Shifting away from traditional attribution analysis in the mobile app and gaming industry

Mobile games are one of the largest categories in the app market, and the domestic market size has exceeded 1 trillion yen (※7.5), capturing the demand for staying at home due to the spread of COVID-7. Globally, the market size of smartphone games increased 7255% from the previous year to 2 billion yen (※XNUMX). Although the number of users has stagnated due to the lull in stay-at-home demand, it can be said that the development and operation industry for smartphone apps, including mobile games, is doing well.

In this environment, companies that operate smartphone apps and games are investing large amounts of marketing costs, mainly on social media and other digital media, in order to promote KPIs such as attracting customers, new installs, DAU (Daily Active Users), and in-app purchases.

Most companies in the mobile app industry use a mobile measurement provider (MMP) to understand and optimize the return on advertising costs. Major digital media companies such as Meta (formerly Facebook) and Google provide measurement tools for their own advertising platforms, but MMPs provide attribution analysis across digital channels by an independent third party.

*1:Online and mobile game industry market size, trends and company information | NIKKEI COMPASS

*2:Smartphone games become a trillion yen market, with various strategies to capture the "stay at home" trend - Sankei News

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Traditional MMP attribution analysis used by smartphone app operators

MMP is specialized for mobileMulti-touch attribution (MTA）.

MTA has become the measurement method of choice for companies that invest their advertising dollars primarily in digital channels. MTA analytics relies on individual-level data to measure advertising effectiveness.

But,Strengthening regulations on personal information protectionThe digital advertising environment is undergoing major changes. The key changes are as follows:

• A few years ago, data privacy regulations such as the General Data Protection Regulation (GDPR) were implemented in Europe, the United States, and other countries. These regulations strengthened restrictions on advertising and behavioral tracking at the individual level, making cross-media and platform attribution more difficult.
• The world's most popular web browsers, including Safari, Firefox and Chrome, are gradually moving away from third-party cookies that underpin much of the digital advertising ecosystem, instead moving towards more privacy-conscious technologies based on aggregated data.
• Starting with the iOS 14 update, Apple will no longer be able to obtain IDFA (Identifier for Advertisers) without the user's permission. IDFA is an ID assigned to a user's device and is used to measure advertising contact points and in-app behavior. In other words, it has become an "opt-in" system, and in Japan, the average opt-in rate as of the second quarter of 2022 was 2% (※ 21).

In short, the methods that many mobile app and game companies have used to measure the effectiveness of their advertising spend are no longer as applicable as they once were, and they need to find alternative approaches to measure the effectiveness of their advertising spend in a holistic way, rather than relying solely on digital-specific attribution methods.

*3:iOS 14.5 and above with Adjust and TikTok for Business: Japan's ATT opt-in rate averages 21%

Stable and resilient attribution analysis with MMM

MMM (Marketing Mix Modeling)MMM is often thought of as a method of measuring advertising effectiveness that is primarily used by more traditional companies with high spend on offline mass media, but even digitally-focused advertisers, such as mobile app and game companies, can benefit greatly from the comprehensive understanding that MMM analysis provides.

This is becoming even more important now that it is becoming more difficult to collect the individual-level data that underpinned MTA. MMM uses daily or weekly aggregated data, so individual-level data is not required. In addition, since the indicators incorporated into the analysis can be highly customized, it is an analysis method that can be flexibly used in various industries, including mobile apps and games. In addition to marketing measures, the analysis model can also incorporate how external factors such as competitors' advertising status, weather, and holidays affect your company's marketing activities and KPIs.

Because MMM does not rely on personal data, it can be used more stably and for a long time as a marketing optimization foundation.

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Considering MMM as a marketing effectiveness measurement system for smartphone app and game businesses

By effectively utilizing MMM, companies that operate mobile apps and games can comprehensively analyze the impact of various factors, such as their own marketing activities (promotional measures, release of new products and updates, in-app events, etc.) and uncontrollable external factors (promotions by competitors, macroeconomic conditions, the impact of COVID-19, etc.), without relying on the collection of personal data, and quickly and effectivelyData-driven decision makingcan be executed stably.

At XICA, we provide systematic analysis of MMM using our own proprietary technology and algorithms. We also have a system in place where consultants can support our customers in implementing MMM and making the most of it.

If you are interested in our services, please contact us hereContact us.

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XICA Co., Ltd. Marketing Team