The State of Gaming App Marketing

The State of
GAMING APP
MARKETING
November 2017
Table of Contents
Key Findings 3
Data Highlights 4
Introduction 5
Cross-Funnel Insights 6
Marketing 7
Installs 10
Engagement 12
Revenue 16
Cost & ROAS 21-24

KEY FINDINGS
iOS propels global growth in user acquisition activity. The share of non-organic installs
among gaming apps has grown 23% YoY. Most of this growth can be attributed to iOS which
outperformed Android by 2 times (34% vs. 16%). The rise in UA activity in iOS was mainly due
to an impressive 98% growth in China. Overall, top markets are by no means saturated -- their
growth rate was 26% higher than other global markets.
iOS and Android differ across most KPIs. Unlike retention, where the iOS user delivers better
loyalty over time, average sessions per user among Android gamers was slightly ahead. That
means Android users engage more often but over a shorter time frame. There was also a
significant difference in the platforms’ uninstall rate, with iOS producing a 13% rate and Android
no less than 33%. Average revenue per user was 18% higher in iOS, but in the US, Android
actually outperforms iOS in this metric.
Bottom line success in gaming hinges on maximizing both organic and non-organic traffic.
Overall, non-organic traffic alone produces a negative Return on Ad Spend (ROAS) even
after 90 days (often it takes about six months for a game to generate full return on spend).
But when adding organic users, the ROAS rises significantly beyond the breakeven point.
Nevertheless, non-organic is crucial for both controlling and scaling user growth - and
quality, assuming data is heavily relied on. Still, it is the organic users - even a fraction of
them - whose “stickiness” helps reduce the eCPI to make the app profitable.
Japan, Taiwan and South Korea stand high in gaming. The North Pacific Asian countries
dominate the global gaming ecosystem. Their overall growth in non-organic activity reached
37% in 2017 -- 61% higher than the global average. Their users are also the most engaged
gamers, and the highest revenue and ROAS generators. In fact, day 7 ROAS in Korea, Japan and
Taiwan was 50% higher than the global average.
Vietnam opportunity knocks. Thanks to the Southeast Asian country’s low cost of media (58%
less than average), it produced the highest non-organic ROAS after 90 days -- an impressive 95%
result. Marketers are still mostly unaware of this opportunity as the country showed only modest
growth in UA activity.
The State of Gaming App Marketing

www.appsflyer.com 3
REPORT DATA HIGHLIGHTS
Duration No. of Countries App Installs
Q3 40 95
2017 million
Total Apps Used
1,300
Apps Measuring Installs With Revenue
Revenue Cost Data
750 10 $150
million million

www.appsflyer.com 4
INTRODUCTION
Ten years after the iPhone exploded into the market, the mobile gaming app ecosystem
continues to grow. With 2.1 billion players, smartphone and tablet games are predicted to
generate $45.7 billion in revenue in 2017. By 2020, revenue is expected to jump by 40% to hit
$64.2 billion.
To help gaming app marketers capitalize on this booming yet highly competitive space, The
State of Gaming App Marketing offers detailed findings across the funnel, including:
Marketing Campaigns
{{ Assists
{{ Top conversion paths
{{ Number of networks used
{{ Share of Google and Facebook
Installs
{{ Gaming UA non-organic market growth
Engagement
{{ Retention rates
{{ Average sessions per user
{{ Uninstall rates
Revenue
{{ Share of buying users
{{ Average revenue per user
{{ Average revenue per paying user
ROI
{{ Cost per install
{{ The bottom line
A drill-down by type (organic, non-organic), platform (iOS, Android) and country is included.

www.appsflyer.com 5
CROSS-FUNNEL
INSIGHTS
ON THE CAMPAIGN TRAIL
Marketing Assists (AKA Contributors)

To determine the percentage of installs with assists, we calculated how many non-organic installs
had at least one contributor prior to the last attributed touch.
1 out of 10 installs have

at least one assist
Click Impression Click Click Install

(Last Touch)
The data shows that contrary to what you may think, user journeys are not a marginal phenomenon
in gaming user acquisition. In fact, just over 10% of installs have at least one assist before the last
touch. Having said that, the journey for gamers rarely includes more than a single assist (nearly
85% of installs with assists have only one).
Top 5 Multi-Touch Conversion Paths

