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.

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.

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.

Using customer data to understand and optimize your social or mobile application can produce huge returns. But, there are also dangers of relying too heavily on data without the proper level of controls, data science and overall process. Fortunately, there are now tools, technology and talent available that are enabling studios and devs to be more data-driven.

Here at Kontagent, we’re all about data: how to get it; how to store it; how to query it; how to interpret it; and, ultimately, how to make the best data-driven business decisions.

Our CMO, Dan Kimball, was invited to speak at Casual Connect in Hamburg this month on what it takes to become a data-driven organization. He shared lessons learned from our experience working with some of the top grossing social and mobile game studios. It’s actually a pretty fun presentation since he compared it to learning how to ski (Dan’s an avid skier). If you’ve ever hit the slopes, you’ll appreciate this.

Click on the image below to see the entire presentation–you’ll be able to evaluate your “data-driven score” as an org, and identify the seven keys factors to leveraging your data effectively. We’ll add a recording of the presentation as soon as it’s available from Casual Connect.

Click to view the presentation on Slideshare

What about you? Are you taking the same approach to creating a data-driven culture? If so, how has your business benefited from it?

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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.

Can social gaming influence the presidential election?

Big data needs data scientists, or quants, or Excel jockeys
No wonder big data is hot in venture capital this year. Forbes has been running a series on big data, and many of the business leaders it has interviewed say “people underestimate the degree to which big data can fundamentally change their business.”

What was especially interesting is that while technology has made storing and aggregating data much faster and more affordable, some of these experts say “keeping the data in its raw form can provide insights into long tails, allowing firms to identify and target relatively small cohorts that fall outside the normal distribution… when you get down to the everyday work of data scientists and analysts, in a very quiet average work-a-day way, they are finding a lot of insights that are becoming increasingly critical to the way companies are doing their business.” Read full article.

We’ve seen this firsthand. At Kontagent, our data scientists have been instrumental in providing insights to our hundreds of social customers. (We process millions of messages daily.) We believe, while data is awesome, you need domain expertise to make sense of it all. That’s Moneyball lesson #3: Look at the data that really matters; it may not be obvious at first.

A profile of the social gamer - Click for full view (Courtesy of Flowtown)

Profiling the social gamer
Flowtown created this infographic on the social gamer. It says more women play social games than men do, and goes into details such as education, income and user behavior.

Ngmoco looks to blend core appeal with mobile usage patterns
Ngmoco general manager Ben Cousins has big plans for the mobile company’s Swedish branch. As the mobile market continues to evolve, he and his team hope to find new ways to blend elements of high-end console gaming with the more casual usage patterns of the platform.

According to Cousins, while some developers have already tried to capture console-like experiences on mobile, they’ve overlooked the reasons why users play mobile games in the first place.

The fight is on for mobile game players
Gamasutra’s Kris Graft writes: “We know where Apple users will get their games, but the Android marketplace is still famously fragmented. That’s not driving away companies from the platform, however, as they can’t ignore the massive install base of Android.”

And where opportunity lies, so does competition. Many of the players are trying to team up with major carriers, such as AT&T and Verizon. Which partnerships should you be aware of?

Bionic Panda sets its sights on Android
Speaking of social gaming networks, here’s another one: Bionic Panda.

Its executives think that mobile devs who are trying to build a casual-style game that anyone can play easily, that reaches as many people as possible, should focus on the Android Market. And, it hopes it can use Google Wallet to better monetize users.

The idea is good enough to raise money from Norwest Venture Partners, Google Ventures, 500 Startups, and several angels. Read full article.

What’s old is new again:
Atari is reinventing itself for the era of social and mobile games
Last spring, Atari released Atari’s Greatest Hits for iOS. The game featured classic arcade games such as Centipede, Lunar Lander and Missile Command. It has been downloaded more than 3.5 million times from the App Store. And, it was recently made available in the Android Marketplace, further expanding the market for Atari products.

Atari CEO Jim Wilson thinks the company has a leg up on the competition since discovery and acquisition are major challenges for many mobile app developers: “The great thing about Atari and its very brand is that it is recognizable. You understand what it is, and frankly, in the App Store or the Android Marketplace, discoverability is a big issue for people who are releasing their games. One of the benefits of Atari is that it creates instant recognition and discoverability in the App Store and the Android Marketplace.”

The company has slimmed down to 65 employees, most of whom are targeting the mobile gaming platform. Read full article.

