Who Am I? CEO @ AdParlor

We deliver over 300,000 new users every day for the largest game developers in the world

Agenda

Fundamentals of Facebook advertising

How any ad Network makes money – eCPM

CTR and CVR why they matter

Average CPA Rates in certain countries

Factors that effect pricing

How much does it cost to get to 1M users?

Rising cost of user acquisition

Changing market conditions

Fundamentals of Facebook Advertising

Fundamentals of Facebook Advertising

Some Basic Terms

CTR - Click Through Rate

CVR - Conversion Rate

CPM - Cost per 1,000 impressions

eCPM – Effective cost per 1,000 impressions

CPC – Cost per click

CPA – Cost per acquisition

4 Clicks from 10,000 Impressions = 0.04% CTR2 Installs from 4 Clicks = 50% CVR4 Clicks * $0.30 CPC = $1.20 Cost$1.20 Cost / 2 Installs = $0.60 CPA

Ad Server Fundamentals Any ad network wants to choose the ad with the highest

eCPM. o This is true for Facebook and amplified by their focus on user

experience.

A high CTR means you can buy cheaper clicks

A high CVR means you get more conversions for those clicks

Generally Facbook Gaming ads o Have a CTR between 0.04% and 0.14%o Have a CVR between 40% and 60%

The Importance of CTR

Impressions CTR Clicks CPC Bid eCPM

1,000 1.00% 10 $ 0.50 $ 5.00

1,000 0.10% 1 $ 0.50 $ 0.50

1,000 0.05% 0.5 $ 0.50 $ 0.25

1,000 0.01% 0.1 $ 0.50 $ 0.05

impressions CTR Clicks CPC bid eCPM

1,000 1.00% 10 $ 0.10 $ 1.00

1,000 0.10% 1 $ 1.00 $ 1.00

1,000 0.05% 0.5 $ 2.00 $ 1.00

1,000 0.01% 0.1 $ 10.00 $ 1.00

Difference in eCPM based on the CTR [hold CPC bid constant]

Difference in CPC bid based on the CTR [achieve $1.00 eCPM]

Seeing the Effect on Facebook

The Importance of CVR

Difference in eCPA based on the CVR [holding cost constant]

Cost Clicks CVR Conversions eCPA

$ 5,000.00 10,000 40.00% 4,000 $ 1.25

$ 5,000.00 10,000 50.00% 5,000 $ 1.00

$ 5,000.00 10,000 60.00% 6,000 $ 0.83

$ 5,000.00 10,000 70.00% 7,000 $ 0.71

Factors That Effect CPA Rate

Country Targeting

Creative

Target Market

Flow from click to conversion

Application Saturation

Market Conditions

Desired Volume

Looking Deeper Into Some Factors

Country CPA

United States $ 0.75

Canada $ 0.65

Hong Kong $ 0.55

Taiwan $ 0.45

Malaysia $ 0.20

Country Creative

Desired Volume

You CANNOT discuss price unless you discuss volume. Some advertisers pay $0.50 CPA one day and $2.00 the next day depending on desired volume

A Bit More About Countries

CountryCountry Population

Facebook Population

Targetable Game Players

United States 312,038,00 133,550,860 44,766,580

United Kingdom 61,792,000 23,668,560 7,787,380

Canada 34,350,000 14,717,921 4,933,540

Australia 22,559,000 7,887,360 2,768,160

TOTAL 430,739,000 179,824,700 60,255,660

How Much Does It Cost To Get 1 Million Users?

I cannot answer this question unless I know

o Within what time period?

o What is your games appeal?

o How big is your target market?

o Are you counting viral users?

Here Are Some Averages

Assumptions

o Time period ~ 6 months

o Traffic is ~70% English Speaking

o Open to both M/F 18+

Genre Spend to get to 1M Users Average CPA

HardCore $ 1,472,027.99 $ 1.47

Casual $ 863,819.30 $ 0.86

Virtual World $ 596,907.12 $ 0.60

Little War 小小战争

Total traffic : 300K Users

Total spend: 158K USD

CPA: $0.52 USD

Campaign length: Four Months

137,978

151,547

75,871

Grand Chinese-speak-ing Area

Just in Thailand

In North America

United StatesUnited KingdomAustraliaCanadaSouth AsiaEurope

DDtank

All time Conversions: Total traffic : 315K Users

Total spend: 305K USD

CPA: $0.97 USD

Campaign length: Three Months

118,086

15,708 15,540

United StatesUnited KingdomCanada

MOW 帝国文明

Total traffic : 150K Users

Total spend: 275K USD

CPA: $1.83 USD

Campaign length: Three Months

All time Conversions:

Rising Cost of User Acquisition Over Time

Game is Saturated and CTR/CVR drop – pay more per user

“Once you’ve acquired the majority of the early adopters, CPIs in a particular market can increase by 3-5x from your Day 1 CPI! Fortunately, this change doesn’t happen overnight. Refreshing

creative, creating a compelling message, and refining your target audience are the best ways to combat application saturation”

– John Marsland,Acquisition Manager

Changing Market Conditions

Thank You

Hussein Fazal – CEO AdParlorHussein.fazal@adparlor.com

@hussein_fazal