Reliance on traditional analytics should be replaced with MMM to enhance marketers’ strategies.
The world of gaming is evolving at a velocity that even the most sophisticated studios and publishers struggle to keep pace with. Technologies such as augmented and virtual reality, web 3, and generative AI are transforming title development and gameplay experiences.
Meanwhile, gaming marketers are tasked with continuously forging new growth in the face of significant obstacles. In the face of these challenges, these marketing leaders are endeavoring to evolve with the times, seeking new methodologies to measure and optimize – chief among these set to change ‘the game’ is marketing mix modeling (MMM).
At its core, MMM is a statistical analysis technique that identifies the impact of multiple variables on sales. It considers numerous factors, including offline and online advertising and external influences like seasonality and weather.
MMM operates on the principle that a brand’s sales funnel is influenced by a combination of these factors. This differs from touch attribution, which attributes sales to individual touchpoints, often giving 100% of the credit to the last touchpoint. For example, consider a B2B software company. The company may invest in various marketing strategies, including social media, paid search, and email marketing campaigns.
Using MMM, the company can analyse the sales data and truly understand the influence of each of these marketing channels on the overall sales performance.
Gary Danks, GM, AIM by Kochava said: “Mobile gaming continues its dominance over console and PC due to its versatility, flexibility, and accessibility. Therefore, it’s no surprise that the predicted number of video gamers worldwide in 2029 is 3 billion. As a result, gaming publishers are increasingly focused on multi-platform support to provide players with maximum playability and engagement opportunities across connected devices.”
Surveying global mobile gaming markets, Asia-Pacific and North America are on top, accounting for $84B and $50B respectively in game revenue in 2023. TikTok for Business witnessed sizable increases in YOY ad spend from gaming companies based in China with a focus on outbound markets. Spend rose 11% from 2022 to 2023 and 15% from 2023 to 2024. While mobile game revenue and the total addressable market of gamers is growing worldwide, the industry still faces its share of headwinds.
Saturation of the mobile gaming market and increased competition make it more difficult and costly to get worthy titles noticed above the noise. Mobile gaming advertising spend has risen steadily since 2021, forecast to top $130.8 billion by 2025 as paid user acquisition costs continue climbing.
Danks continued: “Have you ever sat in the user acquisition (UA) hot seat for a mobile gaming company? If so, you know that return on ad spend (ROAS) is king. The ability to clearly understand ROAS and quickly course-correct campaigns headed off the rails is vital to the success and long-term growth of any game. Unfortunately, ROAS has become increasingly difficult to measure within the traditional last-touch attribution (LTA) model.”
“Mobile game marketers earnestly seeking to calculate ROAS and other key performance indicators face the mounting loss of ad signal data and increasingly delayed performance feedback due to evolving market shifts and influences.
Initiatives by major platforms (i.e., Apple, Google) designed to give users more control over data privacy, declining granularity in reporting data shared by major walled-garden platforms (e.g., Google, Snap), and increased development of user privacy regulations have altered the longstanding framework of real-time LTA. Within this landscape, marketers must innovate to produce accurate reporting in compliance with privacy frameworks. The data signal backbone that was used to support LTA is fractured, leaving it ill-equipped to power a single source of truth for omnichannel ROAS.”
“A common misconception is that adopting MMM means ditching measurement via your MMP. In reality, MMM and LTA from your MMP work incredibly well in tandem, feeding into each other as illustrated by the following flow diagram. Granular data from your MMP, as well as aggregated data sets from the integrations with Apple’s SKAdNetwork/AdAttributionKit and the future Google Privacy Sandbox for Android, can be integrated directly into an MMM SaaS platform such as AIM by Kochava.
“Mobile gaming marketers are at a pivotal crossroads that demands action. Over-reliance on the traditional worldview of last-touch attribution does a disservice to the increasingly diverse media mix strategy of gaming studios. Marketers on the cutting edge are dual wielding LTA and MMM to strike the perfect balance of insights to aid in strategic decision making,” concluded Danks.
About Kochava
Kochava Inc. is a real-time data solutions company offering leading omnichannel measurement, attribution, and campaign management for data-driven brands and platforms. We empower advertisers and publishers to measure what matters with tools that deliver better insights and actionable data on one operational platform. Kochava unifies all of your data and critical omni-channel solutions into a cohesive system; the foundation for limitless advertiser and publisher tools to help you reach your unique growth goals.
With a culture of customer-driven innovation, dedication to data security, and the most powerful tools in the ecosystem, Kochava is trusted by top brands to harness their data for growth. Headquartered in Sandpoint, Idaho, the company has offices globally. For more information visit their website www.kochava.com. Follow Kochava on social media: Facebook, Twitter, and LinkedIn.
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