Adinnovation. Inc: Road To Japan – How To Do Marketing of Japanese Gaming App Market


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Overview of Japanese gaming app market. How lucrative it is and what kind of games are currently popular. General ways of promotion, how to run promotion campaigns, example of Clash of Clans.

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  • Hello everyone, I’m Aya, overseas business representative of Tokyo-based Adinnovatino Inc.
    I’m here today to talk about how to promote your app in Japanese market, titled as ‘ROAD TO JAPAN – The most lucrative gaming app market in the world’, from marketing perspective.
    I’m sure it’s everyone’s favorite discussion topic, but I promise over the next 30 minutes you will learn a lot and might even have fun.
  • Before I start, I want to highlight exactly what I will provide for you today. First, I will quickly introduce my company and myself, and then explain about the overview of Japanese smartphone market. Also, I will talk about the current mobile advertising in Japan, and give you practical information with the example of Clash Of Clans, which is the world big hit gaming app.
  • So, ‘About Us’.
  • Adinnovation Inc. is the leading marketing firm for smartphone apps, which carry out ad-agency business, app publishing support and analytics solution tool. The company was established 4 years ago and have worked with over 1,000 apps so far. Our office is located in the center of Tokyo, so mainly we are doing business for Japanese customers and Chinese gaming app developers.
    Currently expanding our business to overseas market as well.
  • I’ve joined Adinnovation last year, as an overseas business representative of Business Development Section. So I will support anything relevant to marketing, ad-sales, app publishing in Japanese market, if you are going to Japan.

    I used to be an web application engineer and QA for eBook products in Rakuten, which is the Japanese e-commerce giant, since the acquisition of Kobo, Toronto-based ePublishing company.
  • Now, let me explain about the overview of Japanese smartphone market.
  • According to the tracking firm AppAnnie, Japan has surpassed US market in terms of the revenue of gaming apps from Oct 2013. As you see, spending on apps in Japan has grown rapidly with the country spending 40% less than the US only a year ago.

    Also when DISTIMO compared ARPD, Average Revenue Per Download, with average Cost Per Install, it concluded that Japan is the most revenue potential market, because of the highest profit of 4.48 USD per download. Means, currently Japan is the most lucrative and fast-growing app market in the world.
  • Apparently this is because of the huge hits of gaming apps.
    Puzzle and Dragons, the leading puzzle game, has exceeded 26 million downloads, as of March. It is also said that their monthly estimated operation profit is about 100 million USD.

    Just for your curiosity, I’ve listed the top ranked gaming apps’ icons here.
    They are mostly categorized as ‘Free-to-play’ apps. Also Japanese user tend to pay more for in app purchases rather than paid installs.

    As you see, all of them use animated characters. Puzzle & Dragons, some puzzle games from LINE, Quiz RPG, kicking game with a princess, baseball simulation game, and music RPG with cute high school girls are popular now.
  • This graph shows the popular game categories among Japanese users.
    Obviously ‘Puzzle’ games are most popular with 62% of players, and RPG and Table board are following it with about 20% of votes. Hot apps, such as Puzzle & Dragons, are mainly categorized in these groups.
  • What about the market size itself?
    For smartphone games in Japan, it’s almost doubled last year, reaching 5.4 Billion USD in total sales. Means, it increased 178% over the 3 Billion USD earned in the previous year.
    Apparently, smartphone games now account for 50% of the entire games market in Japan. See, the market size including all software & hardware was worth 10.8 Billion. In this context, Consumer Games was only 20% of the total.
  • For the gaming app engineers and product managers, I brought a topic about Japan’s gaming development.
    From 2012, the total number of native application is gradually increasing. Browser games also keeps its position relatively constant in the market, but as you see on the slide, native app is getting more popular now, with 3.12 Billion USD market share.
  • However, that might be a great news for those who are interested in Japan, but the market is not fully matured yet.
    Only 54% of the mobile users, which is about 69 million people, had already shifted to Smartphones, but others are still using feature phones.
    Means, Japanese Smartphone industry still have potential for high growth.
  • Let me introduce market share of smartphone OS and mobile network carriers. In Japan, there are 3 top carriers such as NTT docomo, au, and Softbank. The graph shows the share of iPhone vs. non iPhone, which is the Android based phone. You can see 40% of mobile subscribers have iPhone.
    Since iPhone is the most popular device in all carriers and Android phone is also well-used rather than iPad/Android tablets, we tend to play game on our smartphones.
  • Basically, Japanese mobile users are trained to pay for digital content, based on the monthly subscription model for feature phones. For example, in 1999, all 3 carriers had released mobile internet service and it was the beginning of the digital consumption on feature phone in Japan. Then in 2011, Japanese users paid 6.4 Billion USD for the contents such as wall paper, decorated email, ringtones, browser games and comics.
    Then, the business model of carriers are changed dramatically in Japan by the increase of smartphone users. Now all carriers provides apps for smartphone with monthly subscription model in their individual market, with all-you-can-download-system. This is based on their history of selling digital contents from the feature phone era. So users can download apps via AppStore, Google Play in addition to the carriers’ market.
  • Now, let me talk about the mobile advertising in Japan.
  • To get reached to actual users for your games, running ad campaign is the most-frequently-used way.
    This explains that smartphone ad in Japanese mobile market has grown in 2013, up 193% from the previous year.
    This was because of the development and release of LTE, high-data-transmission by main carriers, facilitated the demands for digital contents such as movies, eBooks, music and games.
    Indeed, service providers which were not focusing on smartphone, like e-commerce operator, finance, real-estate, gradually have demanded marketing and ad campaign for smartphone.
  • Here is the same graph divided by items.
    In 2013, the market size of display ad reached 6.4 Hundred Million USD, up 275% from previous year, getting about 40% of total.
    Growth is not to stop among others. Paid Search was worth 8.4 Hundred Million USD and Performance Based was 1.4 Hundred Billion USD, an increase of about 130% over.