Watch out for Windows
Several writers are predicting that Microsoft will disrupt the smartphone market–they say at CES last week, the majority of the tech press were already rooting for Windows Phone. Despite the fact that Windows Phone only has approximately 50,000 apps, “Microsoft has all the tools in place to enlarge [a serious developer] community.”

• Business Insider: Here’s Why Robert Scoble And The Rest Of The Pundits Are Wrong: Windows Phone Will Be A Success
• Seeking Alpha: Microsoft, Nokia Have A Real Chance Of Disrupting The Smartphone Market

Just a coincidence?
Fast Company says Instagram, which received the honor of the App Store’s “App of the Year” for 2011, could be available on Windows Phone before Android (even though Android users have been eagerly awaiting the launch of the photo-sharing app).

According to Fast Company, “a source recently left the impression that the Windows Phone team has possibly been working with the folks from Instagram.” Here’s why some think Instagram would go to an OS with such a low market share.

Can gamers change the presidential election this year?
And now, onto the U.S. presidential election. Digital advertising firm Engage is currently experimenting with online gamification for some of their political clients. They also offer a social media platform, called Multiply, that integrates gamification techniques into a candidate’s website. For example, if you visit the website of House Speaker John Boehner, you can earn badges for checking in from the speaker’s home state of Ohio, or by linking the page to your Facebook account.

“The user gets instant gratification, a sense of involvement and participation and gratitude,” says Patrick Ruffini, Engage president. “The campaign gets data.”

Campaign organizers say there is a new breed of voters–one that was raised on the fast-paced interactions of the social Web. They hope this data helps political candidates better organize and target potential voters, donors and volunteers. How effective this is remains to be seen, but Ruffini reminds us: “You can’t campaign on games alone.”

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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.

The ARM funnel shows a typical customer lifecycle, which is comprised of three stages: acquisition, retention and monetization.

Mobile app developers and marketers can gain a huge advantage by looking at the way social app developers scientifically build and optimize their games around customer data on social platforms. They use that data to learn about what is and isn’t working in their applications, and iterate quickly for increasingly stronger returns. From Acquisition to Retention to Monetization–the three stages in the ARM funnel–successful developers have created entire organizations around data-driven design at each level and across all facets of their businesses.

At Kontagent, we’ve witnessed firsthand the ARM funnel’s crucial role in the success of a large majority of studios that publish games on Facebook–and now on iOS and Android as well. Insights garnered from this model help to focus resources and marketing investment. And, having a perpetual flow of data and a supporting data science infrastructure (with the expertise to act on it), has enabled game studies to acquire users more profitably. Teams of data scientists and developers at Zynga, Popcap, Crowdstar and Gaia, for example, have measured, iterated, tested and optimized relentlessly to acquire more users at better customer acquisition cost and with higher yield ratios than most. It’s no coincidence these are the same guys succeeding on mobile platforms as well.

I’ve broken down each branch of the ARM funnel at a very basic level below.

Acquisition: Figure out what audience performs best in your game and how to acquire members of that audience in the most effective, lowest-cost manner possible; from ads, to cross-promotions with other games, to install exchange networks, to viral channels. KPIs = Cohort Customer Acquisition Cost (Cohort CAC); Cohort ARPU and Retention by Channel; Cohort ARPU and Retention by Campaign; Acquisition Conversion Funnel

Retention: Keep that audience engaged for as long as possible. Find fall-off points where users leave. Learn how to encourage sharing with friends. KPIs = Avg. Session Length; Day 1 Retention, Day 7 Retention, Day 30 Retention; Custom Event Funnels; User Lifetime Event Distribution; k-factor (virality)

Monetization: Get these users to pay and to keep paying over time, optimizing their lifetime values (LTV) to the greatest degree possible. KPIs = % Paying Users; Avg. Revenue per User (ARPU); Avg. Revenue per Paying User (ARPPU); Purchase Conversion Event Funnel

As the free-to-play model continues to grow and dominate in mobile, just as it does in social, it’s no surprise that the ARM funnel is the right framework for measuring customer economics and per-user profitability in mobile as well. Just like social app developers, mobile app developers must understand and optimize acquisition, retention and monetization if they are going to succeed.

Still, mobile developers have a long way to go. As more social companies (including Zynga) move aggressively to mobile, getting smart about data is increasingly important. Kontagent believes those mobile developers who recognize the importance of data-driven app development throughout the ARM funnel will be well-positioned to lead the space.

