by kScope guest contributor
Tyler York, Marketing and Customer Development, Betable

It’s becoming clear that casino games are the next big social game genre.

Take a look at the image above, provided by Kontagent. Casino games are surpassing farm games as the darlings of social networks: The growth of monthly active users (MAUs) for farm games is slowing, while that of social casino games is generating higher revenues–seven times, to be precise–than the casual games category.

Furthermore, with downward pressure on Facebook’s stock from its falling revenues, it’s become increasingly likely that it will soon allow real-money gambling on its platform. Couple that with evidence that legislation may open up parts of the U.S. market to online gambling, and you have a perfect storm forming that game developers would be foolish to ignore.

The smart gambling companies have already made their moves into the social space. With IGT‘s purchase of Double Down Interactive and Caesar‘s purchase of Playtika,* gambling companies have snapped up the two largest existing social casino games. The savviest social game companies aren’t far behind them, with multiple companies creating their own casino games and Zynga aggressively moving into real-money gaming.

The threat comes from both sides. Social game companies have intricate knowledge of social game mechanics and their existing user bases. They can also “flip on” real-money play in their existing games and be a huge threat. Gambling companies can afford to spend hundreds of dollars per player to acquire users, and they are experts in capturing and retaining whales. They can bring massive war chests and marketing knowledge to any fight.

So game companies, if social gambling games are the new battlefield, how do you plan on win the war? Arming yourself with the right tools can make the difference between victory and defeat.

Analytics
In wartime, information is power. Going into this fight without analytics is like flying blind through enemy territory. You want the equivalent of the USSSN. When your company’s future is on the line, you want the best analytics available on your side so you can make the most informed decisions possible. Analytics is something that gambling companies are already experts on, but only within the context of gambling-only websites. You have the upper hand on Facebook and mobile platforms, for now. Leverage that as much as possible now to get the most distance between you and the invading force.

Betting mechanics
When you’re fighting tooth and nail for market share, those who use the best tactics have an inherent advantage. That’s why optimizing the betting mechanics in your social gambling game is key to victory. If your opponent is converting better than you are or keeping players more engaged, you’re going to be fighting an uphill battle for eyeballs and dollars. Instead, you should follow Blitzoo’s lead by using A/B testing recorded by robust analytics to continuously optimize your betting mechanics.

Real money
In any battle, resources are the key to victory. The two key resources for any game company are players and money, and they have become increasingly fluid with the advent of the freemium game model and modern distribution platforms. This makes real-money gaming the ultimate weapon: real-money casino games earn more than $300 per player per month. Real-money monetization is so powerful because with it, you have more ammunition that you can use to build games, acquire more players, and retain your most valuable players over the long term. Without it, you will always be outgunned by those that are using real-money gaming mechanics.

With a new battleground set to define the future of the social gaming space, you may need anywhere from one to all of these tools to succeed. Good luck, soldier.

*Playtika is a Kontagent customer.

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About the author: Tyler York does marketing and customer development at Betable, the first-ever platform that lets game developers create innovative new games by legally adding engaging real-money play. Prior to Betable, Tyler was a member of True Venture’s TEC 2010 program before joining Lookout Mobile Security as their third marketing employee.

In the casino industry, so-called “high-rollers” are often referred to as whales. It’s easy to see why: while they might come in with an attitude of being able to beat the house by wagering enough money, ultimately they wind up providing the biggest payouts to the casino. A somewhat disparaging term, to be sure, but it’s easy to understand how casinos view their revenue stream: lots of small change with the occasional big kill.

Facebook used to include a little whale tag of its own, the letter ‘g’ for gamer, that the company would include among the usual demographic data that a Facebook app would usually access. What constitutes a gamer? Oh, just some aggregate statistic indicating a high propensity to spend. No actual transaction history. Facebook would have obviously liked to market this tag to app developers, but given the heat that Amazon went through for price adjustments back in 2000, it have obviously tried put the kibosh on this sort of price discrimination:

To protect user privacy, this API call does not disclose specific purchasing information about a particular player, but instead categorizes players into a broad set. In addition, this call must not be used for marketing purposes, or to increase prices for the set of higher monetizing players.

Fair enough. Facebook is actively protecting its customers (at least with this clause) from price gouging. But the existence of this phenomenon begets a few interesting lines of thought:

1. First, this sort of policy can be quickly handed off to the attorneys for some serious debate. Why is price gouging illegal? What is its legal foundation? Does the discrimination of price fall under the umbrella of discrimination in general, à la race, gender and income? Are sellers barred, legally and morally, from trying to capture more of the demand curve?
2. The second thought is how to work around this sort of clause. The answer is that you have to provide the exact same app experience to everyone, gamer or not. But with some incisive analytics, an app developer can refactor the entire app to target the whales. It seems to me, however, that if one is going to be doing such deep analytics (i.e., using Kontagent), that Facebook’s little ‘g’ tag won’t be contributing that much information (except exposing the developer to perhaps some legal liability).
3. The final thing to realize is that only certain types of app and styles of monetization demand identifying and targeting the whales. These are precisely the apps that target the “long-tail” of the population. We recall the 80-20 rule, wherein 80% of revenue generally comes from 20% of customers. But this rule of thumb only applies to certain business models, not all of them. It requires a savvy investigator with the right tools (again, Kontagent), to identify revenue distribution, key customers, and optimal policy, whether he targets the whales or not.