    There are several reasons of this growth. About Paid Search, this is the result of the release of new feature that distributes ads to multiple media formats and applications at all once. So the advertisers that usually run ads for PC had started to put them on the smartphone as well. Display was driven by the advertisers who wanted extensive user acquisition, such as retailer of finance, real-estate, eating-out industry, e-commerce, or gaming app developers from out side of Japan.
    Performance Based was chosen by Japanese gaming app developers. Currently, an Incentivized Ad that called REWARD, is commonly widely always used. Because it is positively considered as a way to acquire users in a short time, boost up their app in the ranking of the stores, get exposed, then have great results in the medium and long terms, in terms of ROI.
  • In this way, there are 3 types for smartphone ads. Here is the question for you. Which one would be the best when you promote your gaming app in Japan? So please follow my logic here. You should do all of them.
    However, especially for iOS, recently REWARD is on fire. Because Reward let users download your app, generates a bulk of downloads in a short time, so the app is ranked top in the Appstore.
  • This is the general scheme of Reward.
    If you are a user, out of coins to continue to play the App game, but you don’t want to pay real money for it, what you can do?
    You will jump in to the Ads page, and click the Ad banner.
    The Ads instruct you to download an App or do a member registration in order to earn the virtual coin.
    After the transaction is completed, you can get the coin to continue playing the game, for free.
    So it’s kind of a new method to give users ‘Rewards’ like virtual money that can be used in your game, depending on the result of user’s reaction. Technically ad servers tracks those users attribution with several ways, such as a tracking SDK, Cookie, or device finger printing.
  • This table shows the required number of downloads and estimated organic user numbers after the Reward for AppStore.
    From our experience, to be ranked in Top 1 to 5 in Japan region, you need to get 40 Thousand to 80 Thousand downloads per app within 2-3 hours. Then you will get about 4000 to 20 Thousand organic users per day.

    Japanese gamer, as you might have heard or not, we really likes to play the games that are authorized in the TOP ranking. So when your app gets high, organic install is triggered. That’s why Japanese developers uses Reward to acquire iPhone users, which is considered as the main in Japan.
    For Android, the logic of ranking is quite different from this.
  • There are several advantages for each of the people concerned about the Reward Ads. For Advertisers:
    In order to acquire new users, you don’t have to pay with CPC or CPI which includes non-conversion actions, because basically the reward ad is the conversion basis model. So it can be called as a low risk user acquisition method.
    You can boost up your app in the ranking of the stores. In Japan, gaming app users tend to see the daily rankings to find out a new game to play with. So if the game is listed in a high position, they recognize your game is authorized with other gamers and they start to play. As a result, you’ll surely be a winner in the rankings and get another waves of downloads as a organic installs.
    For Media Operators:
    You can enkindle your media with thousands hundreds of new users. Some of the smartphone app media is struggling to get accessed, but this should be a deal.
    So your media would be get exposed for non-purchase users.
    For App Users:
    Yes, there is no doubt that they can keep playing with your app, for FREE!
  • As a conclusion for the marketing part, Strategy is quite important to get engaged with Japanese users.
    Just releasing your app in Japanese market is not going to solve the promotional problems, however, just running ad campaign also cannot be the solution.
    So, Analytics for ad effectiveness plays an increasingly significant role in your sales. Only after the whole life-cycle with Promotion, Monetize and Analytics, you will find out the complete monetization process of your app. It also allows you to figure out a next move quickly, because you can see users’ behavior and reaction.
    Currently, top 3 companies such as Cyber Agent, Adways and us, Adinnovation, provide tracking & analytics tool in order to support your business. It’s considered quite necessary to use the tools specialized to analyze the effectiveness of campaigns.
  • With the idea of promotional cycle, see, you are just in time for expanding your business into Japan.
  • Here is the familiar example of Clash Of Clan’s campaign for iOS, right after the release in June 2013 for Japan.
    ーThey distributed Reward Ad to acquire a number of users in a short them.
    ーAs you see on the Store Stats reported by App Annie, they got #1 within 24 hours.
    ーAt this moment, it was ranked within top 20 in the grossing ranking as well.
    Means, they succeeded to get numbers of users who are certainly engaged with their title.

