Retargeting is Good Business

Gone are the days of frenzied growth by disruptive startups flush with VC dollars. With inflation, gas prices and interest rates rising, money is getting more expensive.?

The result? Tech companies no longer have the luxury to focus solely on growth anymore.?

For apps, this means taking a more intentional approach to marketing: rather than acquiring any user — acquiring only the users that show the highest purchasing potential and shifting more investment to consistently retargeting the ones that do from the moment you acquire them.

While some might take a negative stance on these trends, I find them refreshing. Why? Because it means the app economy — and the global economy in general — is moving back to a realistic approach to business. In other words, we’re shifting to a time when good business matters again. Going forward, the apps that make their advertising dollars work harder in the name of good business will thrive.

Gaming is recession-proof

One sector of the global economy that has weathered market fluctuations since its inception is gaming. Regardless of market, device, format, and economic trend … gaming stays constant. Just look at the steady growth of the gaming market in the face of the pandemic.?

Source: Newzoo

This year, the gaming market is projected to reach $203.1 billion in consumer spending. This represents a 5.4% increase in growth year over year. Global player growth also continues to grow. By the end of 2022, the number of people playing games will surpass the 3 billion mark.?

Even in the face of inflation — which has affected spending across industries — gaming continues to drive purchases in the U.S. market. Overall, the U.S. remains the top driver of gaming revenue, and is projected to reach $50.5 billion this year.

To succeed in gaming, invest in mobile

When it comes to gaming, it’s never been more sustainable to invest in the mobile sector. Why? Because this year, mobile gaming will drive $103.5 billion in global revenue, up to 60% market share of total global gaming revenue. This represents more than 3x the size of what has historically been the primary driver of consumer spend in gaming: home consoles.

Source: data.ai

{Note: data.ai’s projection of 2022 mobile gaming revenue is slightly higher than Newzoo’s. According to Newzoo, mobile gaming is set to generate $103.5 billion by the end of year. This would represent 51% of the total gaming market.}

Additionally, mobile has the potential to continue expanding the gaming market, by making gaming available to people all over the world. When it comes to audience demographics, there truly is no more diverse a category than gaming. Historically typecast as a sector dominated by young male players — in fact, the top mobile games in the world are skewing more and more to female audiences. Among the top 1000 games in the U.S. last year, 47% of them were most likely to be played by — and see purchases from — female players.

As mobile games continue to extend their reach across demographics, the share of the pie gets bigger. In the last couple years, it’s become clear that mobile games are not just attracting mobile-savvy Gen Z anymore. In fact, games that skew towards the Gen X/Baby Boomer demographic (aged 45+) have represented 25% of the top grossing and growing games since 2019. Moreover, since 2019, games skewing to ages 45+ have grown more than 30% — making Gen X/Baby Boomers the fastest growing cohort in the U.S.

It’s clear mobile has allowed gaming to go mainstream, expanding into every demographic, including older ones that often have the highest amounts of disposable income and time to play, as they head into retirement. As put succinctly in data.ai’s 2022 Gaming Spotlight Report from which I sourced much of the previous data: “on mobile, gaming is truly for everyone.”?

The steady growth of mobile gaming

Downloads of mobile games are one of the steadiest trends in the app economy and in the pandemic they’ve seen remarkable growth. Between Q3 2019 and Q4 2020, global downloads of mobile games hit double-digits. Even now, as the economy dips, mobile gaming downloads sit well above pre-pandemic levels at the 14 billion mark.?

This is a testament to the joy mobile games bring to people’s lives, and the fact they will remain a source of happiness for people whether the economy is on an upswing or a downswing.

Source: Sensor Tower

The rise of new mobile game markets

Another reason to be confident in mobile gaming??

Even when mobile gaming growth or revenue dips in top markets, new markets make up for it. Take the steady growth of games in APAC — while other markets flatlined in growth at the end of 2021, emerging markets in APAC grew.?

Source: Sensor Tower

Vietnam took the lead of this growth in Q1 2022, with the country driving 80 million mobile game downloads, a 21% increase year-over-year. Thailand drove fewer overall downloads but grew at an even faster clip, with 60 million downloads representing a 24% increase year-over-year.

Outside of APAC, other emerging markets are also seeing notable growth. This includes Argentina, which saw the highest growth in mobile game downloads in Q1 2022 outside of Southeast Asia.

Also, Turkey, which is the fastest growing mobile game market in Europe by downloads as well as revenue. In Q1 2022, with mobile game downloads growing year-over-year by 6% and revenue by 37% to a total of $40 million, it’s no wonder Turkey has been crowned the “Silicon Valley of Europe”. In fact, as an indicator of investment to come — in 2020, Peak Games, a Turkish gaming company based in Istanbul was acquired by Zynga to the tune of $1.8 billion.

Source: Sensor Tower

The importance of good business

There’s much to look forward to as the global economy enters a new cycle and one of them is the continued innovation of mobile gaming. Also, the enhanced focus on good business practices that value your best customers. That’s where smart advertising strategies like retargeting come in. There’s no question ad budgets are tightening and that spend needs to be refocused on the channels and strategies that drive revenue. With that said, after the boom in mobile usership during the pandemic, it’s now time to retarget the users your app acquired – not just in the name of good budgeting but good business.