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ROI and the K-factor - Jonathan Winters

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Presentation delivered during the Adjust Mobile Spree Event by Jonathan Winters (from Miniclip)

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ROI and the K-factor - Jonathan Winters

  1. 1. ROI AND THE K-FACTOR: MEASURING VIRAL VALUE-ADD June 2017
  2. 2. Before we start… Who is that?  Head of User Acquisition at Miniclip  Leading all UA activities for mobile games portfolio About Miniclip  Developer and Publisher for Mobile Games  Popular for Casual Sport Multiplayer Games and .io Games © Miniclip – Jonathan Winters 2
  3. 3. 8 Ball Pool – Competitive and Social © Miniclip – Jonathan Winters 3
  4. 4. We are not just ‘buying’ single users. Those users are people with their own social networks. (At least most of the time.) © Miniclip – Jonathan Winters 4
  5. 5. Viral Growth in the App Economy © Miniclip – Jonathan Winters 5 App Invites • In-app benefits • Discounts • Free Content Social Media • Social Trend • Viral Post • Influencer Word of Mouth • Talking to Friends • Recommendation • Chat Groups App Growth = Organic + Paid (+ Virality) Discovery • App Store • Search • Top Charts Examples
  6. 6. What makes an App viral?  Easy to access  Recognisable  Effortless transfer to others  Integrates existing communication channels  Sharing has meaning  Triggers motivation © Miniclip – Jonathan Winters 6
  7. 7. Viral Effects influence the performance of paid Acquisition. © Miniclip – Jonathan Winters 7
  8. 8. ROI Calculation – Example © Miniclip – Jonathan Winters 8 CPI Installs IAP LTV Ad Rev LTV D180 ROI Campaign A $3.50 22,500 $2.80 $0.30 -11% Campaign B $3.20 14,000 $2.70 $0.30 -6% Campaign C $3.90 23,100 $3.00 $0.30 -15% Free-to-Play Game Measuring ROI on D180 after Date of Acquisition:
  9. 9. ROI Calculation – Example © Miniclip – Jonathan Winters 9 CPI Installs IAP LTV Ad Rev LTV D180 ROI Campaign A $3.50 22,500 $2.80 $0.30 -11% Campaign B $3.20 14,000 $2.70 $0.30 -6% Campaign C $3.90 23,100 $3.00 $0.30 -15% Free-to-Play Game Measuring ROI on D180 after Date of Acquisition: This is not looking great… or is it?
  10. 10. ROI Calculation – Example © Miniclip – Jonathan Winters 10 CPI Installs IAP LTV Ad Rev LTV D180 ROI Campaign A $3.50 22,500 $2.80 $0.30 -11% Campaign B $3.20 14,000 $2.70 $0.30 -6% Campaign C $3.90 23,100 $3.00 $0.30 -15% Measuring ROI on D180 after Date of Acquisition: These are not the only installs if we consider the K-Factor
  11. 11. So… What is the K-factor? It is a Growth Rate. K = Number of Invites * Conversion Rate K-factor > 1 User Base growths K-factor = 1 Steady State K-factor < 1 User Base declines © Miniclip – Jonathan Winters 11
  12. 12. If K-factor = 0.5 © Miniclip – Jonathan Winters 12 10 Acquired Users
  13. 13. If K-factor = 0.5 © Miniclip – Jonathan Winters 13 10 Acquired Users Bring in 5 more Users
  14. 14. If K-factor = 0.5 © Miniclip – Jonathan Winters 14 10 Acquired Users Bring in 5 more Users
  15. 15. If K-factor = 0.5 © Miniclip – Jonathan Winters 15 10 Acquired Users Bring in 5 more Users
  16. 16. If K-factor = 0.5 © Miniclip – Jonathan Winters 16 10 Acquired Users Bring in 5 more Users ~10 Additional Users
  17. 17. More Cycles are difficult to attribute © Miniclip – Jonathan Winters 17 Time Complexity Lower Reliability as we move through more cycles.
  18. 18. More Cycles are difficult to attribute © Miniclip – Jonathan Winters 18 Time Complexity Lower Reliability as we move through more cycles.
  19. 19. Be careful not to overestimate the K-factor. © Miniclip – Jonathan Winters 19
  20. 20. For example: If K-factor = 4 © Miniclip – Jonathan Winters 20 … … Time
  21. 21. If K-factor = 4 © Miniclip – Jonathan Winters 21 … …Not Realistic! Reaches whole world after 16 cycles.
  22. 22. How do we measure the K-factor? © Miniclip – Jonathan Winters 22
