those with the greatest potential.

Machine Learning to the rescue: Artificial Intelligence inbuilt into marketing software, constantly strives to improve efficiencies of retargeting campaigns. RevX’s proprietary machine-learning algorithm “Intellbid” ingests data about user behavior on and off the app and uses this data to gauge the user’s propensity to perform an action (register, re-engage, transact, etc.)

Performance: Based on the data we’ve presented to you, it is clear that retargeting positively influences not only the revenue from your users but also the stickiness of your app.

Similar reads: Video Retargeting Ads – Optimizing Your Campaign For Success

In a hyper-competitive landscape like gaming, long term success depends on stickiness. Of course, it's the dynamics of the game that is the defining factor of how likely you are to retain your users, but there's nothing stopping a competitor from building a similar (or better) app and stealing all your users from you. Retargeting your users will ensure your game stays top of the mind, improve loyalty, retention, and ultimately lead to more paying users.

Want to see how the RevX mobile programmatic platform can help in boosting retention in the gaming app for you? Book your test campaign now, by reaching us as marketing@affle.com.

Abhay Das

Abhay leads RevX's business in international markets. He's an ad-tech aficionado with prior stints at ad-tech giants like media.net and Yahoo! In his free time he likes to write about technology, startups and football.

Looking for an all in one solution to grow marketing?