So when investigating the monetization behavior of your user base, ask yourself this: Are my big spenders simply the long tail of a distribution that everyone falls under, or are they qualitatively different? If so, happy hunting.

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About the author: Owen Martin is a marketing data scientist at Kontagent. He received his PhD in statistics with a focus on Bayesian Inference, and has been working in big data since then. You can contact Owen at @owensmartin or owen.martin@kontagent.com.

We spoke with Jogonaut Founder and CEO Barry Carpe on the importance of data-driven design, and how he’s using analytics to continually provide the best user experience to his players. He also shared some great game marketing and development tips.

Why are analytics important?
Analytics provide insight into what is working well and what is under-performing in any product. Using the data Kontagent provides us, we’re able to quickly identify new retention and monetization opportunities, as well as track game-play trends to improve the overall experience for our users.

What are your primary business objectives as a game studio?
At Jogonaut, our primary business objective has been to curate and refine our content based on player funnels and develop a game that not only drives retention and monetization, but also adapts based on user trends to deliver a more satisfying, entertaining experience.

Kontagent has been instrumental in helping us achieve this goal—the depth of their statistical tracking has allowed us to double our revenue and attract noteworthy brands to our viability as a marketing platform.

What specific insights are you looking to gain—now and in the future?
We use Kontagent kSuite to gain insight on our player activation funnels. For example, we look at how many people take the first desired steps to get them engaged with the game, cost per install (CPI), retention rates, daily active users (DAU), monthly active users (MAU), average revenue per paying user (ARPPU) and session times.

(Read more on The Top 7 Metrics of Highly Successful Social Companies)

Having insight to all of these metrics means we’re constantly able to improve game play and entertainment value for our users, as well as tighten monetization efforts.

Furthermore, we are able to easily track and optimize user acquisition spend based on source, demographic and geography; therefore, we’re also able to build spending curves for each of our campaign segments to gauge the approximate lifetime value of a user. This helps us to determine who the best players are, and then we can focus our marketing dollars toward them.

How are you ensuring the right players find your game?
Our current marketing plan includes social engagement with players, email promotions, a player loyalty club and paid advertisements. Additionally, we’re in talks with several national brands discussing unique co-marketing opportunities.

Engaging our players on Facebook is a no-brainer. One of the first things we did was set up a business page where we could communicate with players and gather feedback about the game. The Facebook page also allows us to send players promotions that help our retention rates.

Research shows that email marketing is still the most effective way to reach an online audience, so we have built up a healthy list of players who opt-in to receive promotions and strategy tips. In addition to email and social marketing, we also have a loyalty program in place where top players in our game (based on spend and achievements) can receive special loyalty items and personal thank-you letters from our staff members.

Any lessons learned so far in acquiring these users?
One note to other gaming companies: When deciding on promotions it’s important to make them impactful. You’ll want to give away bonuses and discounted items that really help a player in the game. This will ensure your click or email-open rates remain high. (Read more on email marketing tips.)

Like most social gaming companies, we run paid ads to help reach new players. Most of the ads we run are Facebook ads though we’re experimenting with a variety of different acquisition channels to target the best, most engaged players.

We’re A/B testing these promotions now, and Kontagent is crucial in helping us determine which campaigns are performing the best, and bringing in the most high-value players. (We’ll be sharing the results in a later post.)

Specifically, what kind of ad campaigns, in-app ads, cross-promotions are you using?
Our main focus—no surprise—is running Facebook ads. That being said, we are diversifying a bit by including banner ads on highly targeted gaming sites and blogs.

Facebook ads are such a perfect fit for any company with a Facebook game though. Your audience is just one click away from playing your game when they see the ad. Another advantage is Facebook allows you to get hyper-specific when targeting users. A recent report suggests social gaming companies are receiving lower cost-per-click rates than brands because we are able to target so well—our own data shows this to be true, thanks to the data Kontagent provides us!

So you’re getting users to click on ads—great. What’s next? What about retention metrics? Are you making changes to your game based on those?
Definitely. In particular, our Agenda mission system is designed to set a steady pace for our users, and based on the metrics we’ve seen with the Agenda, we’ve been able to make subtle tweaks and adjustments to improve retention, monetization and ultimately, entertainment value.

Also, during our BETA phase we noticed that our Day-1 retention rate was quite high, but saw a significant drop-off on Day-7. To help improve these numbers for the official launch, we introduced the ability for players to interact with their friends. Not only are we seeing good signs that this social interaction is increasing retention, the feature is helping us build a great community.

Looking into the future, we see tremendous opportunities in increasing the avenues for social interaction and virality, competition and integration with real world events within OJO AGENT.

