Presentation delivered during the Adjust Mobile Spree Event by Jonathan Winters (from Miniclip)

1. ROI AND THE K-FACTOR:
MEASURING VIRAL VALUE-ADD
June 2017

2. Before we start…
Who is that?
 Head of User Acquisition at Miniclip
 Leading all UA activities for mobile games portfolio
About Miniclip
 Developer and Publisher for Mobile Games
 Popular for Casual Sport Multiplayer Games and .io Games
© Miniclip – Jonathan Winters 2

3. 8 Ball Pool – Competitive and Social
© Miniclip – Jonathan Winters 3

4. We are not just ‘buying’ single users.
Those users are people with their
own social networks. (At least most of the time.)
© Miniclip – Jonathan Winters 4

5. Viral Growth in the App Economy
© Miniclip – Jonathan Winters 5
App Invites
• In-app benefits
• Discounts
• Free Content
Social Media
• Social Trend
• Viral Post
• Influencer
Word of Mouth
• Talking to Friends
• Recommendation
• Chat Groups
App Growth = Organic + Paid (+ Virality)
Discovery
• App Store
• Search
• Top Charts
Examples

6. What makes an App viral?
 Easy to access
 Recognisable
 Effortless transfer to others
 Integrates existing communication channels
 Sharing has meaning
 Triggers motivation
© Miniclip – Jonathan Winters 6

7. Viral Effects influence the
performance of paid Acquisition.
© Miniclip – Jonathan Winters 7

8. ROI Calculation – Example
© Miniclip – Jonathan Winters 8
CPI Installs IAP LTV Ad Rev LTV D180 ROI
Campaign A $3.50 22,500 $2.80 $0.30 -11%
Campaign B $3.20 14,000 $2.70 $0.30 -6%
Campaign C $3.90 23,100 $3.00 $0.30 -15%
Free-to-Play Game
Measuring ROI on D180 after Date of Acquisition:

9. ROI Calculation – Example
© Miniclip – Jonathan Winters 9
CPI Installs IAP LTV Ad Rev LTV D180 ROI
Campaign A $3.50 22,500 $2.80 $0.30 -11%
Campaign B $3.20 14,000 $2.70 $0.30 -6%
Campaign C $3.90 23,100 $3.00 $0.30 -15%
Free-to-Play Game
Measuring ROI on D180 after Date of Acquisition:
This is not looking great… or is it?

10. ROI Calculation – Example
© Miniclip – Jonathan Winters 10
CPI Installs IAP LTV Ad Rev LTV D180 ROI
Campaign A $3.50 22,500 $2.80 $0.30 -11%
Campaign B $3.20 14,000 $2.70 $0.30 -6%
Campaign C $3.90 23,100 $3.00 $0.30 -15%
Measuring ROI on D180 after Date of Acquisition:
These are not the only installs if we consider the K-Factor

11. So… What is the K-factor?
It is a Growth Rate.
K = Number of Invites * Conversion Rate
K-factor > 1 User Base growths
K-factor = 1 Steady State
K-factor < 1 User Base declines
© Miniclip – Jonathan Winters 11

12. If K-factor = 0.5
© Miniclip – Jonathan Winters 12
10
Acquired
Users

13. If K-factor = 0.5
© Miniclip – Jonathan Winters 13
10
Acquired
Users
Bring in 5
more Users

14. If K-factor = 0.5
© Miniclip – Jonathan Winters 14
10
Acquired
Users
Bring in 5
more Users

15. If K-factor = 0.5
© Miniclip – Jonathan Winters 15
10
Acquired
Users
Bring in 5
more Users

16. If K-factor = 0.5
© Miniclip – Jonathan Winters 16
10
Acquired
Users
Bring in 5
more Users
~10
Additional
Users

17. More Cycles are difficult to attribute
© Miniclip – Jonathan Winters 17
Time
Complexity
Lower Reliability as we move
through more cycles.

18. More Cycles are difficult to attribute
© Miniclip – Jonathan Winters 18
Time
Complexity
Lower Reliability as we move
through more cycles.

