Cash = Community * Context * Content * Currency Martin Szugat, SnipClip GmbH
Tomorrow is Now. Sharing.  Gaming. Web 2.0 Post Web 2.0
Funware: Design for Fun!
Agenda
VIRTUAL GOODS <ul><li>GOLD RUSH on the INTERNET: </li></ul>
More with Less
Definition <ul><li>Characteristics  of Virtual Goods: </li></ul><ul><li>Rivalry </li></ul><ul><li>Persistence </li></ul><u...
Digital vs. Virtual Goods
Business Models Non Branded Branded Sponsored Paid User-generated Farm- Ville Virtual Greats SnipClip Second Life
 
Example A: Nestle Toll House <ul><li>Two week-long period </li></ul><ul><li>over 1.1 million gifts sent </li></ul><ul><li>...
Example B: Malibu Rum <ul><li>Two week-long period </li></ul><ul><li>over 1 million gifts sent </li></ul><ul><li>7% click ...
Users Love Brands.
User-generated Targeting
Value Chain (Paid Goods)
CASH = COMMUNITY * CONTEXT * CONTENT * CURRENCY <ul><li>SECRET FORMULA: </li></ul>
1) Community (Maslow)
2) Context Hedonic Functional Social
Do you want to play a game? Social Context + Casual Gaming = Social Gaming
3) Content
4) Currency
Payment Methods
Virtual Goods Strategy
Jumping the Shark
3R-Metrics
Comparison of Virtual Goods Virtual Worlds Social Games Social Networks Average Revenues per Monthly Active User per Year ...
ARPPU accross different genres
ACQUISITION, ACTIVATION, RETENTION, REFERRAL, REVENUE <ul><li>PIRATE METRICS for STARTUPS: </li></ul>
AARRR!!!!! Acquisition Retention Referral Revenue
Acquisition
Activation <ul><li>When is an user an active user? </li></ul><ul><li>… </li></ul><ul><li>Caution: </li></ul><ul><li>Facebo...
Retention
Stickiness
Referral k-Factor = Number of Invites * Acceptance Rate k-Factor > 1    Viral Growth  
Invite Success Factors <ul><li>Volume  (# of friends invited): the more friends invited, the less success per invite </li>...
Main Learnings <ul><ul><li>“ Just 10% of users account for 50% of successful invites.” </li></ul></ul><ul><ul><li>“ It is ...
Stickiness, Virality and Churn
Revenue Age ARPPU 15 $2.65 18 $2.92 22 $2.82 25 $2.99 29 $3.33
Most important: <ul><li>User Acquisition Cost < Lifetime Network Value </li></ul><ul><li>[Approx.: 1/(1-k) * ARPU * User L...
FUNNELS AND TESTS <ul><li>TOOLS: </li></ul>
Metric-Driven Design    Funnel Analysis    A/B Split  Testing <ul><li>Trial & Error </li></ul><ul><li>Copy & Adapt </li>...
Viral & Engagement Loops Active User
PRODUCT PLANNER <ul><li>www.productplanner.com </li></ul>
MIXPANEL <ul><li>www.mixpanel.com </li></ul>
KONTAGENT <ul><li>www.kontagent.com </li></ul>
Reading
www.Helden-der-WM.de <ul><li>http://sammelco.de/webinale   </li></ul>
Talk to me. <ul><li>Martin Szugat </li></ul><ul><li>Email:  [email_address] </li></ul><ul><li>Web:  www.snipclip.com </li>...
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Cash = Community * Context * Content * Currency

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How to monetize your social app / game with sponsored or paid virtual goods and how measure and optimize your success.

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  • http://andrewchen.typepad.com/andrew_chens_blog/2008/05/when-facebook-a.html
  • http://www.bretterrill.com/2008/10/game-design-lessons-from-evolutionary_20.html
  • http://www.socialtimes.com/2010/03/the-economics-of-facebook-games/?utm_source=feedburner&amp;utm_medium=feed&amp;utm_campaign=Feed%3A+socialtimes+%28SocialTimes.com%29&amp;utm
  • http://www.insidesocialgames.com/2009/11/04/how-big-social-games-maintain-their-sticky-factors/
  • http://www.insidesocialgames.com/2009/11/04/how-big-social-games-maintain-their-sticky-factors/
  • Cash = Community * Context * Content * Currency