Without data, we might not have the insights into what appeals to players. With data, we firmly believe we have the insights to create core features that will drive long-term retention and revenue.

And, once you’ve tuned the game to increase retention rates, what are some other metrics you pay attention in order to iterate and fine-tune your game?
Retention is vitally important to us, but we’re also closely monitoring session time, daily spend, ARPPU and DAU. Now that we are using SpruceMedia in conjunction with Kontagent, from one dashboard we’re able to see our retention rates from user acquisition channels alongside these other important metrics.

This funnel shows player drop-offs from Level 1-8 in OJO AGENT.

Additionally, we’re always monitoring our activation funnels. All OJO AGENT players are guided through a brief tutorial (Level 1 in the image above) before they begin playing the game. We’re constantly checking to make sure there is minimal drop-off during this tutorial. And again, we’re also always checking to make sure the players who complete the tutorial are taking the first series of desired actions that lead to high Day-1 and Day-7 retention rates.

At Kontagent, we firmly believe that the ability to bubble up all the data into an easy-to-read dashboard that is accessible to the entire organization helps our customers all work in lock-step—same data, same goals. Tell us your experience with the kSuite dashboard.
That’s absolutely true. The data visualizations really help us to quickly recognize trends, and identify what’s working and what isn’t. This enables us to spend much less time digging for relevant data and insights, and allows us to instead use that time more efficiently to develop the creative aspects of our games.

It’s about opportunity costs—Kontagent definitely saves time and resources for everyone on our team, from marketing and user acquisition to game development.

An example of Kontagent kSuite dashboard. Note: This is not Jogonaut data.

Any tips/advice for other game developers?
Analytics are the cornerstone of our product development process and we couldn’t be happier with the results we’re seeing.

To say that Kontagent enables us to understand user behavior so we can optimally increase user acquisition, retention and monetization is an understatement.

We would highly suggest all game developers identify their KPIs and track performance over time using software such as Kontagent kSuite. They can group players by acquisition source, demographic and geo-location to identify the most attractive types of players. Then, most importantly, after they have that data, developers must optimize game play based on it. That’s the only way they’ll be able to survive in this free-to-play world.

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About the author: Catherine Mylinh is a member of Kontagent’s storytelling team, where she is head of content marketing. In her former life, Catherine was a news anchor for CBS and NBC. She credits her journalism and computer science roots—she was once a programmer!—for her love of learning and writing about all things high tech. You can contact Catherine at @cat_mylinh.

by kScope guest contributor
Garrett Wilkin, Freelance Writer at ProgrammableWeb

AngelHack brings together start-up communities from around the country; participants build start-up ideas. The competition is judged by top angel investors.

I attended AngelHack in Boston over the weekend of March 3. My primary goal was to talk to developers about analytics. I wanted to see how many had heard of the new potential for deeper analysis of user behavior from service providers like Kontagent. Some of my questions included:

• How were they thinking about user behavior, if at all? Had they already decided that analytics was important?
• If so, which SDKs and tools did they plan to incorporate into their product strategy?
• Would they partner with a specialized company or would they prefer to build an in-house solution?

These were the questions I would seek to answer over the course of the weekend. With thousands of dollars in prizes and start-up perks up for grabs, this hackathon was a bit more serious. The result was a crop of ideas that incorporated a business strategy in addition to a novel technical approach. It was the kind of intellectually stimulating environment which categorizes a great hacking event.

After a short period of idea pitches, the hackers began to mingle and form teams. Several teams came to the event with well formed and, in some cases, patent-pending product designs. Discussions in the small teams focused around which features to include in the prototype and what technologies to use to build them. The idea of how to understand the ways in which the product will be used was not a topic of conversation. After personally speaking with nearly every team in attendance I can say that in general, the idea of tracking actions taken by a user was novel to most teams.

But, in a data-driven world, why was it a relatively novel idea?

Perhaps because we, as engineers, designers, and visionaries, tend to fall in love with our ideas. We tend to get caught up in the excitement of implementing the idea, and indeed, implementation is the focus of a hackathon. But when considering scaling projects well beyond the hackathon, it becomes important to consider how to steer the business strategy along. That requires a bit of detachment from the particular ideas encapsulated in the initial design.

In other words, we need to develop a strategy for knowing when and how to change our idea. Analytics can deliver that knowledge.

It is now possible to store large amounts of detailed user behavior data. More importantly, we have the ability to process these data sets into answers to the questions of design for the application functionality and user experience. Kontagent is one of the leaders in this area and here’s their selling point to hackers: Kontagent can track, store, analyze and compare the actions of millions of users in order to provide insights that can directly influence design changes.

This is a feedback loop that has not existed at this level of sophistication until recently. When a website or an application succeeds, we recognize the genius and creativity of the team behind it. When an app fails to gather users, the team wonders what went wrong. In either case, we attribute the outcome to some degree of mystery and luck.

Classifying and segregating users based on their behavior gives designers and implementers a way to understand exactly what matters in their app.