19. Be careful not to overestimate
the K-factor.
© Miniclip – Jonathan Winters 19

20. For example: If K-factor = 4
© Miniclip – Jonathan Winters 20
…
…
Time

21. If K-factor = 4
© Miniclip – Jonathan Winters 21
…
…Not Realistic!
Reaches whole
world after 16
cycles.

22. How do we measure the K-factor?
© Miniclip – Jonathan Winters 22

23. K-factor Measurement is limited
© Miniclip – Jonathan Winters 23
High
certainty
Low
certainty
Organic Search
Word of Mouth
Post-click Ad Installs
Cross Promotion
Shares on Social Media
Post-view Ad Installs
App Store Ranking Brand Awareness
Incentivised
Referrals
App Store Visibility
Influencers
TV
Outdoor Ads
PR

24. Define what is part of the K-factor
© Miniclip – Jonathan Winters 24
High
certainty
Low
certainty
Organic Search
Word of Mouth
Post-click Ad Installs
Cross Promotion
Shares on Social Media
Post-view Ad Installs
App Store Ranking Brand Awareness
Incentivised
Referrals
App Store Visibility
Influencers
TV
Outdoor Ads
PR

25. Define what is part of the K-factor
© Miniclip – Jonathan Winters 25
High
certainty
Low
certainty
Organic Search
Word of Mouth
Post-click Ad Installs
Cross Promotion
Shares on Social Media
Post-view Ad Installs
App Store Ranking Brand Awareness
Incentivised
Referrals
App Store Visibility
Influencers
TV
Outdoor Ads
PR
Exclude Organic Growth, Cross-Promotion, Paid Installs and App Store Influence

26. Measuring the K-factor for Paid Installs
Baseline Analysis
Define Attribution Window
Define Virality Cycle
Time Periods
Test Environment
Stable Amount of Installs
Stable Ranking
Small Market for Impact
© Miniclip – Jonathan Winters 26
1 2
Organic Paid Uplift

27. Measuring the K-factor for Paid Installs
Tracking Referrals
Custom Events:
App Invite
Invite Accepted
Track as many Referrals as
possible for CVR.
© Miniclip – Jonathan Winters 27

28. Making the K-factor visible
© Miniclip – Jonathan Winters 28
Organic Paid UA
Daily Installs without Paid UA

29. Making the K-factor visible
© Miniclip – Jonathan Winters 29
Daily Installs with Paid UA
Organic Paid UA

30. Making the K-factor visible
© Miniclip – Jonathan Winters 30
Daily Installs with Paid UA
Organic Paid UA
Organic
Uplift
Not all
K-factor

31. Differentiate Uplift for K-factor
© Miniclip – Jonathan Winters 31
0
0,2
0,4
0,6
0,8
1
1,2
1,4
0
200
400
600
800
1000
1200
1400
1600
1800
Paid Install Uplift Ratio
Uplift includes:
Word of Mouth
(Incentivised) Tracked Referrals
Increased Search
But also…
Untracked Paid Installs
Increased App Store Discovery

32. Once isolated, the uplift shows the
viral growth from Paid Installs.
© Miniclip – Jonathan Winters 32

33. Challenges of Viral Measurement
The K-factor is not constant
• Seasonality
• Product Life Cycle Stage
• Product Iterations
• Market Size & Saturation
• App Store Featuring
© Miniclip – Jonathan Winters 33
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
K-factor over time

34. Challenges of Viral Measurement
The K-factor is not constant
• Seasonality
• Product Life Cycle Stage
• Product Iterations
• Market Size & Saturation
• App Store Featuring
© Miniclip – Jonathan Winters 34
0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
K-factor over time
Different K-factor per UA Channel?

35. The K-factor needs to be monitored
and updated.
By Platform, Channel and Geo.
© Miniclip – Jonathan Winters 35

36. ROI Calculation – including K-factor
© Miniclip – Jonathan Winters 36
CPI Installs IAP LTV Ad Rev LTV D180 ROI
Campaign A $3.50 22,500 $2.80 $0.30 -11%
Campaign B $3.20 14,000 $2.70 $0.30 -6%
Campaign C $3.90 23,100 $3.00 $0.30 -15%
Free-to-Play Game
Adding the viral installs to the ROI calculation:
eCPI Installs IAP LTV Ad Rev LTV D180 ROI
Campaign A $2.91 27,000 $2.80 $0.30 6.5%
Campaign B $2.66 16,800 $2.70 $0.30 13%
Campaign C $3.25 27,720 $3.00 $0.30 1.5%
K-Factor
= 0.2

37. © Miniclip – Jonathan Winters 37
 Attribution Window
 Virality Cycles
 Viral Time Window
 What do you consider
part of the K-factor?
 Test Market
 Baseline Analysis
 Tracking Referrals
 Isolate Uplift Installs
 Compare conversion rate
from tracked Referrals
 Calculate average K-factor
 Ratio between Paid and
Organic Installs
 Repeat K-factor analysis
 Apply K-factor to ROI
calculation
 Observe App Store
Discovery
Define Measure Monitor

38. Thank you!
38© Miniclip – Jonathan Winters