To measure the top multi-touch conversion paths, we examined which sequence of assists was
most common by dividing each path by the total number of installs with assists.
1st Assist 2nd Assist 3rd Assist Percentage
Click Click 59.6%
Click Impression 25.3%
Impression Impression 6.5%
Click Click Impression 3.5%
Click Click Click 2.4%
Because attribution logic dictates that the click is mightier than the view, and since it has a longer
window (7 days vs. a 24 hour standard for a view), the click is a more common assist than a view.
In addition, we can see that conversion paths in gaming rarely include three assists - only 6 out
of 100 installs have this sequence.

www.appsflyer.com 7
Media Sources
Average Number of Media Sources Used (Global)
For this KPI, we examined app groups sorted by ad spend, which we divided into three categories:
high, medium and low. We then averaged the number of media sources each app used from our
2,500+ integrated partners. The count excludes custom media sources.
ANDROID iOS
High Spenders 16.5 12.6
Medium Spenders 8.2 8.4
Low Spenders 5.6 5.4
As we can see from the data, there is a strong correlation between spend and the number of
networks used. Savvy advertisers understand the value of diversifying their budget across multiple
sources. This gives them far more room for optimization, enabling them to target the same
users across different networks with different types of experiences and ads - a proven tactic to
encourage engagement.
Whereas among medium and low spenders, the platforms are almost identical, high Android
spenders run with 30% more media sources to drive reach across the much larger Android
user base.

www.appsflyer.com 8
Share of Google and Facebook in the Media Mix By App Size
Here we grouped Facebook and Google and calculated their share among overall non-organic
traffic across different sizes of apps based on their level of UA activity.
76.3%
72.5%
66.0%
59.6%
46.6%
32.0%
5K-10K 10K-50K 50K-100K 100K-500K 500K-1M 1M+
App Size
The increasingly larger share of Facebook and Google in the digital advertising pie has been
widely documented. When comparing app sizes, we can see that the smaller a gaming app,
the higher the share of Facebook and Google in its media mix.
In fact, the share of the smallest group of apps is more than 2x larger than the largest group.
It appears smaller apps rely on easier-to-use self-service networks like Google and Facebook.
The larger apps - with larger UA teams - use more networks at the expense of the tech giants.

www.appsflyer.com 9
INSTALLS
Global Non-Organic Market Growth

To determine overall market growth, we compared Q3 2016 and Q3 2017. To neutralize AppsFlyer’s
growth and the app shelf life effect, UA market growth was calculated by comparing change in
the ratio between organic and non-organic traffic.
+34%
Overall Growth:
23%
+16%
Q3 2016 Q3 2017
Overall, the non-organic app install market grew by 23% at the expense of organic installs. With
more data, better use of data and largely broken organic discovery, marketers understand they
need to increase spend, take control, and drive reach with non-organic traffic. For these advertisers,
finding quality non-organic users at scale is the goal, not the means to get organic installs.

www.appsflyer.com 10
Non-Organic Growth by Platform in Top Markets
98.0%
94.9%
93.1%
70.2%
52.0%
50.0%
42.2% 42.2%
34.5%
32.3% 32.0%
24.0% 24.0% 25.0% 23.6%

20.6% 20.2%
16.4% 15.0%
14.4% 13.1%
12.4% 12.3%
7.6% 6.3%
2.9%
-1.0% 1.6% -1.9%
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ANDROID iOS
We can see that overall iOS growth can largely be explained by a significant jump in China and
India. In China, the share of iOS among non-organic traffic has doubled from 15% in Q3 2016 to
30% in Q3 2017.
Also evident in the graph is the impressive increase in UA activity in North Pacific Asia, with
South Korea, Japan and Taiwan up 37% in 2017 -- 61% higher than average.
Another interesting point is that top markets are not at all saturated - their growth rate was
26% higher than other global markets (we pulled data on 40 countries).