    In this case, their estimated revenue of this month was about 2 million USD.
    Cost to boost up the app was estimated about 50 Thousand USD as average, so they finally recovered the cost.
    (1.2 USD * 40 Thousand – 60 Thousand DL = 48 Thousand – 72 Thousand.)
  • Now, their variety ads saturate our daily lives appealing characters, methods, and idea of the game, because it became one of the hit title in Japan, just same as Russia.

    About banners, some of them contains buzz terms, others shows the picture of ancient Samurai, Napoleon Bonaparte, or a beautiful Japanese girl smiling with beards.
    Also, an wall in the station at Shibuya was jacked by Barbarian’s picture. Shibuya is the center of the fashion and so many train lines crosses there that tens of thousands of passenger walks there each day.
    Strategy guides on review websites are also necessary because Japanese users google the information about actual play methods the more they plays it often.
  • If you think that is too much, what about to start with to be in Top 100?
    Ofcourse initial investment will be hold down, and it is said that estimated monthly revenue would be about 10 Thousand USD.
    This is the monthly ranking of AppStore that I captured last week. See, some of the titles are published by non Japanese developers.
  • Let me conclude my session.
  • As the upshots of today, I’ve highlighted the main points of today’s presentation.
  •  As I bring my session to a close, I once again thank you for allowing us to be here today and hope that this has given you a much clearer understanding of how to penetrating into Japanese market with your app.  
    I would be very happy to help you, so don’t hesitate to contact me anytime you want.
    Also, I would welcome the opportunity to return with other tips and tricks to present in the near future.
  • Adinnovation. Inc: Road To Japan – How To Do Marketing of Japanese Gaming App Market

