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January 16, 2024
When it comes to measuring the effectiveness of your mobile growth initiatives, return on ad spend (ROAS) is a hard metric to top. As the summation of a publisher’s user acquisition (UA), product, and monetization efforts, it affords teams a comprehensive north star for strategic decision-making.
But when ROAS starts to slip, the response tends to be an urgent call for UA teams to “fix the funnel” by either reducing the cost per install (CPI) or better optimizing campaigns, often without sacrificing scale. As the part of the ROAS equation that grants publishers the most immediate control, this approach makes sense. Paid media’s greatest strength is, after all, the speed with which it can be adjusted, making it an ideal first line of defense against choppy waters.
But as a long-term solution to ROAS woes, it’s just not sustainable.
Dropping CPI targets while maintaining scale simply mortgages future returns as cheaper installs generate less revenue due to the value of the user acquired. Relied on consistently, it can effectively abdicate Product and Monetization teams of their outsized role in achieving ROAS targets. This is a major misstep considering the fact that the average revenue per user (ARPU) is often more heavily correlated with ROAS than CPIs.
As Appodeal product marketer Marc Llobet Rodriguez explains, “ROAS is your friend. It tells you which direction you should take with your ad creatives and why ARPUs are more related to the ROAS of your acquisition campaigns than their CPI… Even when the CPI of an acquisition campaign drops, that does not translate to higher ROAS.”
Success requires shared adoption of the flywheel growth model, which views customers as the central driving force fueling growth engines, and not simply their output. By prioritizing loyalty-centric user journeys, publishers can embrace the flywheel model, maximize the value of every install, and build sustainable portfolios capable of weathering even the most challenging market conditions.
The marketing and sales funnel has been a system used across industries to better understand how customers move through the sales cycle – through awareness, consideration, and decision stages. The system is quite linear, with prospects going in one side and coming out as customers (ideally) on the other – where they’re then “passed off” to the Product and Customer Success teams to figure out retention.
That’s the biggest weakness of the funnel model: Internal teams within publishing companies see growth as a relay race, where the baton (user) is passed around, and teams are only involved in certain segments within the race (customer journey), before they hand off the responsibility to someone else. This inevitably leads to a disjointed internal process, which in turn, can result in a disjointed experience for clients.
On the other hand, the flywheel growth model, made famous by HubSpot, supersedes the marketing funnel as it places greater value on the role that customers play in th e growth of modern businesses. Rather than forgetting about a user once they’ve been acquired, publishing teams place them at the center of their efforts – across teams and disciplines – devoting time and resources to their continued activation. In this system, the once linear journey from a prospect to a client is turned into a cycle, where teams across the organization persistently work together toward the same end goal; that is, to delight the customer and grow the business.
HubSpot unpacks the current necessity of the model, sharing how “customer referrals and word of mouth have become the largest influence on the purchase process, which means the funnel has one major flaw: It views customers as an afterthought, not a driving force… Funnels produce customers but don’t consider how those customers can help you grow.”
Instead, with the flywheel, it explains, “You can use the momentum of your happy customers to drive referrals and repeat sales.” The result is strong organic growth, fueled by the energy of your most loyal customers.
It can be a big mental shift, especially for mobile game marketers, who have historically relied on paid media for user acquisition and treated post-install engagement as something unrelated to growth. But in our own experience, as mobile app publishers with more than 30M+ downloads, we’ve found quite the opposite to be true.
User activation is the definitive key to modern growth, and as such, requires an even distribution of onus for growth across UA, Product, and Monetization teams.
“Mistplay positively benefits from all flywheel teams (UA, Lifecycle, Commercial) working together to create a cohesive and integrated strategy from start to finish, ultimately benefiting the end user.” – Gregory Pang, Director of User Acquisition, Mistplay
Putting the flywheel into practice as a mobile game or app publisher means mapping its constituent elements of attraction, engagement, and delight onto the mobile user lifecycle. Viewed through a mobile growth lens, a flywheel should resemble the following, with equal importance placed on each category:
“Another thing to note is that the Engage and Delight stages aren’t always as linear or in the same strict order every single time. For example, Product Delight could happen when we first acquire a user, with Lifecycle kicking in after, to retain and continue engaging them.” – Gregory Pang, Director of UA, Mistplay
The results driven by turning a stranger into an app promoter necessitates a steady partnership between champion teams, rather than focusing on one team alone. That’s why their participation doesn’t start and stop at specific hand-off points.
As we’ve discussed, ROAS is a partnership between all the teams, beginning with UA to drive users into the app through advertising that inspires curiosity. Lifecycle then onboards those users in a fun and interactive way that sets them up for success, and Product delivers ongoing experiences that further delight and inspire them. Each stage, team, and set of metrics are dependent on one another and are only successful if they all work together to prioritize the user.
