Tilting Point doesn’t just develop its own free-to-play mobile games. It helps other app publishers run performance marketing campaigns and, in some cases, even funds their game development.
“We call it progressive publishing,” said CEO Kevin Segalla, who founded the studio in 2012.
Over the last few years, Tilting Point has invested tens of millions of dollars into a user acquisition fund to help indie developers with the tech and expertise they need to stand out in what’s become a hugely competitive market.
A successful game has as much to do with how fun it is to play as with how well it’s able to optimize its marketing, Segalla said.
And so Tilting Point developed its own in-house user acquisition (UA) technology called DORA – dynamically optimized revenue automation. To round out its tech stack, the studio also recently acquired Gondola, a game monetization startup that focuses on rewarded video ads and in-game offers. Although Tilting Point makes most of its revenue from in-app purchases through its own games and the developers it supports, ad monetization is a growing focus.
“We’re getting better at the advertising side of the business,” Segalla said, “especially rewarded video.”
AdExchanger caught up with Segalla.
AdExchanger: What is the Tilting Point spiel in a nutshell?
KEVIN SEGALLA: We first developed the team and technology to do UA for our own games, and then we realized we could use it to help other developers scale. A lot of developers make great games, but they don’t have the UA experience they need to create the right ad assets or the tools they need to optimize.
We decided to start offering our UA services to other developers we feel have a real ability to scale. There are a lot of developers out there that just don’t have the funding, and we’re really good at figuring out return on ad spend. Because of that, we can fund UA campaigns with great accuracy and without taking undue risk.
It’s better than developers going to a traditional performance marketing agency.
What’s wrong with traditional performance agencies?
There is a fundamental disconnect between developers and agencies. Agencies make their profit based on how much developers spend, so their objective, of course, is to get developers to spend as much as possible. But a developer’s objective is to spend profitably.
We align our objectives closely with those of the developer. The better we do with campaigns, the quicker we get a return on ad spend, and that means profit for everyone.
Would you describe yourself as an agency, a mobile publisher or some kind of hybrid?
We’re a mobile publisher with our own games, and that’s why we’re able to work with other publishers to optimize UA and maximize the lifetime value (LTV) of their games. There’s always a point where the cost per install (CPI) gets too high and the LTV goes down. When that happens, we can work with a developer to improve their game, which is the role of a traditional publisher, but that leads to a better CPI-to-LTV ratio, which is more profitable for everyone.
Machine Zone also had its own user acquisition tech-for-hire called Cognant, which never gained traction. It got shut down in 2018. How are you different?
One of the reasons it maybe didn’t work for Machine Zone is because they were approaching it as a services business. We take more of a partnership approach. The goal is always to get into a deeper relationship with developers. That’s where you win from a revenue standpoint. The services business itself isn’t the highest-margin business and, frankly, neither is UA, but it’s a stepping stone to bring us into a closer relationship with great developers. That’s progressive publishing.
What is your approach to monetization?
We focus on free-to-play games, because they have a long LTV curve, which means a longer revenue curve. People will play for one year, two, even three, as opposed to hypercasual games, which people play for a much shorter time. Hypercasual tends to be completely advertising driven, while free-to-play is more about in-app purchases.
What about rewarded ads to diversify your revenue mix?
Our ad revenue is almost all driven by rewarded video, because it’s got something for everybody. Players win because they can advance more quickly in a game if they’re willing to spend 15 or 30 seconds watching an ad, and it helps us because we’re able to monetize gamers that wouldn’t normally convert into paying users.
As a publisher ourselves, we’re seeing more ad dollars going into rewarded, including from brands, which means there’s finally recognition that there’s this massive audience of gamers out there waiting to be reached.
What else do you get from the Gondola deal beyond rewarded video optimization technology?
They help with dynamic pricing, being able to offer a package based on demographics and country. There’s no benefit showing someone an expensive offer for, say, $9.99, in a country like India, for example, where people traditionally don’t spend a lot of money on in-app purchases. Rightsizing the price alone can double LTV in a tier-three country.
Then again, you don’t want to serve a 99-cent package to someone who has shown that they’re willing to spend $9.99 or even $99. This is about targeting people with something they’re willing to spend on.
Is there enough ad creative out there to feed all of the UA campaigns running? When I play games, I see the same cross-promo ads over and over and over again.
It’s an important subject. There’s nothing that drives powerful UA more than the right creatives, and the only way you can get there is by constantly building new ones.
For each new game, we have 11 new creatives a week, a combination of video and static. At any given time, we have 7,000 different ads running across the world. We use in-house technology we developed called CAT – creative automation tools – that allows us to very quickly create new ads, automatically format them and produce them in different languages.
Our system is constantly testing ads against the different demographic cohorts we’re targeting, picking out the least effective ones, replacing them and re-testing. That’s what you have to do to really optimize UA.