Zynga pulls out the 2022 app monetization strategy crystal ball

Scott Koenigsberg, chief product officer at Zynga, joined Rina Hahm, head of NA-West at Meta Audience Network, onstage at this year’s GamesBeat & Facebook Gaming Summit to talk about what publishers and developers should expect from upcoming ecosystem changes, and what they need to prioritize in 2022.

Market consolidation and vertical integration

Market consolidation and vertical integration in the gaming and ad tech industries has been growing as well, driven by the need to create more efficient marketplaces by consolidating supply and facilitating the use of first-party game data to enhance publishers’ ability to both monetize and acquire players.

“We’ll continue to see consolidation in ad tech as a way of both creating a more efficient market and providing more visibility in the data stream, as well as reducing the number of parties in the middle, to increase the amount of each dollar spent eventually reaching the publisher,” Koenigsberg said.

This consolidation has led to the development of the “all-inclusive network,” which encompasses both the demand side and the supply side — or the sell side — in creating more efficient marketplaces. As the data is leveraged from both sides in one platform, you can leverage it to improve user acquisition and player monetization.

Emerging trends

Cross-play, where players play the same game across mobile, PC, and console, has been another new development over the past year, and becoming more and more common. It’s building deeper multi-screen engagement for wider audiences of players. In turn, that will increase repeat purchases from core players, as well as monetize players that the mobile ecosystem hasn’t necessarily had access to. It will also offer the opportunity to advertise across not only a variety of formats, but to have a single campaign across mobile, PC, and console.

“That hasn’t been done very much in the past, and so this is an exciting opportunity for advertisers and publishers alike,” Koenigsberg said.

Battle passes of course will be a continued innovation focal point, with more personalized tiers for different layers of players, and additional tiers and segmentation. Emerging platforms such as blockchain gaming, gaming in the metaverse, and connected TV experiences also increasingly lend themselves to IAP as they get more sophisticated and as more players come on board, as a way to both monetize and retain players.

Zynga’s monetization and growth strategies

Zynga recently established its own ad network with the acquisition of Chartboost.

“That was to counteract some of the changes that were occurring in the eco system, but also to give us more control over how we monetize our users and how we’re able to acquire them,” Koenigsberg said. “It also reduces the number of players in the supply chain between Zynga and its advertisers and buyers. We’re leveraging our first-party data to expand relationships with advertisers, as well as increasing the ability to target players in our own network through Chartboost.”

The company is continuing to adopt more in-app bidding, which is even overtaking traditional waterfalls, he added.

“We’re shifting from a hybrid model to a majority of real-time bidding,” Koenigsberg said. “We’ll focus on increasing competition amongst bidders, as well as optimizing pricing through better segmentation.”

They’ve also modified their network mix based on the industry changes that have occurred on both the ad monetization and the user acquisition side, as well as the types and numbers of waterfalls they have in place.

“It’s really no longer a one-size-fits-all situation,” he said. “We have to be a lot more adaptive and flexible about how we approach monetization and acquisition and we’ve had to carefully evaluate our network mix and the types of campaigns we run.”

In an increasingly competitive environment, it’s important to increase that top of the funnel as much as you can, he added. They’ve also put a renewed focus on cross-promotion within their own network, and their ability to acquire once and retain forever across their network of games. In addition, there’s been more focus shifted to Android. Additionally, they rely more heavily on probabilistic attribution, and they’re actively testing non-in-app channels, like connected TV, linear TV, radio, podcasts, and influencers to better understand their impact on overall performance.

The state of the watch-to-earn progression mechanic

Games are continuing to double down on watch-to-earn in particular as a key progression mechanic; some are developing their core economies with watch-to-earn built in from the start, rather than adding it later. In FarmVille 3 it’s a way to earn energy and premium currency. In Empires and Puzzles, it gives players core economy items to help progression. In Words with Friends, you can progress much faster through the solo challenge if you use watch-to-earn rather than waiting for the timer.

“In all cases, the key thing is there is a very obvious value exchange,” Koenigsberg said. “The player trades their time for something they really want so they can continue playing the game. It’s a win-win for everyone. It creates a positive perception of the advertising and the brand, potentially, because players are given value for their time. Because it’s opt-in, it’s not a gate. It’s something that players choose to do, and they’re rewarded for their investment of time.”

Opportunities for publishers in 2022

More tech partners are experimenting with bringing brands to games in a variety of new ways, even using embedded, non-clickable ads that might not have a call-to-action, but help increase reach and frequency.

Another big opportunity is a renewed focus on ad quality. There’s been a proliferation of non-standard ways to close an ad, or it takes multiple screens to close an ad. That’s leading publishers like Zynga to develop some of their own ad formats in order to have better control over the player experience. This also lends itself to more brands advertising in games, since you can control the experience and provide a pristine player experience with the brand. Ads should not be too disruptive, rushed, or too frequent. If a user exchanges their time for value in a watch-to-earn experience, they should get something that they truly value.

“As brands look to enter mobile game advertising, they’ll be looking at more quality inventory with great user experience,” he said. “Those that have those capabilities will be better positioned to deliver against their budgets.”

Advertisers and publishers are also finding new ways to drive adoption rates for opt-in and targeted ads. Though it’s not an easy thing to do, it’s worth the time and effort to experiment extensively to try and get it right.

“There’s nothing more valuable than enabling ad targeting and educating players about the value of a personalized ad, why it’s a better experience,” Koenigsberg said. “From a business perspective it obviously provides better yields and better monetization.”

There will also be more innovation around segmentation and personalization, from the types of offers and rewards that are extended to people, and when those things are offered, to improve the player experience and overall engagement with the product, as well as advertiser performance.