  23. 23. K-factor Measurement is limited © Miniclip – Jonathan Winters 23 High certainty Low certainty Organic Search Word of Mouth Post-click Ad Installs Cross Promotion Shares on Social Media Post-view Ad Installs App Store Ranking Brand Awareness Incentivised Referrals App Store Visibility Influencers TV Outdoor Ads PR
  24. 24. Define what is part of the K-factor © Miniclip – Jonathan Winters 24 High certainty Low certainty Organic Search Word of Mouth Post-click Ad Installs Cross Promotion Shares on Social Media Post-view Ad Installs App Store Ranking Brand Awareness Incentivised Referrals App Store Visibility Influencers TV Outdoor Ads PR
  25. 25. Define what is part of the K-factor © Miniclip – Jonathan Winters 25 High certainty Low certainty Organic Search Word of Mouth Post-click Ad Installs Cross Promotion Shares on Social Media Post-view Ad Installs App Store Ranking Brand Awareness Incentivised Referrals App Store Visibility Influencers TV Outdoor Ads PR Exclude Organic Growth, Cross-Promotion, Paid Installs and App Store Influence
  26. 26. Measuring the K-factor for Paid Installs Baseline Analysis Define Attribution Window Define Virality Cycle Time Periods Test Environment Stable Amount of Installs Stable Ranking Small Market for Impact © Miniclip – Jonathan Winters 26 1 2 Organic Paid Uplift
  27. 27. Measuring the K-factor for Paid Installs Tracking Referrals Custom Events: App Invite Invite Accepted Track as many Referrals as possible for CVR. © Miniclip – Jonathan Winters 27
  28. 28. Making the K-factor visible © Miniclip – Jonathan Winters 28 Organic Paid UA Daily Installs without Paid UA
  29. 29. Making the K-factor visible © Miniclip – Jonathan Winters 29 Daily Installs with Paid UA Organic Paid UA
  30. 30. Making the K-factor visible © Miniclip – Jonathan Winters 30 Daily Installs with Paid UA Organic Paid UA Organic Uplift Not all K-factor
  31. 31. Differentiate Uplift for K-factor © Miniclip – Jonathan Winters 31 0 0,2 0,4 0,6 0,8 1 1,2 1,4 0 200 400 600 800 1000 1200 1400 1600 1800 Paid Install Uplift Ratio Uplift includes: Word of Mouth (Incentivised) Tracked Referrals Increased Search But also… Untracked Paid Installs Increased App Store Discovery
  32. 32. Once isolated, the uplift shows the viral growth from Paid Installs. © Miniclip – Jonathan Winters 32
  33. 33. Challenges of Viral Measurement The K-factor is not constant • Seasonality • Product Life Cycle Stage • Product Iterations • Market Size & Saturation • App Store Featuring © Miniclip – Jonathan Winters 33 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 K-factor over time
  34. 34. Challenges of Viral Measurement The K-factor is not constant • Seasonality • Product Life Cycle Stage • Product Iterations • Market Size & Saturation • App Store Featuring © Miniclip – Jonathan Winters 34 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 K-factor over time Different K-factor per UA Channel?
  35. 35. The K-factor needs to be monitored and updated. By Platform, Channel and Geo. © Miniclip – Jonathan Winters 35
  36. 36. ROI Calculation – including K-factor © Miniclip – Jonathan Winters 36 CPI Installs IAP LTV Ad Rev LTV D180 ROI Campaign A $3.50 22,500 $2.80 $0.30 -11% Campaign B $3.20 14,000 $2.70 $0.30 -6% Campaign C $3.90 23,100 $3.00 $0.30 -15% Free-to-Play Game Adding the viral installs to the ROI calculation: eCPI Installs IAP LTV Ad Rev LTV D180 ROI Campaign A $2.91 27,000 $2.80 $0.30 6.5% Campaign B $2.66 16,800 $2.70 $0.30 13% Campaign C $3.25 27,720 $3.00 $0.30 1.5% K-Factor = 0.2
  37. 37. © Miniclip – Jonathan Winters 37  Attribution Window  Virality Cycles  Viral Time Window  What do you consider part of the K-factor?  Test Market  Baseline Analysis  Tracking Referrals  Isolate Uplift Installs  Compare conversion rate from tracked Referrals  Calculate average K-factor  Ratio between Paid and Organic Installs  Repeat K-factor analysis  Apply K-factor to ROI calculation  Observe App Store Discovery Define Measure Monitor
  38. 38. Thank you! 38© Miniclip – Jonathan Winters

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