Game Design, Programming and running a one-man games business…

Game sales & marketing analysis over 14 days

I’m dumping my brain here in case it’s interesting to review strategy, from a business POV. I’m looking at the last 14 days of positech, as if I’m playing a strategy game.

The income over those 14 days is roughly $60k, taking into account direct sales, Steam GoG and the apple app store. there are some other relatively trivial sources too. This is pretty high, because obviously Democracy 3 is relatively newly released, and was just coming out of a sale.

Spending on marketing & PR during this period is relatively tiny. about $2,600 in adwords, another $1,000 ish on another network, and some PR costs, put the whole promotional cost at about $4,600 or roughly 7% of revenue. I could clearly spend more if I saw a decent opportunity to grow the customer base for my games. With this in mind, I just plonked down another $2k today for a splurge on reddit ads coming up.

So how does this all translate into growing the direct-sales juggernaut? well… Direct traffic at positech.co.uk over this period is 54,000 visits compared to 71,000 visits to steam (you get to track this data now). The average steam visitor duration is 31 seconds compared to 82 seconds on my site. This suggests steam is pretty leaky.

In terms of those users I get coming to my site, what are the best sources? The biggest chunk is ‘organic search’ which you don’t have much direct control over, other than trying to get more reviews and doing some SEO, which is a nebulous goal. The most analyzable category is ‘referral’ which is 24.6% of traffic, so quite small. They ‘convert’ in terms of hits on buy pages etc at 11.7% compared with 52% on organic search….interesting. If I narrow this down to people who show up on the Democracy 3 homepage, that figure goes up to 23% of referral visitors converting.

Luckily I can analyze further…

if I look at the Democracy 3 search campaign on adwords, that cost me £266 in that time, or roughly $441. For that, I got 618 clicks, at £0.43 a click ($0.77). This resulted in 72 confirmed buy page hits. I doubt all 72 bought the game. If we assume half of them do, and split the direct & steam takes to get roughly 80% of the money, then I got maybe 36*(0.8*24.95) which is  $718, or a profit of $19 a day. Pretty pathetic.

However, if I assume of the half who didn’t buy the game (but had visited the buy page), two thirds of them are prepared to buy the game next time it’s 50% off, then I can add on another $9.50 a day, which is still kinda crap, but better. Further to this, there is the viral effect, where word of mouth from those buyers might lead to additional sales. This involves even more guesswork….and there is more stuff I don’t know…

So the key variables I need to juggle here are:

  1. Percentage of people who bought the game directly attributable to this spending (some of this is known, but with considerable error margin)
  2. Percentage of people whose exposure to the game ‘stores up’ a purchase at a later date.
  3. Percentage of people whose exposure to the game ‘stores up’ a purchase at a lower price.
  4. Virality multiplier from new purchasers of the game.
  5. Potential upsell from new customers for future games.
  6. Cross-promotional effect of people visiting for Democracy 3 but buying GSB./Redshirt/GTB etc…
  7. Sales income through all channels from people who saw the ad, and had the brand re-in-forced, but did not click, or whose clicks were not tracked due to privacy settings/javascript disabled.

The trouble is there are just too many variables here, and this is where it becomes alchemy. My gut feeling is that I am underspending on promotion. Possibly massively so.

P.S.If you are an indie dev and read all this, and you are new to the industry, I wonder if you noticed the big amazing factoid buried in all that, that defies general assumptions by almost everyone in the industry? Let me type it again: Direct traffic at positech.co.uk over this period is 54,000 visits compared to 71,000 visits to steam. Yup, this is doable. it takes a lot of time and effort and patience and risk.

 

 


11 thoughts on Game sales & marketing analysis over 14 days

  1. Yeah though the Steam traffic is “residual traffic” and not launch/exposure traffic. Otherwise would be more like 710,000 visit on Steam :D
    But I don’t doubt that the game converts better to your site – there aren’t other 3219837129 games in the same website.
    That’s why I think people buying ads to redirect people to Steam are insane :)

  2. Congrats on earning $60k in two weeks – it must be great to see the hard work pay off! You say you’re tracking confirmed hits on your buy pages, but have to estimate how many of them convert into sales. Can’t you track the conversions as well?

    I guess some of the questions posted above could be answered simply by asking your customers where and how they first heard about your games and what convinced them to buy.

    Btw. I’ve started reading ‘The Advertised Mind,’ which you recommended in the monetization talk on Steam Dev Days, and wondered if you have identified or are using any rules of thumb about how much exposure is typically needed for a conversion? And are you targeting the same audiences repeatedly in order to learn from that, or trying to identify the audience that converts best on first exposure?

  3. Thats an interesting topic, it’s really hard to know the right number. over the years I’ve upped the cap on impressions under google adwords, noting that mainstream ads seem to have virtually no concept of impressions limits when it comes to ads. of course that is for ongoing products, so they can do this, but even so I think you probably need to show an ad about half a dozen times to someone before it really registers.

    1. Congrats on the sales!

      A $19 daily profit is superb for an Adwords account that hasn’t been optimized yet. But I would be concerned about measuring properly if you haven’t spent some time setting up your goals and tracking in Analytics.