ENGAGEMENT
Global Retention Rate By Day

Retention rates were calculated by dividing the number of users who were active on a given
day by the total number of users who installed and launched the app on day 0.
39.9%
23.8%
18.9%
12.6%
7.7% 6.7% 5.9%
Day 1 Day 3 Day 6 Day 10 Day 16 Day 21 Day 27
The findings reveal that retention continues to be a struggle - only about 6 out of 100
gamers open an app 30 days after installing it. This is a tough one because we haven’t seen
global retention rates change in the last year or so. It’s very hard to keep your users, but since
engagement is key for monetization, it’s a must.
On an individual app level, many apps have been able to improve their retention with the right
and heavy use of data reports (retention, cohort analysis, in-app funnel optimization etc.) and
proven re-engagement channels (retargeting, email, push notifications).

Non-Organic Retention Score Comparison
To determine a robust retention score, we examined the retention rate of 15 days throughout
a month. We then assigned more weight to each passing day to reflect the logic that the
longer a user is retained, the higher the score.
Retention Score by Type Retention Score by Platform
+60% +18%
Non-Organic Organic
Not surprisingly, organic users were 60% more likely than non-organic users to use an app
over time. A platform comparison shows iOS users were retained for longer.
Retention Score By Platform in Top Markets
Japan Taiwan Russia India UK US Indonesia China Germany South Thailand Brazil
Korea
ANDROID iOS
The graph tells us that the most retained users globally - across iOS and Android - can be
found in Japan where the average retention score was 60% higher than the global average
and 40% higher than in other top markets.
Also, we see that the Android retention in India is high, over 30% above average.
Unlike the vast majority of countries where the difference between platforms was rather
marginal, we can see a significantly higher iOS retention score in Brazil and Indonesia -
almost 5 times the global average.

Average Sessions Per User (90-Day Period)
To calculate this engagement-driven KPI, we looked at a cohort of users who installed
during June and then tracked their activity over about 90 days going forward.
Average Sessions Per User By Type Retention Score by Platform
41 89 41 35
Non-Organic Organic
While the retention rate offers marketers an important signal on how long a user is active,
average sessions per user tells us how often a user is active - another important KPI
particularly for ad revenue monetization.
Here we see another indication as to the quality of an organic user in gaming - just like in
retention. We can also see that unlike retention, where the iOS user delivers better loyalty
over time, averages sessions per user among Android gamers was slightly ahead. That means
the two aren’t necessarily connected - Android users engage more frequently in a shorter
time frame.
Average Sessions Per User By Platform in Top Markets
ANDROID iOS ANDROID iOS
Taiwan 52 47 US 45 29
Germany 49 43 Indonesia 40 37
Japan 50 39 Thailand 41 33
South Korea 47 42 Brazil 30 34
UK 46 36 India 23 37
Russia 41 38 China - 31
Taiwan rises above when it comes to user activity on both platforms with a 35% higher
number of sessions per user than average and 25% higher than top markets.
Germany has the second most active gamer audience, followed by Japan and South Korea.
The US is far behind with a lower than average number of sessions per user.

Non-Organic Uninstall Rate (90-Day Period)
To calculate the uninstall rate, we looked at a cohort of non-organic users who installed during
June and then measured uninstalls over about 90 days (only among apps that implemented
uninstall tracking).
Global Uninstall Rate Global Uninstall Rate By Platform
23.9% 33.0% 13.1%

Increasingly high user expectations, fierce competition, high data usage, limited device storage
and other factors contribute to high uninstall rates, with nearly 1 in 4 users deleting an app
within 90 days. Android users are far more easy on the uninstall trigger -- 2.5x more so than
their iOS counterparts.
Uninstall Rate in Top Markets
25.0%
22.0% 21.8%
21.2% 21.0%
19.2%
18.6%
Vietnam Germany Japan Australia France Taiwan US
Vietnam, where Android dominates and iOS is almost non-existent, has the highest uninstall
rate while the US has the lowest among top markets - mostly because of its high share of iOS
users, who are far less uninstall-driven than their Android counterparts.

