Marketing Mix Model will optimize your ROI

AlterLife
7 min readDec 9, 2021

Puzzle and strategy games require a thought process combined with planning and problem-solving skills. A good player is generally well equipped with a tactical warfare mindset, going well beyond the basic thinking level to achieve the goal and execute the task at hand.

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Unlike traditional AAA and RPG games, puzzle and strategy games have a lot of mainstream casual audiences, high in numbers. Mainstream audiences mean a fat userbase and a healthy revenue for the organization if they play their cards right. While many organizations make use of this, there are a lot of cases that leave a lot to be desired, brimming with untapped potential.

Getting new users to sign up and play your game is only one part of the puzzle, and that’s the easy part. How do you retain your existing users? Increase your Return on Investments (ROI)?

Customer Retention or Player Retention is one of the biggest challenges plaguing gaming studios.

Customer Retention is crucial for ROI

Customer retention and a consistent ROI is an issue that looks like the tip of the iceberg but is an issue that is deeper with a multitude of layers. Every customer is unique, and no business organization can chalk out a perfect plan that satisfies every customer.

Is your customer happy with your game?

Are you focusing on getting new customers instead of focusing on existing ones?

Are your ads and marketing material personalized for effective targeting?

The last one is an imperative aspect in this day and age. Personalization is king, the golden standard.

The Personalization Puzzle

Gaming is a global phenomenon today. Any game worth its salt is played globally with hundreds of thousands if not millions of users. Even content titans like Netflix have decided to dip into gaming because that’s how lucrative the video game market is.

But how does an organization overcome the hula hoops of the personalization challenge for millions of its users?

With the advent of high-speed internet and ‘always online’ culture, it’s not as challenging as it once was. Online ads and social media advertising have brought a lot of options to the table for marketers.

Market Mix Modelling (MMM)

Market Mix modeling is a Machine Learning method that helps enhance several marketing inputs carried out for maximum Return on Investment (ROI). With MMM, businesses can understand the role of each marketing input in terms of how much they contribute towards achieving organizational goals like sales and how much to spend on each marketing initiative.

Return on Investment is the crown jewel

The desired output here is to extract not only the maximum possible ROI, but also ROI from individual marketing channels using MMM. To do this, businesses should be able to understand which channels are performing well, and which aren’t. This way, the budget from poorly performing channels can be redirected towards channels that are working well.

Measurable performance of marketing efforts

Digital marketing techniques have had the issue of not being able to be measured for efficiency for a while. But with MMM, marketing efforts and promotions, as well as uncontrollable aspects, are differentiated and success elements can be determined based on individual inputs.

Challenges of Player Retention in games

Attrition is something that plagues every game publisher. For a successful revenue model and consistent ROI, player retention is of utmost essence.

Acquiring new players is an alternative, albeit with repercussions. According to a study, it costs businesses five times as much to acquire a new player when compared to retaining an existing one.

When the whole purpose is to optimize marketing spending and increase ROI, player acquisition as a replacement and alternative for retention fails on all grounds.

Is customer acquisition important? Yes.

Can it be used as a technique to replace the efforts of retaining an existing player and increasing overall ROI? Not at all.

But how can gaming businesses optimize customer acquisition and increase ROI without compromise?

The role of MMM in Strategy and Puzzle games

The gaming industry is in such a favorable state that even non-gamers are venturing into it, spending a lot of time playing and even spending in-game.

Strategy and puzzle games have a mainstream global audience, and it is vital to understand the contributing channels.

If gaming businesses start doing this, they won’t be splurging an astronomical budget on marketing activities.

Enter Marketing Mix Model, which plays a crucial role from a ground level. When some key data points and drivers come into the mix, the marketing model mix starts painting a picture of fruition.

Marketing Mix Model has two components:

  1. Base Sales
  2. Incremental Sales

Base Sales

Base Sales are the sale numbers a business churns out without any advertising efforts from their side. Factors like word of mouth and other economic factors can affect base sales.

Base Sales also constitutes Base Drivers, but for MMM in Puzzle and Strategy gaming, we’ll focus on Incremental Sales and Drivers.

Incremental Sales

Sales generated by marketing efforts from the marketing team fall under this. Promotions, print ads, digital marketing, email, and social marketing are a few methods of incremental sales. In the end, each of these is weighed and compared in terms of their contribution towards total sales.

Incremental Drivers

With Marketing Mix Model, there are elements like Product launches, Events, and Conferences for promotion and awareness. But from a gaming point of view, not everyone is a Tier A publisher with a stupendous marketing budget. So let us focus on incremental drivers widely used as an industry standard.

Media Ads

Media Ads constitute the fundamental and foundational aspect of MMM. Online ads, email marketing, and social media advertising are the ‘core’ incremental drivers for the current generation of games. YouTube, Facebook, Twitter, Instagram, and Snapchat are brimming with potential customers.

  • Social Metrics- These metrics include engagement and user actions on social media like- views, likes, comments, shares, subscriptions, and follows. It is imperative that businesses target users who engage with their content and social media marketing activities to convert them into customers.
  • Behavioral Metrics- User’s digital footprint, customer touchpoint, purchase/repurchase rate fall under behavioral metrics. These metrics paint a picture of each customer and provide valuable customer insights.

Puzzle and strategy games studios can effectively target probable customers in specific online platforms with the help of the above metrics using the Market Mix Modelling.

Marketing Mix Model brings Measurable ROI to the table

The biggest gripe of online-social advertising has always been the lack of feasible methods to measure ROI on their marketing spend. It has been a challenge to justify spending on multiple social media channels when organizations can’t precisely identify the source of traffic.

With Marketing Mix Model, gaming organizations are able to analyze ROI for individual channels and not just a culminated digital spend.

Optimize Marketing Spend

With the ability to measure ROI from individual channels, and behavioral metrics of the user, gaming studios can huddle up in real-time and tweak their marketing spend towards respective channels.

Studios can cut down marketing budgets on channels that aren’t meeting social metrics and convert users into customers.

Channels that meet or exceed the standards can use the additional funds.

A studio that markets on Twitter, YouTube, Instagram, and Facebook; but only sees a feasible marketing ROI in Instagram and YouTube; can tweak the spend to correct course and optimize ROI.

Personalized User targeting

Behavioral metrics provide studios with customer profiling. Vital metrics with a digital footprint and the player profile are valuable for any marketer.

When it comes to player acquisition, these metrics play a vital role in only targeting users that match various criteria instead of spamming everyone. The players also have the benefit of targeted ads that fit their requirements.

For player retention with MMM, player data that includes likes-dislikes, purchase-repurchase history plays a critical role in providing user personalization. Studios can drastically reduce player churn rate and attrition, with the added bonus of an increased ROI.

Forecast Trends

With MMM and predictive analytics, gaming studios can see campaign marketing performance and trends in real-time. Instead of changing methodologies after their marketing campaigns, there can be real-time tweaks and quality of life improvements to the marketing campaigns so that the ROI is optimum!

Conclusion

There is a global market for puzzle and strategy games, and there is a cannibalization competition norm in the gaming market.

Be it large studios with an extraordinary marketing budget or small indie studios with humble funds, the goal is the optimization of ROI via efficient marketing practices for sustainable long-term growth.

With Market Mix Modelling, studios can eliminate a few marketing risks; and avoid overspending on unnecessary channels for player acquisition and retention.

As with anything, there are a lot of offerings in the market. And game studios have to choose the right expert for their requirement. Market Mix Models are complex, and only an organization with a 360-degree understanding of the market with rigorous research, which has expertise in data and analytics, can create a robust solution-specific marketing mix model.

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