I’ve outlined the biggest challenges and opportunities facing mobile game developers, relative to measuring and optimizing around the tried-and-true ARM funnel:

Discovery & Acquisition

Biggest Challenges

• The biggest hurdle is getting discovered and competing against companies with deep pockets who can muscle their way up the App Store rankings.
• Mobile ad networks are massively fragmented and difficult to target high-yielding cohorts of users (either through behavioral or demographic segmentation).
• Understanding ROI (on iOS in particular, tracking from ad/source to install to monetization used to be impossible).

Biggest Opportunities

• Reach large audiences at a relatively inexpensive cost-basis by advertising on cross-promotional networks and partnering with other developers with high daily active users (DAU) counts.
• Segment users by acquisition channel, and optimize around those producing the highest per-user ROI. Analytics make it possible to see differences between each source: organic, viral, cross-promotion and advertising.
• Build a great, highly engaging game! The better the experience, the more players will tell their friends. Word-of-mouth is a huge organic driver of installs for mobile devs right now, so focus on gameplay, and reap the benefits. Use analytics to tell you where users are losing interest in your app.

Engagement & Retention

Biggest Challenges

• Although testing and iterating is how social devs have found success on Facebook, rapid iteration is not so easy or fluid on mobile platforms like iOS. It can take from three days to two weeks to receive approval for each new version from the App Store, making it difficult to fine-tune to optimize on the fly.
• Many users don’t update their apps regularly, resulting in outdated, or “dirty,” data from the combination of “old” and “new” app version users. This makes it challenging to iterate and improve your app based on user data without being misled, unless your data tools easily filter users by app version.

Biggest Opportunities

• Design the app to use data-driven back-end systems to control user experience in-app when a connection is available on the device. This way, developers can dynamically tweak play balance, economy balance, etc., and then perform split-testing to further optimize customer economics.
• Use an analytics solution that allows filtering data by app version, location and device type (for Android). This is very important in addressing the dirty data issue, and in determining which platforms and devices in which to commit time, effort and resources.
• The free-to-use model proliferating on the App Store provides customers a risk-free opportunity to experience an application, which in turn provides app developers with free insights into their virtual economies and player incentives to gain the most effective conversion rates.

Monetization

Biggest Challenges

• Android users are still experiencing more friction in payments, resulting in lower average revenue per user (ARPU) and lower monetization rates in general.
• To gauge the quality of users, developers need insight into the in-app behavior of their paying users, which marketing channel they came in from, and ultimately how profitable their customers are by each marketing channel on an ROI basis.
• Developers need tools to monetize players that may not make in-app purchases.

Biggest Opportunities

• Optimize game mechanics that encourage purchasing, while balancing engagement. Use analytics to see how the two play out using custom event tracking and funnels.
• Individually track each and every revenue channel, from in-app purchase to advertising yields, understanding the best price points, for-sale item mix and conversion funnels–ultimately using data to understand and optimize the economy underlying the game.
• Employ messaging tactics to remain connected with users on new features/offers, e.g., push notifications and email. Oftentimes, re-engaged users will monetize at a higher rate if the user experience is tweaked and re-targeted to them.

To conclude, remember this: While social and mobile platforms have their differences, user behavior in-app is very much the same. To that end, using the ARM funnel to measure and optimize your mobile application is just as applicable as it is for social app developers. At Kontagent, we are strongly encouraging mobile app developers to not start from square one. Indeed, take advantage of the important lessons we’ve all learned on Facebook and other social platforms to improve the acquisition, retention and monetization of your game, and ultimately your bottom-line.

Click on the image to register.

If you’d like to learn more on how using the lessons learned in social can work for you in mobile, you can view our webinar, From Social to Mobile: A Playbook for Building Successful Games. We have an expert panel lined up, and will discuss the challenges of developing games and applications in mobile that didn’t exist in social, as well as provide tips and tricks for monetizing that you can use to improve the profitability of your mobile apps.

Republished from:
Social Times: How Lessons Learned in Social Will Give You a Head-Start in Mobile
Gamasutra: Applying Lessons Learned on Facebook to Mobile App Development

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About the author: Josh Williams is president and chief science officer at Kontagent, where he oversees strategic revenue projects, data science and R&D. A serial entrepreneur, Josh has led two successful start-ups to large exits (one in big data, one in gaming). Josh is an investor and loves collaborating with other entrepreneurs.