    1. 1. Aya Yamada Overseas Business Representative at Adinnovation. Inc.
    2. 2. 1. About Us 2. Overview of Smartphone Market In Japan 3. The Mobile Advertising in Japan 4. So now, it’s your turn.
    3. 3. About Us
    4. 4. Leading Marketing Firm For Smartphone Apps Mar, 2010 Established Jul, 2013 Raised $1.6 million USD Jan, 2014 Partnered with Digital Advertising Consortium We have over 1,000 applications of experiences as of Apr 2014. Contacts:
    5. 5. Aya Jennifer Yamada Overseas Business Representative at Adinnovation. Inc Business Careers Apr, 2011 Rakuten, Inc. Web application engineer QA & localization for Kobo, Toronto-based eBook company Nov, 2013 Adinnovation, Inc. Business development, marketing and sales representative from overseas to Japanese market
    6. 6. Overview of Smartphone Market In Japan
    7. 7. 0 50 100 150 200 250 300 350 400 OCT, 2012 OCT, 2013 INDEXEDREVENUE COMBINED IOS APP STORE & GOOGLE PLAY MONTHLY APP REVENUE Japa US South Korea UK #1 Market In The World Source:
    8. 8. Because Of Gaming Apps Source: Free-to-play >>> Paid Apps In App Purchase >>> Paid Install Puzzles and Dragons 26 Million Downloads* 100 Million USD /month ** * Total ** Estimated OP
    9. 9. Puzzle Table Board RPG Educational Action Simulation Mini Games Collectible Card Others Sports Strategy 10s 20s 30s 40s 50s Popular Game Genres Source: 62% 23% 22%
    10. 10. Bigger Than Consumer Game Market Source: $9.6 $10.8 $3.0 $5.4 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 2012 2013 All Games (incl. S & H) Smartphone Games (Billion USD) + 178% YoY Consumer Games 2.5 Billion USD
    11. 11. Native Apps Vs. Browser Games Source: $1.31 $3.12 $4.20$1.70 $2.25 $2.25 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 2012 2013 2014 Market Size Of Smartphone Gaming App (Native Apps Vs. Browser Games) Native Apps Market Browser Games Market (Billion USD) + 237% YoY + 133% YoY
    12. 12. Coverage Is Growing Source: 73.7 68.4 59.8 54.1 46.0 41.9 18.9 27.0 34.7 40.2 49.2 54.0 0.0 20.0 40.0 60.0 80.0 100.0 120.0 Aug, 2011 Feb, 2012 Aug, 2012 Feb, 2013 Aug, 2013 Feb, 2014 OWNERSHIP OF FEATURE PHONE/ PHS VS. SMART PHONE Feature phone & PHS Smartphone (%) = 69 million users
    13. 13. 40% Of Them Uses iPhone Source:
    14. 14. Based On The History Of Monthly Subscription As Feature Phone Purchase Ringtone Games Comics Source: 2008 2009 2010 2011 4.7 5.4 6.2 6.4 Wallpaper Decorated Email (Market Size Of Digital Contents, Billion USD)
    15. 15. The Mobile Advertising In Japan
    16. 16. Source: Smartphone Ads in Japanese Mobile Market $0.84 $1.62 $2.26 $2.70 $3.00 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 2012 2013 2014 2015 2016 THE MARKET RESULTS AND PREDICTION OF JAPAN’S SMARTPHONE AD MARKET +193% YoY (Billion USD)
    17. 17. Smartphone Ads in Japanese Mobile Market Source: $5.0 $8.4 $12.3 $14.9 $16.5 $2.3 $6.4 $8.5 $10.1 $11.2 $1.1 $1.4 $1.7 $2.1 $2.3 $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 2012 2013 2014 2015 2016 The Market prediction of Japan’s Smartphone Ad market (By Items) Paid Search Display Performance based (Affiliate + Reward) (Hundred Million USD) +275% YoY
    18. 18. Which one is the most significant for gaming app developers? ? Paid Search Ad Display Ad Performance Based Ad (Affiliate + Reward)
    19. 19. What is ‘Reward’ Ad? Ad Server Source: AppInstall this app = 50 Pts! YES NO Game App 50 Pts Media Ad Banner Ad Banner Ad Banner
    20. 20. Reward is on FIRE now Authority 権 威 Number Of Downloads 1 – 5 40,000 – 80,000 / 2-3 hours 6 – 10 20,000 – 40,000 / 2-3 hours 11 – 20 15,000 – 25,000 / 2-3 hours 21 – 50 5,000 – 15,000 / 2-3 hours 51 – 100 3,000 – 8,000 / 2-3 hours 100 - – 40,000 / 2-3 hours Required DL Number For Ranking Of AppStore Number Of Est. Users 1 – 5 4,000 – 20,000 / day 6 – 10 3,000 – 15,000 / day 11 – 20 2,000 – 10,000 / day 21 – 50 1,000 – 5,000 / day 51 – 100 500 – 15,000 / day 100 - – 500 / day Estimated Organic User Number After Reward Campaign
    21. 21. Why ‘Reward’ Ad? Media Ad Banner Ad Banner Ad Banner App App App App App App App App App 50 Pts! Advertisers (= App Developers) Media Operators App Users • CV bases fee model =Low risk user acquisition • Boost up your app in the stores • Enkindle your media • Get opportunity to monetize with non- purchase users • Earn the virtual money to play the app
    22. 22. Be Strategic To Get Japanese Users Promotion MonetizeAnalytics
    23. 23. SO NOW, IT’S YOUR TURN.
    24. 24. Example Of Clash Of Clans - Rewards Source: #20 -> #1 #1 At Free Charts #20+ At Top Grossing within 24 hrs Estimated Revenue Of #1 - #20 / month 2 Million USD (200 Million JPY)
    25. 25. Eye-catchy Digital Ads Wall Jack In Shibuya Sta. Example Of Clash Of Clans – Other Ads Strategy Guides
    26. 26. Or ‘Small is the new Big’ Source: 100,000 USD + per month, per title, ranked within #100
    27. 27. In Conclusion,
    28. 28. Smartphone Market ・#1 in the world because of gaming apps. ・Smartphone’s market share is still expanding. Gaming Apps ・Casual Free-to-start > Paid Apps ・In App Purchase > Paid Installs Smartphone Ads ・Still rapidly growing with general ways. ・Reward ad is on FIRE. Promotion Methods ・Promotion, Analytics and then Monetize. ・Be strategic. Upshots Of ‘RTJ’
    29. 29. Contact Us! y/adinnovation-inc-