• Do users respond more to Feature A or Feature B?
• Which features do the most active users frequently use?
• Which features are used just before the app is uninstalled?

These are the types of questions that we should consider during the design of the minimum viable product. They all point to the basic question: is this a good idea or not? If not, how could we make it better?

That’s the fundamental question poised to each start-up as they explore their own specific niche. (And, if there are even deeper questions about user habits once they’re up and running, kSuite DataMine^TM may be able to answer a lot of them.)

Many of the brightest and most creative people still see this data-driven approach as novel, and this signals a great opportunity.

Companies who are already using user behavior as a feedback loop into product design have a head start on their competitors.

Additionally, service providers like Kontagent have the advantage of experience in successfully coaching companies to adopt analytics as a new component of their strategy.

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About the author: Garrett Wilkin is a technology enthusiast. When he’s not programming high-performance financial systems you might find him interviewing start-ups for API-focused articles at ProgrammableWeb or hacking in Node.js. (He’s fallen in love with the hackathon culture.) You can follow him at @garrettwilkin.

Ready the troops

Why? Because to further complicate things, there’s also a new competitor on the battlefield: traditional, land-based casinos.

Guys like Caesars Entertainment and MGM Resorts International have years of experience on slot machines, poker, blackjack, bingo and other games. And, they’re forming alliances with or acquiring game studios to get into the social and mobile spaces.

There’s a lot at stake–from creating new acquisition channels (via social and mobile games) to monetizing players to extending the experience of real-life casinos to the online world. There are only so many whales, and it’s a fight to get their mind and wallet share.

Different battles require different battle plans
Most of the popular social and mobile casino games are electronic versions of the real-life slot machines, poker and blackjack tables, bingo or betting rooms; players either play with each other or they play against the house. They can usually play for free up to a certain amount of virtual currency or level but, at some point, usually need to purchase (with real money!) more virtual currency or levels if they want to continue playing (even if these games don’t offer cash-out options–yet).

No matter which side of the fence you’re on when it comes to your battle plan, there are unique challenges to casino games:

1. For social and mobile developers: The type of player you need to target for casino games may be quite different from the player for which you’re used to making other games. And, even from game to game, player characteristics may change. For example, the demographics for slot machines are different than those for poker games.
2. For online casino game developers: There’s no doubt you’re ahead when it comes to creating online (and perhaps mobile) experiences. However, do you understand the viral hooks and other sharing mechanisms social and mobile developers bake into games to increase their player engagement, and to attract new players?
3. For land-based casino operators: You may have decades of creating engaging casino games, but do you understand the metrics involved in testing and developing optimal social and mobile games?
4. Understanding player personas: These players themselves may have different playing patterns when they’re playing in the social or mobile casinos versus online casinos versus real-life casinos. For example, some games may be played during weekdays, with short time availabilities; others may be played on weeknights and weekends, with longer sessions.
5. Targeting the whales: The way to acquire new players, especially high-revenue ones, may be different; identifying whales in a social network like Facebook may not be easy unless you know which segments to target, which promotions work in this environment, and when they do work in the player lifecycle, etc.

To begin understanding how to optimize your social/mobile casino games, download "The Top 7 Metrics of Highly Successful Social Companies." It's based on our work with hundreds of enterprise customers to identify key metrics they need to track in order to scale DAUs and revenue.

Data is the ultimate weapon
The biggest challenge for social and mobile gaming companies, though, is competition against each other and against the big casino houses with deep pockets to finance their developments and run massive marketing campaigns and promotions to entice the players.

Remember what Blitzoo Games CEO Dave Bezahler said about Slot Spot? That identifying the right key metrics was a key to its success. Well, it’s definitely not an isolated lesson.

Because we’ve worked with some of the biggest names in the social and mobile casino space, we’ve witnessed just how important in-game analytics are, and how they can tell us the most minute player behaviors. With our new kSuite DataMine^TM, we can get even more granular with insights such as:

• How long does it take the player to place a bet?
• How do winning or losing streaks affect segments of players?
• What motivates a player to purchase more currency to keep playing?
• What last three actions did a player take before they failed to return to a game?
• What last five behaviors did a player exhibit before purchasing virtual goods?
• What are the purchase habits of the highest-value gamers or users?

This may be much more difficult to do in the real world because you can’t tag individual, targeted events within a game in order to study your players’ movements. That’s where analytics and metrics can make a BIG DIFFERENCE in the social and mobile games. Good data analytics enable you to determine the best development and marketing strategies to:

• ACQUIRE more high-value players–the whales who will make up most of your revenue
• SEGMENT different types of players to better understand their behaviors within a particular game
• IDENTIFY when and how to offer monetization events, such as promotions and up-sells, that compel targeted cohorts–even the players who are unlikely to pay for any type of virtual currency

As with any war, only the strong will survive. As your troops take on social and mobile casino games, data–and truly understanding how to gain insights from it–is your ultimate weapon. Let the battles begin!

