Marketing 101 Part 3: Advertising Part I
Everything you wanted to know about advertising but were afraid to ask.
Just yesterday I was talking to the owner of an online strategy game and when I mentioned my services him his reply was "I don't need any advertising." For those of you who have read the previous articles you certainly know there is much more to marketing than advertising; however, advertising is still an important part of any marketing plan and tends to be the first thing people think of when they think of marketing.
Many indie developers tell me that advertising never pays for their products. It is true that if your game is converting far below 1% that finding advertising with positive ROI is pretty unlikely. However, as you approach a 1% conversion rate (even if you are somewhat below it), advertising becomes an increasingly important factor.
Part 1: The Math
Before you jump to the conclusion that advertising won't work for your game, you need to do a little math and find out some key figures. These figures are useful for many more things than advertising, but for now we will concentrate on their advertising implication. If you are planning on launching a game soon, make sure that you are collecting all the necessary parts to calculate all of these figures.
First you are going to need to know your conversion rate. Conversion rate is calculated as follows:
Number of sales / Number of downloads
You also need to know the likelihood of a visitor to download your product. This can be found by taking the number of clicks / number of downloads. A good site should have 20% or more. If you are below 20% then you may be having trouble with your site design or your target demographics.
Part 2: The Demographics
Next, hopefully, you can get some demographic information on your customers. Some useful demographic questions are: Age, Occupation, Gender, Income, Hobbies, and statistics on what their PC is.
Using demographics you can get a good grip on who your customer is. You can divide these up into probabilities by taking each sale and examining it's demographic. If you recall way back to middle school algebra, you probably wondered why the average "mode" would ever be used, since everything back then seemed to revolve around "mean" and occasionally "median." This is why! Figuring out who the most likely buyers are is a key to demographic mining. If ages 18-24 comprise 50% of your purchases and ages 50-65 the other 50% you don't want to know the MEDIAN buyer is 35! You want to know that the modes are 18-24 and 50-65.
Mode is defined as the most frequent value of a set of data
Also interesting could be sex: Are those buyers mostly male? Mostly female? Evenly distributed?
Occupation is probably not too important; however, if your game is about plants you may find that a lot of the people who buy your game have some kind of botanical background. This could be useful in determining where to advertise, but odds are most occupational demographics you will be able to make assumptions about or simply discount it as a factor. Same thing goes with hobbies; the odds are you should be able to assume whether your game is geared towards a specific hobby. However, demographic research may yield things that you hadn't thought of before.
Income is always a factor, but rarely in videogames do you see it as a determining factor. It is not often that people with incomes of $60,000 are more prone to buy a game than people with incomes of $30,000. If it IS a factor, you may want to look at income as a direct relation to education (therefore, directly related to occupation) as a clue to why that is. This means income analysis should usually come before occupational or hobby analysis and only if the data is very strange should you begin figuring out why. Advertising should never be done on income data alone as a factor.
Last but not least I mentioned PC configuration. Really, you should know this yourself. If your game requires a 800mhz processor you had better come to the conclusion that your buying demographic is 800mhz or above.
A parting note: Keep in mind that demographics can show the people who are willing buyers as well as the people who are NOT willing buyers. If you find that a group of people are the most likely to download your game it does NOT mean they are the most likely to make a purchase! Keep this in mind when polling your users for demographic information.