For this reason, a more closely shared division of growth responsibility, like the user-centric one described above, is the first step in adopting the flywheel model. The second is operationalizing the interplay between all three elements, using the insights and outcomes from one to inform and direct others.
Doing so can affect what mobile games industry analyst Eric Seufert calls a virtuous cycle between product and marketing. He explains that “If marketing teams don’t consider the size of potential audiences as well as the downstream metrics that contribute to value – which, ultimately, is ROAS – then they can’t enable the virtuous cycle of Product / Marketing alignment. Additionally, if Marketing teams aren’t actually segmenting their targeted audiences in a meaningful way, which is accomplished through radical creative testing, but are instead relying solely on demographic features like geography to segment their campaigns, then they won’t be able to achieve the audience demarcation necessary to guide product updates and changes.”
The tighter the feedback loop between Product and Marketing teams, the faster a mobile product can grow. And the more organizations that impact a cultural shift toward equitable ROAS responsibility and departmental alignment, the more likely they’ll be to spot and pursue post-install opportunities for growth. These opportunities are critical when you consider the way top-of-funnel efforts have consistently had the smallest impact on true bottom-line growth.
As Patrick Campbell, founder and CEO of ProfitWell explains, “Making the distinction between growth and acquisition is important, because we’ve found that improving retention or monetization can actually affect growth 2–4x more effectively than improvements in acquisition.”
In practice, this means considering more post-install initiatives related to improving retention and combating churn, as solutions to ROAS challenges. Most effective among them are those that value loyalty.
The best way for teams to get aligned around a flywheel model is to place player loyalty at the center. Few genres do loyalty as well as mobile role-playing games (RPGs), which have pioneered many of the LiveOps, collection, and in-app marketing strategies now considered some of the most effective loyalty program elements available to publishers.
Mobile RPG titles like Genshin Impact, Monster Strike, and Evony: The King’s Return are all top-grossing chart mainstays, and with good reason. Mistplay’s 2023 Mobile Gaming Loyalty Report identifies mobile RPG gamers as being the most loyal players overall, scoring higher than any other genre analyzed – while also fostering some of the highest average purchase values, session durations, and repeat purchase rates. It’s this commitment to loyalty that has allowed many of the genre’s top titles to remain consistently popular and profitable.
The outsized value of player loyalty for mobile growth is an idea we’ve talked about before, and it’s the core assertion that drives Mistplay’s own success; a genuine belief that in order for publishers to add momentum to their flywheel, they need to be asking “Will this result in a more loyal user base? Will it produce product evangelists? Does it foster joy in my players?”
Any solution that allows departments to prioritize personalization, deep-funnel engagement, and active user relationships is a safe bet. And while “loyalty” can take many shapes depending on your app’s design, we’ve found that a few engagement and monetization metrics make ideal proxies for what can often be a bit of a mercurial concept.
When it comes to engagement, D30 retention gives a sense of engagement quantity, with average session count and duration helping to paint a picture of the quality of user engagement. This hinges on how deeply users have integrated your product into their daily routines. On the monetization side, the share of spenders by D30 is our quantitative metric, with repeat purchase rates and average purchase value illustrating the total value that your users are getting out of IAPs; value that is tightly tied to flywheel momentum.
And while the flywheel may still be a relatively new concept for mobile marketers, it’s one with benefits that have been historically lauded, at least in abstract, by industry pundits. In discussing the objective cost of undervaluing existing customers, Seufert explains how, “Many people consider a ‘leaky bucket’ to refer specifically to the onboarding funnel, but in reality, user churn is more expensive later-stage than during the onboarding process… Losing the user with a year of tenure is more damaging to the business than losing the early-stage user because of that proven affinity and acquired behavioral data.”
When followed to its natural conclusion, this line of thinking points to the growing necessity of the flywheel model in order to make the most of every install. And that, above all else, requires loyalty.
👀 Related reading: What players want: Play, spend, and loyalty trends for mobile gaming in 2023
Embracing the holistic nature of ROAS, as reflected by an effective flywheel, is the best way forward for mobile publishers. We’ve built Mistplay with this in mind.
Our AI-powered recommendation algorithms align players with the types of experiences they’re most likely to enjoy, before incentivizing them with continuous offers, rewards, and events, to keep them engaged throughout their lifecycle. This deeper relationship between Mistplay, your players, and the games they love creates a virtuous cycle that builds loyalty and engagement, and further fuels your flywheel.
Want to learn more about how Mistplay is helping UA and Product teams work together to achieve their shared growth goals? Reach out to our experts today.
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