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About the author: David Gutierrez, PhD, is a data scientist and account manager at Kontagent. One of David’s main interests is making the appropriate data capture and analysis so he can understand customer behavior and answer complex business questions. What a perfect fit for Kontagent customers! Contact him at david.gutierrez@kontagent.com or follow him at @degm00.

We’re very proud to announce kSuite DataMine^TM for Analysts, an industry-first, hosted, out-of-the-box data mining option equipping data analysts with unlimited query powers to help social gaming and mobile app developers better engage and monetize users.

It was built on our mantra that data should be accessible. To make the best decisions and move business forward, everyone—from analysts to developers to marketers to CEOs—needs access to the most actionable data.

Equipped with kSuite DataMine and basic knowledge of SQL, you now have free rein to ask questions, test hypotheses, and slice and dice data in any way you wish to uncover information that can be used to help prevent churn, drive in-app engagement, maximize virtual goods sales, analyze user cohorts over time, and more. kSuite DataMine makes it possible to answer questions such as:

• What last three actions did users take before they uninstalled or failed to return?
• What last five behaviors did users exhibit before purchasing virtual goods?
• What are the purchase habits of my highest-value gamers or users?
• Who are my most viral users, and how can I use that information to attract more of them?
• What unusual spending patterns or other behaviors signal the presence of fraud or other anomalies?

Sounds awesome, right? We’re receiving some positive feedback for kSuite DataMine, too. Check it out:

In VentureBeat’s article, Kontagent Launches Its kSuite DataMine Analytics Tool for Monetizing Mobile Games, author Dean Takahashi wrote that kSuite DataMine is “a new layer of flexibility and analysis” that will:

…give social and mobile developers a dashboard so that they can better engage and monetize users. The tool is aimed at database experts, and it allows them to craft their own data queries so that they can extract the most interesting information about users on an anonymous level…

[G]ame companies and app developers can tune their virtual economies and extract more money out of users. The technology is the same that Facebook uses to mine its own database. This data analysis can give developers a good answer about what is the exact cost of user acquisition. That’s important as torrid growth slows down for a lot of applications.

In GigaOm article, Kontagent Turns Data Mining into SaaS for Mobile Apps, kSuite DataMine’s touted as a “smart move”:

What makes it so smart is Kontagent’s realization that out-of-the-box analytics dashboards can only do so much. Even though most startups working in the space have some skilled data scientists on board building the backends that power the pretty metrics and dashboards users see, the applications will always be limited to a select number of broadly applicable and pre-determined features. But that means a lot of wasted data, and a wasted opportunity to facilitate users’ curiosity.

The newest release of kSuite also adds the kSuite Processed Data API, which enables key metrics generated by the Kontagent platform to be integrated into custom tables, spreadsheets or other applications for more flexible, granular analysis. With the ability to automatically refresh the processed data and metrics, you can gain insights more quickly without having to manually pull and export your data sets into third-party tools.

To learn more, go to http://www.kontagent.com/solutions/datamine.

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About the author: Catherine Mylinh is a member of Kontagent’s storytelling team, where she is head of content marketing. In her former life, Catherine was a news anchor for CBS and NBC. She credits her journalism and computer science roots—she was once a programmer!—for her love of learning and writing about all things high tech. You can contact Catherine at @cat_mylinh.

Click here to view our popular webinar, A Look at Building Irresistible Casino Social Games.

by kScope guest contributor
Andrew Hughes, CEO of AbZorba Games

My father once said to me, “Son, everything in life is a gamble. Just know the odds.”

Now that I’m an adult and working in the online casino games business, his words of wisdom are helping guide me (and those like me) through a fast-changing industry.

Gamers’ growing appetite for social and mobile casino app games
Social and mobile casino games are trending, and will continue to do so. Games such as blackjack, poker and bingo, to name a few, have become outrageously popular.

The mobile format in particular offers the “perfect storm” of smartphone penetration, network reliability and app popularity. Throw in live multiplayers, like we did with AbZorba’s Live Blackjack21, and it’s seriously a compelling format.

Its proper, grown-up gaming with proper in-app spending power. Average revenue per user (ARPU) can get in the double digits, and the lifespans are incredibly long! We’ve seen players spend up to $3,000 for virtual chips—chips that they cannot cash out!

Online gambling is a multibillion-dollar market, but what are the risks?
So, why should a perfectly good social or mobile casino game that is generating good revenue from virtual goods take risks by venturing into “real” gambling, as in gambling with real payouts?

Simple: money. Serious money.

Some say Facebook could be worth as much as $100 billion when, and not if, online gambling in the U.S. opens up. Even so, the total global value of online gambling in 2011 approached $30 billion, of which casinos, including poker and blackjack contributed 46 percent. Bingo grew at a nice clip, with $1.6 billion. That’s a 12-percent increase on 2010–in recessionary times! And, the global online gambling market is expected to grow to $46.1 billion by the end of 2015.

