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Making money with your app through mobile app analyticsMaking a game and advertising it is costly.

Let’s be honest.

Even from affordable development studios – you’re still spending a wad of cash to turn your idea into reality.

This is why it’s so critical to pay close attention to each stage of game development to optimize it for users and their willingness to spend money, thus turning your wad of cash into something lucrative and profitable.

App Analytics = Addictive Apps = $$$

Aside from spending money to make your game, user acquisition and retention usually costs something. But unless lots of users magically come out of thin air – so many to the point that the app stores feature you – you’ll have to go through the grind and focus on fine-tuning the user cycle:

  • Acquisition
  • Engagement
  • Retention
  • Monetization

And yes, it takes some work. Unfortunately, we can’t all be as lucky as Flappy Birds.

After developing lots of games, deploying various user acquisition strategies, and figuring out how to optimize players’ emotions for monetization, we’ve come up with a guide to help you, our fellow indie developer, to use data to figure out the key user events to optimize for a better user experience, resulting in higher monetization.

Because, after all, the more money in your pocket, the better.

The Math Behind It All

At the end of the day, you have to make more money per user than you spend in acquisition and retention.

The profitability of making money with apps centers around the lifetime value of your users. Let’s call this Y. The amount you spend on acquisition and retention is X.

As soon as Y>X, your spread is positive and you can begin to scale your game.

But reaching Y=X is a challenge, let alone Y>X.

But let’s say X = $0.02/user. Initially, Y=~$0.01. You’re losing money.

Fortunately, paying close attention to data in the ways below can easily help you bring Y=$0.03 or higher, tripling your revenue to the point that you’re breaking even and making a profit.

*Note: Costs for X and Y are given purely as an example.

Making Money on Freemium Games

We’re going to assume that you’re offering your game for a free download.

Because otherwise, it’s going to be exceedingly difficult to drive downloads and play sessions.

But just because you don’t make money from downloads doesn’t mean all is lost. There are three key ways you can make money from players, either directly or indirectly:

  • Advertising revenue
  • Direct In-App Purchases (IAPs)
  • Driving more downloads through word of mouth and social sharing

Today we’ll focus on IAPs, the most direct and reliable source of app income.

It’s good to keep in mind that 80% of IAPs come from just 5% to 10% of your total user base who have played 50 or more sessions.

With this basic data, you can start to form your game design to include a funnel that draws people through the flow of acquisition, engagement and retention to have the greatest monetization outcome possible.

1. User Acquisition Data

In the beginning, a player’s lifetime value is either zero or not zero. Basically, either they download & play or they don’t.

The most important KPI data points to analyze at this stage are:

  • New downloads
  • New users completing at least one game
  • Average number of games completed by new users within the first day after the initial download
  • Drop off rates

If the drop off rates are too high, or the users aren’t playing as many games as you’d like, troubleshoot or modify one or all of these 3 factors:

  • Incentivized downloads
  • Finding out if the game is being downloaded by a non-targeted demographic
  • A complex, elaborate sign-up process
  • Lackluster or absent tutorial to guide users through their first interaction with the game

2. Engagement: the Key to App Monetization

Once the user has spent some time with the game, you want to entice him to make it a part of his everyday routine: something he gets into the habit of returning back to. Normally, this means he plays the game 3 to 10 times per day.

At this point, important KPI data to track include:

  • Number of gaming sessions per day
  • Frequency with which a player returns to the game & time lapse between sessions

Coupled with the data collected with each user during sign up, you can send customized push notifications and pop ups during the times when the user is most likely to play your game, incentivizing him to keep playing.

Here, data-ridden activity maps help you know how a player is doing in different sessions and what content to include in your notifications. To motivate players to keep going, try to include elements of the game the player may not have discovered yet, like tips for improving, social initiatives, leaderboards, and so on.

3. In-App Retention Analytics

After the user finishes 10 to 50 gameplay sessions, you need to pay a lot of attention to the depth of the game to keep them hooked with a personal interest in succeeding.

Here, the most important thing for game designers to keep an eye on is milestone or mission-based metrics to find out where users are getting stuck or frustrated. Heat maps are especially helpful in figuring out where to fine-tune the game’s design-related parameters on different levels.

To find out which levels you need to start fine-tuning the most, track retention rates in percentages at each of the following time-point milestones:

  • Daily
  • Weekly
  • Monthly

4. App Monetization Strategies

Once someone has become a dedicated player, it’s time to convert him into a spender by pushing him through the monetization funnel.

But this is easier said than done.

People get scared of spending money and you should expect a sizeable number will shy away from spending money and simply prefer to put the game down.

However, taking care of how you display the request for an IAP has a lot to do with whether or not the user will take the plunge and spend a few dollars to keep playing.

For example, having limited time sale offers for different amounts of lives or in-game credits tailored to what the user needs will have a much higher conversion rate than simply demanding payment under the threat of stopping the game.

Here, to ensure your strategies for requesting IAPs are working to their maximum efficiency, track these KPIs:

  • ARPDAU (average revenue per daily active user)
  • ARPPU (average revenue per paying user)
  • LTU (lifetime value of user)
  • Inflation (whether or not the user has too many extra lives already at the time of an IAP request)

But, just because a user doesn’t pay on the initial round of an IAP request doesn’t mean he or she is no longer of any value.

After a while of resisting an IAP, try giving them a generous award for their dedication to the game, like extra lives or a boost to get to the next level.

Based on our work with games, user engagement, and monetization with hard data, we’ve developed an admin panel for game developers to track their user engagement and monetization so they can more easily and accurately monetize their apps with fine-tuning rather than educated guesses.

At each stage, the dashboard displays KPIs applicable to each stage of the user monetization funnel and the ability to reach out to users in crucial parts of the game through tailored push notifications.

What are some of your most effective tips for optimizing monetization? Or do you have any questions you’d like to ask? Help out your fellow indie developers & comment.


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