REVENUE
Share of Buying Users (90-Day Period)

To find out how many gamers actually make in-app purchases, we looked at a cohort of users
who installed during June and then went on to make an in-app purchase within 90 days (only
among apps that implemented various verified purchase events).
Share of Buying Users By Type
ORGANIC NON-ORGANIC
2.72% 2.40%
The difference between organic and non-organic is not that significant - only 15%. After all,
gaming app marketers focus heavily on optimizing for revenue, while organic discovery in
gaming is more casual and experimental in nature, with very little brand affinity.
When combining average revenue per user, average revenue per paying user and share of
buying users, the conclusion is clear: it’s all about the whales. Finding quality users who make
purchases in games is vital as they will generate significant revenue for a gaming app.
Share of Buying Users By Platform
iOS ANDROID
3.20% 2.23%
The dominance of iOS when it comes to money being spent is evident as the share of users on
iOS who have become paying users is 45% higher than Android.

Share of Buying Users By Platform in Top Markets
4.0% 4.0%
3.7%
3.5% 3.4%
3.4% 3.3% 3.3% 3.3%
3.2%
3.1%
3.0%
2.9% 2.9% 2.9%
2.6%
2.6%
2.4%
1.9% 1.9%
1.2%
Japan Germany Taiwan US Canada China UK South Vietnam Russia Brazil

Korea
ANDROID iOS
Japan and Taiwan have the highest share of buying users on iOS with 4% - 23% higher than
the iOS average, which stands at 3.2%. Among Android users, Germany reigns supreme with
3.5% - 54% higher than platform’s average of 2.2%.
Average Revenue Per User (90-Day Period)

Once again, we looked at a cohort of users who installed during June and then tracked their
revenue activity over 90 days. We then divided the total revenue by the total users (we only used
apps that implemented various verified purchase events).
Average Revenue Per User By Type
$2.01 $2.11
Organic
$1.37
Non-organic
Average Revenue Per User By Platform
iOS ANDROID
$2.09 $1.79
When it comes to money being spent, organic users outperform non-organic users by just
over 50% - less than the gap we’ve seen in app engagement. A platform comparison has iOS
leading Android by 18%.

Average Revenue Per User in Top Markets
4.8
4.5
4.1
3.7
2.2
2.0 1.9
1.8
1.8 1.7 1.7 1.6
1.4
1.1 1.2 1.1 1.2
Japan Taiwan Germany US China South Vietnam UK Russia

Korea
ANDROID iOS
Japan and Taiwan are leading the pack, generating significant revenue on both iOS and
Android. In the US, we can see that Android is ahead of iOS. Among shopping and lifestyle
apps iOS dominates, but when it comes to gaming it is more of an even playing field, and in
this case Android even tops iOS.
Average Revenue Per Paying User (90-Day Period)

To calculate this KPI, we used gamers who installed during June and then tracked their
purchase activity within about 90 days. We then divided the total revenue by the total number
of users who made at least one in-app purchase.
Average Revenue Per Paying Users By Type
$40.21 $46.44
NON-ORGANIC ORGANIC
We can see dramatic differences between the overall user base and the paying user base,
particularly among non-organic users with an average revenue per paying user that is 29 times
the average revenue per user. Among organic users, the gap was also significant -- 22x greater.
This clearly illustrates the fact that paid campaigns can deliver users of the highest quality.
When combining the share of buying users and ARPPU, we can see the whale phenomenon
clearly demonstrated. It happens when the number of paying users is low, but those who do
make in-app purchases are of superior quality.

Average Revenue Per Paying Users By Platform
iOS ANDROID
$44.83 $44.28
Usually, iOS and Android users are quite different. Among whales, however, paying users
from both platforms are practically the same.
Average Revenue Per Paying Users By Platform in Top Markets
94.4
81.8
74.4
70.2
62.7
56.4
44.3
40.1 40.9
36.9 36.3
35.0 33.8
29.7
27.7
25.2
17.3
Japan South Taiwan US Germany UK China Russia Vietnam

Korea
ANDROID iOS
Similar to what we’ve seen in ARPU, ARPPU is highest for both Android and iOS in Japan,
Taiwan and South Korea, where Android paying users spend an average of $78 and iOS
paying users spend an average of $76 (76% and 70% higher than average, respectively). In
the US and Western Europe we can see that iOS paying users spend largely the same, but
among Android users, US paying gamers spend 25% more than their Western European
counterparts.