When the stakes are this high, we should ask ourselves a few questions:

• Who are these players?
• Do they want to move entertainment gambling (with virtual payouts) to real gambling (with real payouts)?

Land-based casinos and virtual casinos–a clash of titans
As the games industry debates what happens next, the real battles will not be between the likes of Facebook and Zynga but between the land-based and virtual gaming/gambling industries. Each titan is eyeing each other’s territory.

To the land-based casinos, social sites and mobile apps provide a massively untapped opportunity. They know how to build irresistible casino games. But why should the Zyngas and Playtikas of the social world “leave chips on the table”? These guys know the technicalities of social and mobile platforms, and the social hooks needed to increase virality in order to make hit online games. (A sign of the times: Caesars acquired Playtika last year.)

At AbZorba, we too have been inundated with requests from land-based casinos to reach our gamers. Why? Our gamers play live, in an authentic casino environment. They know that that competitive element encourages greater spend than single-player formats.

The questions remain for us all though: If online gambling does become legal, how do we bridge the divide between virtual and real currency? Can the two worlds co-exist? If so, should they?

I’m undecided, but one thing is for sure: As more land-based casinos move into the social and mobile arenas, and more social game devs contemplate creating casino games to “cash in” on this growing genre, the risks of disrupting this ecosystem are real and the stakes are high.

My father’s advice has never rung more true.

Editor’s note:

Earlier this week, we hosted a webinar on this space:
A Look at Building Irresistible Casino Social Games

Hundreds of people tuned in around the globe to hear Dave Bezahler, CEO of Blitzoo Games illuminate a very promising market. As with any gold rush, it’s not just about getting there quickly but about doing it right. We hope you gained insight into how to build social casino games that cash in on this lucrative market.

Want to hear any points again or share them with anyone? Register to view it.

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About the author: Andrew Hughes is CEO of AbZorba Games, a European-based casino games studio. He is focused on building great social casino games on mobile, internet and IPTV through apps. This is Andrew’s fourth start-up in the mobile space. He also also been heavily involved with the Mobile Marking Association. Follow Andrew: @arwhughes and @abzrobagames.

You’re a mobile developer. Smart, sophisticated, but at the mercy of forces that lie outside of your control.

On one hand, everyone believes they hold a precious jewel, developed over months of hard sweat and elbow grease–the next big Angry Birds.

On the other hand, the keys to the kingdom (of users) lie in the hands of middlemen. Ad providers charge you good money to accomplish the two goals you need in order to succeed: scale and reach. But, it’s not that easy to do that, given today’s current mobile app marketing ecosystem.

The current state of things
Here’s the state of the mobile app marketing ecosystem today. Instead of transparency, you have opacity. Developers and marketers aren’t getting the right, timely information they need to effectively optimize their ad budgets and increase their ROI.

While there are many ad providers out there that provide reporting on user acquisition campaigns, there are also many that do not. Or, they provide manual data dumps on an irregular basis. Even when clean data is available, marketers and developers find it hard to efficiently process, match, store and analyze the information.

The point is that in the end, you still have to ingest a non-standardized set of data from all the various ad providers in the industry if/when you can get your hands on it. Because there are no clearly defined industry-wide standards for the measurement, collection and reporting of data from mobile advertising and cross-promotion networks, most mobile developers have trouble deducing meaningful marketing data from their user acquisition efforts. Ad providers, for their part, face the challenge of disparate, non-standardized data requests and protocols from many advertisers and publishers.

The ad provider model
Here’s the 101 on how ad providers work:

Your participation increases their network size and reach by +1. But you, the app developer, need to rise above your peers to make it onto the leaderboards in order to find out how “sticky” or engaging your app is. In some cases, you can participate in this market as both a buyer and a seller of clicks.

All ad providers allow you to be a buyer of clicks (cost-per-click, cost-per-install are the two most common models), which means you are acquiring users for your app. You are charged to participate in this network in order to get in front of other users on other apps or mobile websites.

Some ad providers also allow you to be a seller of clicks and installs (users). This cross-promotion allows you to charge a bounty for users who come into your app and subsequently click on a banner ad within your app that takes them to another app within the network. This can lower your acquisition costs since you’re monetizing traffic that is leaving your app or mobile website (though it could also lower your engagement if users are leaving prematurely).

The “secret sauce” in the ads game are algorithms and targeting features that enable ad providers and mobile app marketers to find the best relevant users. Some ad networks market their “automated intelligence” while others provide a modicum of control through different targeting options that can be selected.

Regardless of how ad providers market their ability to find the highest quality users, at the end of the day, mobile app marketers want the right data, metrics and insights that allow them to analyze, act and optimize on key performance indicators that speak to how valuable those users are from different sources of traffic.

How do you prosper in the fragmented mobile app marketing space?
In the absence of the right data and metrics to act decisively, mobile developers and marketers face two major pain points today in effectively climbing the app leaderboards and optimizing their user acquisition:

1. Visibility into the end-to-end performance of users by marketing channel, from cost to revenue, across all sources of traffic they’re spending marketing budget on to acquire installs (users).
2. The ability to compare the relative performance of each marketing channel, by getting the right data and behavioral KPIs quickly and reliably on the performance of each channel, consolidated into one single report or dashboard.

