The gaming industry has undergone a huge shift over the past decade. From brick-and-mortar locations to a predominantly online marketplace, the industry has reinvented itself. As new technologies are created and a shift to mobile is emerging, game marketers need to be smarter than ever at user acquisition.

We sat down with Aaron Richman, who leads gaming initiatives for AdRoll, and discussed the challenges and opportunities that gaming marketers have when promoting new games and approaching new user acquisition.

AdRoll: You focus on gaming as one of the many industries that fall under your team’s purview. What makes gaming such a hot industry for full-funnel marketing efforts?

Aaron: Over the years, we’ve had a lot of success running display campaigns for our gaming partners, particularly those promoting freemium (free-to-play) and premium (pay-to-play) games. Historically, our clients have spent the majority of their paid acquisition budgets on paid search, targeted ad network buys, and video advertising—while investing a proportionally small share in retargeting given its limitations. However, given the returns and favorable acquisition costs of retargeting compared to other upper-funnel channels, we’ve always received requests from our gaming clients to help them tap into our wealth of intent data to go beyond retargeting by attracting new, look-alike users.

Last year, after continual testing, we released our Prospecting product, which, unlike other DSPs and mobile ad networks in the space, leverages intent data rather than third-party data to target act-alike audiences across the web. With Prospecting focusing on new user acquisition and Retargeting focusing on site conversion and retention, our platform became very attractive for publishers who were looking for a partner to help them execute a strategy that would address the full customer journey from discovery to conversion.

AdRoll: What are the main challenges for marketers in gaming today?

Aaron: There is no shortage of challenges when it comes to marketing games. According to research firm EEDAR, nearly 3,500 games were launched on Steam in 2015, up from 1,500 in 2014, and only 500 in 2013. That’s not to mention the 589,036 gaming apps recorded on Android or 443,524 IOS apps. With this inundation of new game titles hitting the market, it can be a real challenge to build awareness without spending hefty amounts on paid marketing. For the titles that are successful in building awareness, marketers then need to find ways to move users through the funnel, from signup and install to becoming paid users. Once a user is paid, marketers need to partner with their product teams to drive and maintain engagement in the game while finding ways to maximize the average revenue per user (ARPU) and lifetime value (LTV) of their users. If the game falls short in any one of these areas, the publisher will likely have a challenging time making profit on the game.

Premium games also have their share of challenges. In addition to platform exclusivity and the cost associated with purchasing the device, premium games must also compete with thousands of other paid titles that cater to consumers’ tight budgets. These gaming titles often have to spend exorbitant amounts of money on offline and online channels to build awareness of games and take market share away from other competing titles.

AdRoll: How is AdRoll helping to solve these issues?

Aaron: As a full-funnel marketing platform, AdRoll is uniquely positioned to help marketers address the entire customer lifecycle, from discovery and consideration to conversion and retention. While our marketers leverage a host of other tools, our platform is focused on helping marketers address three core marketing challenges: attracting new qualified prospects, converting those prospects into customers, and growing the LTV of those users. Within our platform, marketers are able to execute highly targeted ad campaigns that attract users at every stage of the consideration process. We also provide advanced analytics, along with specialized account management, to help marketers measure the effectiveness and incrementality of their campaigns.

AdRoll: What are the most popular AdRoll products you see gaming customers use and why do you think these are the most effective?

Aaron: Prospecting, Retargeting, CRM Retargeting, and Audience Extension are the four most popular products within our gaming segment. With Prospecting, marketers are able to tap into AdRoll’s IntentMap to identify new look-alike users that have shown browsing behavior similar to their highest-value players. With over 5,000 advertisers participating and 1.2+ billion digital profiles, our gaming clients have been really happy with the scale and cost-effectiveness of the product.

Once visitors are driven to the site or app by Prospecting, they’re then tagged and funneled into the retargeting campaigns. With AdRoll Retargeting, marketers are able to intelligently segment their audiences and target their highest-intent users across the web, Facebook, and the inbox using our SendRoll product.

CRM targeting has also grown in popularity. With CRM, marketers can upload a list of hashed emails that AdRoll can then match to browser cookies to extend marketing campaigns out of the inbox. For example, a gaming company might want to extend a promotion or incentive to its dormant users who have a freemium account but have not made a transaction in the game. While email marketing is a common and effective tactic for these promotions, it’s likely that a valuable portion of the audience is not reading or receiving the messages. In fact, according to a recent MailChimp study, the average email open rate for Games was 21.19% with a click rate of 3.45%. Knowing that 70-80% of emails are oftentimes not opened as a result of intentional inbox filtering, users unsubscribing, or gamers using secondary email addresses, marketers are increasingly leveraging CRM targeting to complement their existing email campaigns and extend promotions outside of the inbox.