      My hunch is that guessing a 50% conversion from a hit on a buy page is wildly optimistic.

      My suggestion is to take the time to create special landing pages for your campaigns. Your product page for Democracy 3 is better than a lot of landing pages by way larger companies already, though, so that’s probably not as high priority as getting your tracking together. Looking at your ads and the landing page they do tend to match up well as it is.

      It’s going to be tough to figure out multi-channel attribution to the degree of accuracy that you’re looking for. Cracking this problem is something that agencies spend gazillions of dollars on.

      I’m curious to hear how reddit ads are going to work for you. Where I’ve seen it work well, the landing page is entirely custom to reddit and the copy is suffused with reddit-ese that recognizes where the user just came from.

      “The trouble is there are just too many variables here, and this is where it becomes alchemy. My gut feeling is that I am underspending on promotion. Possibly massively so.”

      Your clicks are cheap compared to the product categories that I’m accustomed to working in. You’re also not necessarily under-spending on promotion, especially if you don’t have tracking set up yet. The #1 mistake that advertisers usually make is overspending on the ads and under-investing in what people see after they click.

      Yes, you are ‘underspending’ right now, but it’s about correct before you get a structure together that lets you do more split testing so you can limit your potential losses while you figure everything out.

      The general rule is to take 10-12% of your projected annual sales and then to multiply it by your gross margin to get what your ad budget should be. Because it’s a new product, it’s going to be hard to make an accurate projection. You can cut it back to expected sales for the next month and then try to make a projection for a few months out and figure a budget from that.

      If you’re looking for a good SEO checklist that’s not as nebulous as ‘do moar SEO,’ I suggest just going through this: http://moz.com/blog/the-beginners-checklist-for-small-business-seo

      Off the top of my head, I notice that your Democracy 3 landing page doesn’t have a meta description, which makes it so that the text under the search result gets cut off with an ellipses. That’s a quick 30 second fix that you can make.

      Hope this was helpful. I enjoyed watching your talk from Steam Dev Days.

      1. Thanks for the comment, I just added a meta description :D. I have a lot of analytics in place, and I do track like mad, but the problem is the tracking is not infinite-timed and is also inherently leaky. The gape between seeing an ad and purchasing can be so long (3-6 months or even more) that it becomes very approximate.

        When i think about a 50% conversion rate, I’m talking very long term there. That person isn’t 50% likely to buy NOW, but maybe they will when reminded about the game in a month or a years time. I’m trying to estimate the value in today’s money of all future income for a potential buyer, so I’m taking lifetime customer value into account with these calculations.

  4. Have you figured out your cost of acquiring a sale? Like if you spend $5 on ads how many sales would you expect to get? Does this number seem to remain constant? or does it change if you throw a few thousand extra into it?

  5. Hi Cliffski,

    Interesting stats. I come to your page to view your blog and I have bought a couple of games (Starship Tycoon a long time ago) and I think I tried GSB.

    I am using Steam as a sort of online purchasing portal / window shopping as I still play on PC but don’t play MMORPGs anymore – I might chuck £0.69 at iTunes for the latest version of a game on my iPhone but Steam seems to be, from my perspective, where to buy PC games that have a bit of intelligence in them rather than consoles which seem to be all 1st person shooters….

    (I still think consoles are for low brow apes / girls – no offence to girls meant)

    I surf through Steam and look at their offers / sales – You don’t seem to pop up that often though…

    Perhaps you have a hard core of gamers that keep buying your games ?

    Would be interesting to see your stats on Kudos (once upon a time Yahoo’s top rated game…) and the Rock band version ?

    Still looking….

    Cheers

    Breezey

  6. hi. just a short comment about ads.

    it might be somewhat difficult to do that for games, but i bet theres a way.

    i know a person whos doing some training about the bussines, mostly in regards to ebooks and video training sales, but neverthelees some applies here as well. in order to get better results from ads(and thus allowing to spend more) is to increase avg revenue per each click. to do that we cant sell just 1 thning and hope for the best. i think translation for that would be chain sale.
    eg. a bundle of all ur games, on a 1 time only promotion to the ppl buying ur game, or email once in a while (not to often) with such offer, valid for short period of time. even if only small % would do this, that will increase avg income per click, and some games might get attention that way.

    he is doing that by selling exclusive training for like 10-20 ppl, or by offering special video for about 500f (normally 1k f). its a diffrent market but his data shows that from almost no profit (or a loss) he went up significantly up on ads, so if each click cost him lets say 10p he made 1.5-2f profit on that. im sure there are some ways to achiev that here :)

  7. 50% conversion on a buy page is a huge assumption, and a monster conversion rate at that. I’d guess it’s closer to 1-5%, depending on what your ad looks like.

    Any reason you can’t measure what the true conversion rate is?

  8. The direct instantaneous conversion is likely quite low, but the long term (over a year) conversion including sales through other channels, other games, and virality is likely way higher.
    There is no way to measure someone seeing an ad, checking the buy page, telling a friend, whose work buddy’s brother buys it on steam 6 months later,

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