What does it take to effectively optimize your ad spend and justify the higher bids? In order to successfully run a user acquisition strategy today, you need to test and horse-race multiple sources of traffic where you’re acquiring customers. And, you need analytics.

Apps like Angry Birds were successful through sheer audacity and auspiciousness, with a great deal of fun thrown in. From this, a legion of developers with stars in their eyes followed.

But, in this new mobile app 2.0 economy, something is setting the new successful apps apart from the rest: deep mobile user analytics. Zynga pioneered this approach in social and mobile apps. Nimblebit has also proven that having the right data empowers developers to test and optimize for the highest user engagement. Mobile developers are taking heed and leveraging deep user metrics as a cornerstone of their business models.

Data alone is not a panacea for all your creative ills, but data-driven design is like exercise for your creative intuition. It hones and sharpens your instincts, quickly confirms or debunks your strategy and tactics, and saves on the opportunity costs of simply not knowing why things are happening within your app.

The era of full transparency is here

MATA's open API provides the connection between mobile developers and marketers and ad networks.

That’s why we’re proud to announce the launch of the Mobile Acquisition Transparency Alliance (MATA).

Working with leading industry partners such as Chartboost, PlayHaven and MdotM, among others, MATA has created an open source API designed to standardize mobile ad reporting. Read more at Inside Mobile Apps, and visit OpenMATA.org to learn more.

MATA’s mission is to empower you–whether you’re an ad provider or app developer or marketer–by working toward a standard that all parties can agree on to communicate with each other. The industry’s prospects for growth and credibility lie in pushing forward with more transparency and accountability. Join us to define the future of our industry.

It’s a bold undertaking, but so is your (ad)venture.

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About the author: Aaron Huang has extensive experience in understanding nascent markets, their development and impact on the way people do business. Starting out exploring new markets in China doing portfolio research, he quickly moved into online marketing and built verticals in consumer finance and mobile marketing from zero to millions in revenue in a year. Through his experience in online marketing and Web analytics, he is convinced that disruptive technologies that handle and process petabytes of data for patterns and insights into human behavior represent a paradigm shift in the way the world will do business and make decisions.

The page view is dying a slow, painful death.

That was the bold claim Dan made in November in his post, Page Views Don’t Pay Your Bills… Your Customers Do. (Or users. Or players. They’re good at paying, too.)

It seems we’re not the only ones who believe this.

Andrew Edwards from ClickZ wrote this interesting article, which not only supports Dan’s statement but also mentions Kontagent as one of the companies that’s pioneering the way we measure user engagement in this new world of social and mobile apps. We’re republishing the article with Andrew’s permission:

Web Officially Dead: Sources

San Francisco—In early March, 2012, the venerable Web Analytics Association changed its name to the Digital Analytics Association. Announced at the San Francisco eMetrics conference by none other than analytics ubermensch Jim Sterne, the name change confirmed rumors the Web is officially dead. After a period of lying in-state in Switzerland, services will take place at the old headquarters of Uunet, an ancient provider of bandwidth now remembered only by a weathered stelae in suburban northern Virginia.

If you detect liberal exaggeration above, as well as a bit of fabrication, you’re right. But the kernel of the story is true. The WAA is now the DAA, and for good reason. In fact, many would say it is late in renaming – though I would quibble with that given the lightning speed of change in the digital industries.

Some may say it’s not only overdue but also obvious. We’re hurtling down the information superhighway at speeds equivalent to that of a Bugatti Veyron now, with air dams deployed just to keep us from flying. And yet, as we speed into the “Big Data” mountains and deploy customer-location GPS systems unheard of in a simpler day, we may have failed to notice a few placards along the way: for while the Web may be “dead,” we are still relying on it as the bedrock delivery mechanism for content. Therefore, those placards must be saying something like “Long live the Web!”

So really, it isn’t that the Web is dead – it’s just that we are at last admitting to some of its underlying problems, and are, in fact, beginning to leverage ourselves beyond them.

Chief among the problems inherent in the Web and Web-based content is that while it lords over other media in a cost-benefit analysis; and can process transactions like a cashier on Red Bull, it has a rather embarrassing lack of entertainment value, at least in the traditional sense. Of course, there are those who will submit that Facebook is the new cinema multiplex and LinkedIn is the new corporate cafeteria, and they would have a good point to make.

But they would be wide of the mark as follows: the Web may not be dead, but by comparison to other media, it’s deadly dull! If it hadn’t been the cheapest publishing technology ever invented as well as the most measurable, it would have stayed at DARPA where it started. Only now are we enjoying bandwidth speeds and technologies such that the Web now can be the home not merely of rich media but compelling media.

Compelling media? Yes! As opposed to informational, search-oriented, transactional, utilitarian media, compelling media has dominated the Web to date. In fact, as compelling Web (and mobile and app-based) media becomes more common, many will wonder what all the fuss had been about in the early days. They will have forgotten that it was all about availability of information and collection of usage data – but that’s a different story.

