Monetization Simulation

Monetizing, Advertising & Marketing Advertising Networks
1

Hi Guys,

I’ve released a casual game recently which I want to invest in a CPI campaign.

With the rising cost of CPI, I put revenue against expenses and I wrote a small simulation for it.

  • I plugged in the following daily retention curve (0.434 * (day**-(0.426))) corresponding to a 43-19-10 retention profile for (day 1-7-30).
  • Daily new users (purcahsed users) - 1,000
  • The CPI cost varies between $0.6 to $1.5
  • ARPDAU varies between $0.05 to $0.15

So with each day, it simulate purchasing 1000 users, retaining old users and computing the income using arpdau, the balance is calculated over 365 days.

My game doesn’t have such a great retention curve but I’m working on improving it - without it, the rest is pretty much useless.

The following table illustrates the balance after 365 days with respect to varied CPI and ARPDAU:


ARPDAU/CPI     0.6            0.7            0.8            0.9            1              1.1            1.2            1.3            1.4            1.5
0.03           -69179.71      -105779.71     -142379.71     -178979.71     -215579.71     -252179.71     -288779.71     -325379.71     -361979.71     -398579.71
0.04           -19039.62      -55639.62      -92239.62      -128839.62     -165439.62     -202039.62     -238639.62     -275239.62     -311839.62     -348439.62
0.05           31100.48       -5499.52       -42099.52      -78699.52      -115299.52     -151899.52     -188499.52     -225099.52     -261699.52     -298299.52
0.06           81240.57       44640.57       8040.57        -28559.43      -65159.43      -101759.43     -138359.43     -174959.43     -211559.43     -248159.43
0.07           131380.67      94780.67       58180.67       21580.67       -15019.33      -51619.33      -88219.33      -124819.33     -161419.33     -198019.33
0.08           181520.76      144920.76      108320.76      71720.76       35120.76       -1479.24       -38079.24      -74679.24      -111279.24     -147879.24
0.09           231660.86      195060.86      158460.86      121860.86      85260.86       48660.86       12060.86       -24539.14      -61139.14      -97739.14
0.1            281800.95      245200.95      208600.95      172000.95      135400.95      98800.95       62200.95       25600.95       -10999.05      -47599.05
0.11           331941.05      295341.05      258741.05      222141.05      185541.05      148941.05      112341.05      75741.05       39141.05       2541.05
0.12           382081.14      345481.14      308881.14      272281.14      235681.14      199081.14      162481.14      125881.14      89281.14       52681.14
0.13           432221.24      395621.24      359021.24      322421.24      285821.24      249221.24      212621.24      176021.24      139421.24      102821.24
0.14           482361.33      445761.33      409161.33      372561.33      335961.33      299361.33      262761.33      226161.33      189561.33      152961.33
0.15           532501.43      495901.43      459301.43      422701.43      386101.43      349501.43      312901.43      276301.43      239701.43      203101.43

So even with such great retention curve, to be on the side the arpdau should be at least $0.08 the CPI below $0.9…

What do you think?

2

Hmm… You start your table with $0.03 ARPDAU? I heard of quite a lot games / apps averaging less than $0.03 LTV. I also think your formula preditcting 43-19-10 DAU is very optimistic, but you know that I guess.
Good games on this forum make $0.05 per download. Average games / apps make $0.005 - $0.03 per download. Great games make $0,1.

If you want to have positive ROI on CPI just looking at CPI and users lifetime value, you need to have a great game and implement in app purchases for consumable goods (like coins). Then, you could get >$1 per download.

People usually advertise their games with CPI when they want to get into the charts and they think it will boost their organic downloads. So, when they invest $10,000 for CPI and they pay $0.5 per install, they think they will get 20,000 downloads right from the CPI campaign, (alert: from here its not actual data, just an example) 60,000 more downloads from organic growth thanks to higher visibility in the store, and 20,000 more from word of mouth from all these people who downloaded the game. So, they think they pay $10,000 for 100,000 downloads. In the process they might get some free press publications, popular blogger videos, feature from Google and many various possibilities to get even more visibility. Some people won’t download the game if it doesn’t have ~100k downloads.

So, I have a better model for you: with a casual game, I predict you’ll get around $0.04 per download. For a low volume campaign, you’ll pay $0.40 per install. You will therefore loose $0.36 everytime you buy an install. Your ROI will be -90%.