Cost Per Install
To determine the cost of media, we utilized our scale of cost data from almost 100 networks
who send us this information on every install.
Average Global CPI By Platform
iOS ANDROID
$1.62 $1.52
Cost of media in gaming is similar across platforms with iOS only 7% more expensive than
Android.
CPI in Top Markets (USD)
2.3 2.3
2.2
2.1 2.1
1.8
1.6 1.6
1.5
1.4 1.4
1.2 1.2
1.0 1.0
0.9
0.5
Taiwan Japan Germany US South China UK Russia Vietnam

Korea
ANDROID iOS
With such great engagement and revenue, it is no surprise that the cost of media is also
highest in Japan and Taiwan. We also see that in most regions, the difference in cost between
platforms is not significant, except in Germany and Vietnam, where iOS is 2x the price of
Android.

Day 7 ROAS
To calculate return on ad spend on day 7, we divided the average net revenue generated during
a non-organic user’s first 7 days by the acquisition cost. For this KPI, we only used apps that track
both cost and revenue.
The majority of 1st purchases in gaming apps occur on day 3 (3 days after an install), after which
the number of sessions significantly climbs. By day 7, active gamers show the first sign of maturity.
As such, Day 7 ROAS is an important KPI for gaming app marketers because it is used to base
long-term predictions of profitability.
Day 7 ROAS Global Benchmark (across top markets)
+25%
( 75% under breakeven mark )
Overall Day 7 ROAS (including organic and non-organic users)
+101%
By Platform
iOS ANDROID
+26% +23%

Day 7 ROAS in Top Markets (Non-Organic Traffic)
37.9%
35.4% 35.2% 35.2%
26.7%
25.7%
20.8% 20.0%
18.6%
South Korea Vietnam Taiwan UK China Japan Germany US Russia
As we can see, day 7 ROAS across the board does not reach the breakeven point (above 100%).
Whereas Asian countries lead the pack, mature markets like the US and Germany have a
surprisingly low day 7 ROAS. For marketers seeking to gauge overall profitability on ad spend:
when adding organic users, the eCPI drops significantly, leading to a 4x higher return, passing
the breakeven point.

Day 90 ROAS
To calculate return on ad spend on day 90, we divided the average net revenue generated
during a non-organic user’s first 90 days by the acquisition cost. For this KPI, we only used apps
that track both cost and revenue.
Day 90 ROAS Global Benchmark (across top markets)
+70%
Overall Day 7 ROAS (including organic and non-organic users)
+240%
By Platform
iOS ANDROID
+67% +71%

Day 90 ROAS in Top Markets (Non-Organic Traffic)
95%
84%
79%
73%
69%
66%
62%
58%
44%
Vietnam UK Taiwan South Korea Japan Russia China US Germany
The data shows that after three months, non-organic gaming users do not yet reach the
breakeven point (this can take up to 9 months for some mature games), but when adding
organics, profitability surges. Also, whereas after 7 days iOS ROAS was 13% higher than Android,
after 90 days the trend turns with Android ROAS 6% higher than iOS.

ABOUT APPSFLYER
AppsFlyer's technology is found on 98 percent of the world's smartphones, making it the
global leader in mobile attribution and marketing analytics. Data-driven marketers rely
on AppsFlyer for independent measurement solutions and innovative tools to grow and
protect their mobile business.
AppsFlyer's platform processes billions of mobile actions every day, empowering app
marketers and developers to maximize the return on their marketing investments.
AppsFlyer's NativeTrack™ Attribution, Marketing Analytics Data, OneLink's Deep linking
capabilities and Protect360 enterprise-grade fraud solutions have made AppsFlyer the go-to
resource for the most successful mobile apps in the world. With Facebook, Google, Twitter,
Pinterest, Snap Inc., Tencent and 3,000 other integrated partners, and clients including
HBO, Waze, Alibaba, Kayak, Activision, Playtika and 12,000+ leading brands worldwide.
AppsFlyer has 13 global offices to support marketers everywhere. To learn more, visit our
website: www.appsflyer.com.


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The State of

Cost & ROAS 21-24