Let’s take a look at one dimension of compelling media and how it’s starting to blossom from the fruitful earth of addressable content. One of the keynotes at eMetrics San Francisco was given by an engaging pair of digital media experts: Rand Schulman and Pelin Thorogood. Both of them have been at the cutting edge of Web measurement and digital communications for years. And they contend we are now shattering the Website-centric engagement paradigm in favor of a new world of “apps, sapps, and mapps.”

Apps, we already know. They live on smartphones and iPads. They use addressable communication technologies but are most certainly not “Web pages” – they are far more customized and unique. “Sapps” are social media apps. Companies like Kontagent and Buddy Media are building these and enable measurement of them; sapps may be embedded in websites or they may be standalone, but they are unique from Web pages in some important ways. First, they can be decidedly game-like (often measured by Kontagent) – in fact, they can be games pure and simple. Second, they can be task-specific, multi-functional, and self-measuring. “Mapps” are mobile apps that, among other things, take advantage of location services to target their audience. Some of them can sense when you are getting near a store that wants to reach you, and entice you with an offer; and entice you with another offer if you’ve moved away from the location – much like the old billboards that used to say “You missed the Red Apple Rest Stop! Turn back at Exit 17!”

By way of example, Rand and Pelin talked about an automobile dealership that drove far better conversions by adding an “Angry Birds”-like social app on their Facebook page (which is, the last time I looked, a Web page); essentially putting a compelling entertainment factor into the mix that went well beyond “pick a color.” Engagement and conversion metrics soared. People enjoyed playing the game. It was fun! And it was self-measuring. How many times can you say “win” before it loses all meaning?

Zynga, they said – quoting Zynga – is an “analytics company masquerading as a game company”; and they made note of how Zynga measured how much more often FishVille players bought clear green fish as opposed to other kinds of fish; hence, by building more fish like the clear green ones, it was able to convince users to increase fish-spend with actual dollars rather than imaginary ones! Remember: compelling, self-measuring media makes the difference.

Finally, they talked about a company called Kontagent, which offers a bolt-on analytics suite for social apps and games. Their example included Gaia Online, a substantial social network, and how Gaia used Kontagent measurement technologies to understand campaign effectiveness by country and user segmentation to identify its most valuable game users: both by average revenue per month and by virality; and by using compelling game content plus measurement, it was able to drive average revenue/user from $6 to $17 per month!

At a recent OMMA conference in New York, a fellow panelist said that while analytics used to claim victory in a 5 or 10 percent increase in effectiveness, now marketers are looking for multiples rather than percentages.

With compelling self-measuring apps, sapps, and mapps, the way forward is beginning to clarify: the Web is part of the delivery mechanism; while compelling content is going to drive conversions way beyond the ordinary. And self-measuring modules will prove the victor.

“More social and mobile game developers [will] try to cash in on the slots and bingo craze and more land-based casino brands [will] look at social and mobile acquisitions and licenses.”
-Inside Social Games, March 2012

A new breed of gambler is emerging
The 20- and 30-somethings who grew up with Facebook and Twitter are social. They shop online. They use their mobile phones to “check in.” They share their lives with their friends worldwide, in real time. And, now, they expect their gambling experience to follow suit.

For social casino game developers, this trend represents enormous opportunity. Some of these new gamblers are whales, but most are minnows. Who’s going to catch the whales? The hunt is on.

Online or on the strip?
Slot Spot, Double Down Casino, Zynga Poker, Slotomania, Lucky Gem Casino–these are only a few of the big new players on Facebook and mobile. Of course, Caesars, IGT and other land-based casino operators are now getting in on the action, and we expect to see others enter the fray.

But, what works on the Vegas strip doesn’t necessarily translate to Facebook. And, what works in other social game categories might not fly in the casino genre. So, how do you build a social casino game that cashes in on this lucrative world?

Want to hear how one company is doing it?

In partnership with Blitzoo, we presented this complimentary webinar (#KTwebinar):
Attracting More Whales: A Look at Building Irresistible Social Casino Games

We shared insights on what it takes to build a successful social casino game, including:

• Secrets behind the “overnight” success of Blitzoo’s Slot Spot
• Best practices from Kontagent’s experience working with top names in the social casino genre
• Insights that you can immediately put into practice

If you missed it, you can register to view it on demand.

P.S. Caesars CEO Gary Loveman gets it. The former Harvard Business School professor says he’s been able to significantly improve the company’s profits because he runs Caesars like an economist, using data to make EVERY. BUSINESS. DECISION. Will you be able to compete with him?

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About the author: Catherine Mylinh is a member of Kontagent’s storytelling team, where she is head of content marketing. In her former life, Catherine was a news anchor for CBS and NBC. She credits her journalism and computer science roots—she was once a programmer!—for her love of learning and writing about all things high tech. You can contact Catherine at @cat_mylinh.