Mike Evans, SEGA’s CMO

SEGA Forever is not just an initiative to democratize retro gaming. It is also a smart strategic move to develop a stable revenue stream in today’s highly competitive games market.

SEGA’s mobile publishing strategy is based on three key pillars: (1) SEGA Forever – building an audience, gathering data to understand players’ needs and ranking the relative demand for classic IP’s on mobile. (2) The second pillar expands on the network by building simple IP based experiences from the ground up for mobile. A combination of rewarded ads + IAP and insight from SEGA Forever helps align the experiences with the audiences’ gaming preferences for strong cross-promotion affinity and enhanced network monetization. (3) The cross-promotion network and stable revenue stream from the first two pillars support top grossing bets.  

We sat down with our client Mike Evans, SEGA’s Chief Marketing Officer and the man leading this ambitious initiative, to talk monetization and learn more about SEGA Forever.

 

Can you talk a little bit about the strategy behind SEGA Forever?

The vision behind SEGA Forever was to change how the world plays, rediscovers, and shares classic gaming experiences. We were looking to bring two decades of classic games that have been spanning every kind of console era, since SEGA’s first home console SG 1000. We knew that a lot of these games have been pirated and exist online. So we wanted to find a way to democratize retro gaming.

There are 3 different pillars behind SEGA Forever strategy. The first pillar is network generation. By releasing the games roughly every two weeks, you’re able to build and maintain an audience across the portfolio. That DAU base generates a stable revenue stream and an active, passionate audience for consumer insight. We run ongoing surveys to understand the demographics and the psychographics of the users along with the relative strength of classic IP on mobile. That’s very useful data for SEGA.

The second pillar of our publishing strategy is about creating simple IP experiences from the ground up for mobile. A combination of rewarded ads + IAP and insight from SEGA Forever aligns the experiences with the audiences’ gaming preferences for strong cross-promotion affinity and enhanced network monetization. I was interested in growth areas of the app stores with low brand penetration, broad appeal, and mid-core monetization potential. SEGA has a wealth of IP, the tricky part is understanding elasticity, how fans’ gaming tastes have matured, and carrying through the core attitude of the brand into a reimaged gaming experience.

The third pillar is top grossing bets. The first two pillars set a stable revenue stream for the business whilst we work on longer term and more complex projects. Building experiences which have affinity with the audience we’re growing and being able to cross promote a section of them helps reduce UA costs and maximizes margins.  

Let’s talk about monetization. Which questions do you ask yourself when choosing a monetization model?

This largely depends on the game concept and the genre/demographic it’s targeted at. Once the direction is defined by the publishing strategy we’ll start thinking about the monetization model and game concept in tandem. You can’t divorce the two and expect success.

If ads are part of the scope, we’ll identify how they can enhance the user experience and opportunities to fit into the core loop. We prototype on paper first and want to understand where they’ll deliver value both for the player and support the game’s revenue success.  

What are the key metrics you take into account to evaluate your Monetization and UA performance?

On the monetization side, we look at the impressions/DAU, ARPDAU, ad opt-in rate by placement, fill at geographic, platform and ad unit level, CPM’s and crash rates. Auction metrics like bid depth, winning bid average and cleared rate and – although not strictly a metric – if using banners, we’ll also keep a careful watch on the caching logic and refresh rates.

For the buy side, we bid off a predicated LTV and measure performance by yield over a specific duration. We look at early indicators of quality like D1 – D7 retention along with creative performance, ad, and social engagement.

What criteria do you use to select ad networks and mediators to display ads on your games?

For SEGA, mediator selection is a function of the ad formats, networks, and connection types supported – efficiency is important but you need to understand what their core competencies are vs. bolted on functionality. The granularity of controls for fine tuning revenue performance, the ability to multi-tag demand sources in the waterfall, whether they can serve in-house ads (for free), and automation like a CPM optimizer will hone how and where your ad ops resources are focused. If they are running their own demand it’s important to understand how they prioritize it and what override controls exist. I’d also recommend running due diligence on the SDK and integration process along with spending some time with the account and technical teams you’ll be working with.

Finally, as ad tech is rapidly evolving and you’ll want to benefit from the latest technology to support your quest for greater yield it’s worth reviewing historical product evolution and their committed roadmap. Advanced (header) bidding is a growing focus right now. Asking developers to swap out mediators is never met with a warm reaction so it’s vital to spend some cycles evaluating the right path for your app.

Ad network selection is based on what we’re trying to achieve, for example, better performance on Android, COPPA networks, more brand, format-specific or geo-based demand, competitive floors and so on. Generally, we evaluate a network’s breadth and quality of demand, formats, ability to help support on integration challenges, connection options and SDK stability (SDK’s for new partners require a demonstrable business upside).

You’ve mentioned header bidding. Is this an option to increase ad revenue?

Header bidding was a game changer in the desktop space – improving transparency, control and access to quality supply. True programmatic is in its infancy in mobile, many mediators and startups are working on their solutions so it’s difficult to determine the potential financial impact at this stage. 20% uplift is often floated as a good benchmark.

That said, conceptually there’s a lot to be excited about, a truly unified auction will flatten the waterfall and remove many of the inefficiencies this set-up is guilty of, buried demand sources will have a fair chance to compete and the additional competition and access will undoubtedly have a positive effect on yield. In balance, Dev teams won’t realize the maintenance/cost savings of a single SDK solution just yet as new mediation tech will need to accommodate both SDK and S2S demand sources whilst the industry evolves.

How is Libring helping you and your team achieve your goals?

A key pain point was maintaining dozens of ad networks reporting APIs along with validating data accuracy in our BI. Libring unifies all the APIs and provides a single feed to our BI, additionally, they actively report on timeout errors so our engineers can spend more time focusing on creating great games.

That was the original reason for moving to a third party solution like Libring’s. There are many fringe benefits which have surfaced since – the UI/UX has helped to make data more readily accessible particularly for those who can’t run SQL queries – the power pivot table is great for this and helps us reprioritize our waterfall or quickly dive into performance questions.

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