    1. 1. Cash = Community * Context * Content * Currency Martin Szugat, SnipClip GmbH
    2. 2. Tomorrow is Now. Sharing. Gaming. Web 2.0 Post Web 2.0
    3. 3. Funware: Design for Fun!
    4. 4. Agenda
    5. 5. VIRTUAL GOODS <ul><li>GOLD RUSH on the INTERNET: </li></ul>
    6. 6. More with Less
    7. 7. Definition <ul><li>Characteristics of Virtual Goods: </li></ul><ul><li>Rivalry </li></ul><ul><li>Persistence </li></ul><ul><li>Interconnectivity </li></ul><ul><li>(Fairfield) </li></ul>
    8. 8. Digital vs. Virtual Goods
    9. 9. Business Models Non Branded Branded Sponsored Paid User-generated Farm- Ville Virtual Greats SnipClip Second Life
    10. 11. Example A: Nestle Toll House <ul><li>Two week-long period </li></ul><ul><li>over 1.1 million gifts sent </li></ul><ul><li>3% click rate – Facebook banner ads: 0.02% to 0.04% </li></ul><ul><li>17% lift in purchase intent </li></ul><ul><li>Source: AdNectar, 2009 </li></ul>
    11. 12. Example B: Malibu Rum <ul><li>Two week-long period </li></ul><ul><li>over 1 million gifts sent </li></ul><ul><li>7% click rate </li></ul><ul><li>9% increase in brand favorability </li></ul><ul><li>Source: AdNectar, 2009 </li></ul>
    12. 13. Users Love Brands.
    13. 14. User-generated Targeting
    14. 15. Value Chain (Paid Goods)
    15. 16. CASH = COMMUNITY * CONTEXT * CONTENT * CURRENCY <ul><li>SECRET FORMULA: </li></ul>
    16. 17. 1) Community (Maslow)
    17. 18. 2) Context Hedonic Functional Social
    18. 19. Do you want to play a game? Social Context + Casual Gaming = Social Gaming
    19. 20. 3) Content
    20. 21. 4) Currency
    21. 22. Payment Methods
    22. 23. Virtual Goods Strategy
    23. 24. Jumping the Shark
    24. 25. 3R-Metrics
    25. 26. Comparison of Virtual Goods Virtual Worlds Social Games Social Networks Average Revenues per Monthly Active User per Year $0.37 $3.56 $8.23
    26. 27. ARPPU accross different genres
    27. 28. ACQUISITION, ACTIVATION, RETENTION, REFERRAL, REVENUE <ul><li>PIRATE METRICS for STARTUPS: </li></ul>
    28. 29. AARRR!!!!! Acquisition Retention Referral Revenue
    29. 30. Acquisition
    30. 31. Activation <ul><li>When is an user an active user? </li></ul><ul><li>… </li></ul><ul><li>Caution: </li></ul><ul><li>Facebook, MixPanel, Kontagent, etc.: </li></ul><ul><li>Active User = One-Time Visitor … WTF?! </li></ul>
    31. 32. Retention
    32. 33. Stickiness
    33. 34. Referral k-Factor = Number of Invites * Acceptance Rate k-Factor > 1  Viral Growth 
    34. 35. Invite Success Factors <ul><li>Volume (# of friends invited): the more friends invited, the less success per invite </li></ul><ul><li>Pacing (time between invites): invitations that are more spread out in time are more likely to succeed </li></ul><ul><li>Repetition (# of invites to a friend): higher number of invites represent a higher chance of success </li></ul><ul><li>Selectivity (number of invites per invite session): users who invite friends individually tend to have a higher yield, possibly because they target their invitations to those who are more likely to accept. </li></ul><ul><li>Demographics : no correlation: influential inviters are distributed randomly across various demographics with the exception of age: we observe that being older does confer a bit more authority and influence. </li></ul><ul><li>Ego-network profile (structure of friends):high friend count means weaker connections and lower overall success rate </li></ul><ul><li>Gamer activity : the longer they play, the more invites they send </li></ul>
    35. 36. Main Learnings <ul><ul><li>“ Just 10% of users account for 50% of successful invites.” </li></ul></ul><ul><ul><li>“ It is puzzling that the shape and density of one’s FB network has little predictive power. A possible explanation is that these networks can be largely static and do not reflect the level of interaction between friends.” </li></ul></ul>
    36. 37. Stickiness, Virality and Churn
    37. 38. Revenue Age ARPPU 15 $2.65 18 $2.92 22 $2.82 25 $2.99 29 $3.33
    38. 39. Most important: <ul><li>User Acquisition Cost < Lifetime Network Value </li></ul><ul><li>[Approx.: 1/(1-k) * ARPU * User Lifetime] </li></ul>
    39. 40. FUNNELS AND TESTS <ul><li>TOOLS: </li></ul>
    40. 41. Metric-Driven Design  Funnel Analysis  A/B Split Testing <ul><li>Trial & Error </li></ul><ul><li>Copy & Adapt </li></ul>
    41. 42. Viral & Engagement Loops Active User
    42. 43. PRODUCT PLANNER <ul><li>www.productplanner.com </li></ul>
    43. 44. MIXPANEL <ul><li>www.mixpanel.com </li></ul>
    44. 45. KONTAGENT <ul><li>www.kontagent.com </li></ul>
    45. 46. Reading
    46. 47. www.Helden-der-WM.de <ul><li>http://sammelco.de/webinale </li></ul>
    47. 48. Talk to me. <ul><li>Martin Szugat </li></ul><ul><li>Email: [email_address] </li></ul><ul><li>Web: www.snipclip.com </li></ul><ul><li>Twitter: http://twitter.com/snipclip </li></ul>

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