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Lastly, audience extension has been a very popular tactic for our game publishers, particularly those that own multiple gaming titles or have close partnerships with other web properties who share complementary audiences. With audience extension, marketers who consent are able to target cookies from their other web properties. For example, a publisher promoting a new game may choose to target the audiences of other games within its portfolio to drive awareness. The key benefit of audience extension is that it gives marketers access to a highly targeted and highly qualified audience, all without having to pay a premium for the data.

AdRoll: What differentiates marketing in the gaming vertical compared to other verticals?

Aaron: Two things that really differentiate our video game clients from our other customers are their focus on engagement and revenue per user. In the game industry, the best game isn’t anything without an effective monetization strategy and engaged user base. Everything comes back to cost per acquisition (CPA) and profitability—and the math needs to add up.

That said, while there are certainly areas where gaming differentiates from other industries, there are also opportunities for marketers to take advantage of tactics that have historically been more common in the B2B, B2C, and Retail spaces. For example, similar to B2B SaaS, many of our gaming clients operate on a freemium model, where the goal is to ultimately upsell users to the paid option. With this said, many of our gaming clients have seen success creating unique audience segments and building drip campaigns to nurture users from window shoppers to freemium users and then, finally, to paid users.

Similar to our B2C Entertainment clients that launch large scale flights to promote limited time contests, game marketers often launch burst campaigns to scale signups or installs with the hope of increasing signups and improving their placement in the app stores. More excellent tips on burst campaigns from Guy Banda here.

And lastly, in Retail, many of our savviest clients have seen success showing recommended and popular products to customers immediately following their purchase. In gaming, we’ve had clients run similar campaigns to cross-sell users on premium packages or virtual goods within the game.

AdRoll: What are some trends you see coming up for gaming customers?

Aaron: There have certainly been notable changes on the platform side, with mobile games quickly growing in popularity as more gamers turn to their phones and tablets for entertainment. Virtual reality (VR) and augmented reality (AR) have also been exciting to follow as HTC Vive, Microsoft’s HoloLens and Facebook’s Oculus Rift started shipping earlier this year to considerable fanfare.  As for AR, games like Pokémon Go have also seen success incorporating interactive elements to boost player engagement.

In regards to business models, there’s also been a dramatic rise in free-to-play MMO games, with games like League of Legends, Dota2 and World of Tanks continuing to gain share against console games. Lastly, I’d expect to see a significant rise in eSports and social gaming as live streamers like Twitch and competitions like the League of Legends World Championship and Valve’s International Dota 2 Championship continue to draw big crowds, publicity, and significant prize money in the tens of millions of dollars.

AdRoll: With the popularity of Pokémon Go and other apps (Candy Crush, Fruit Ninja, etc.), how can marketers adapt to new trends?

Aaron: Games like Pokémon Go, Monster Strike, and Clash of Clans have solidified mobile as a major gaming platform. They’ve also shown the power of social media and social sharing in building virality of their games. However, while games like Pokémon Go have seen rapid overnight growth and success, they’ve also struggled to maintain long-term engagement with new and existing players. To be successful and cross the proverbial chasm, marketers need to continue finding ways to make their games social and easily sharable (in-game and otherwise). As the game gains awareness and usage, marketers must find novel ways to keep their gamers engaged for the long haul, whether it’s releasing periodic updates to the game, promoting limited-time perks, creatively awarding gamers for hitting key milestones, or building other network effects into their games.

AdRoll: What reading material do you recommend to marketers in the gaming industry? Any interesting conferences coming up?

Aaron: My favorite sources for gaming news are IGN, GameSpot, Pocket Gamer, YouTube, and Twitch. For events, we follow E3, Blizzcon, Quakecon, Game Developers Conference (GDC), and Gamescom the closest. As for thought leaders, I follow Hideo Kojima (owner of Kojima Studio), John Carmack (co-founder of idSoftware), Andrew Wilson (CEO, EA), and Gabe Newell (founder, Valve).

AdRoll: What advice would you give to gaming marketers?

Aaron: Always be testing, and work with vendors that are willing to partner with you closely on reporting. Not only have our customers been happy with performance, but they’ve also really appreciated the insight our account managers and optimizers have provided about their audience and how Prospecting and Retargeting are actually moving the needle for their business. For example, for Prospecting, it can be helpful to understand how engaged new visitors are compared to organic traffic, and what impact Prospecting is having on the Retargeting campaigns. Understanding these nuances can help refine targeting and optimize campaigns to exploit ads and segments that are showing the greatest return on investment.