Long story short, Pixel Federation—a Slovak games development studio best known for developing many of the games on Facebook, such as Train Station and Diggy’s Adventure—came up with a winning formula to triple daily active users and monthly revenues. The lesson: Your game doesn’t have to be a major hit to be massively profitable. Our host Peggy Anne Salz catches up with Matej Lancaric, Head of Mobile Marketing at Pixel Federation, to get the inside track on the strategies, tactics and—above all—analytics the company used to scale so far so fast. Matej shares tips and tricks to help you model and predict LTV—and shares his plans for TV advertising to dial up growth.

Peggy: Hey, and welcome to Mobile Growth, the podcast series where frontline growth marketing experts share their insights, experiences, expertise, everything they know, so, that you can know it and become a better mobile marketer as a result. And I'm your host Peggy Anne Salz from MobileGroove where I help my clients grow their revenues and audience through content marketing.

And on my watch, as host of this series, I will be introducing you to the people who know how to drive growth. And we have a roster of incredible and accomplished UA ninjas, people at companies who understand how to get results with tools, techniques, or tips that you're going to want to stay here to hear and listen to. And so don't go away. And right now, my guest is Matej Lancaric is head of marketing at Pixel Federation. Matej, great to have you. Thank you for joining me.

Matej: Thank you for having me.

Peggy: So, I'm looking at your company, and, okay, you know, games companies they're out there. They're everywhere, tons of them, but not many of them can triple their revenues since launching. You launched on mobile October 2016 tripling revenues, that's an amazing growth story in itself. Why don't you tell me a little bit about that?

Matej: Yeah, that's correct. I mean we have our old games originally based on Facebook canvas, and then we went to mobile with all of them. And we tripled the revenues like we were able to achieve that just supporting our games to mobile and that's fantastic.

Peggy: So, is it everywhere? Give me a little bit of background about the app, and I think about the game. So, is it iOS, Android, global launch? What's going on there?

Matej: Well, we global launched on iOS and Android as well. And, well, the strategy was like we will...we would like to spend $200,000 for a month. And then, we got the great results. So, we ended up spending one million a month, and that's why we got like a lot of users. And then, we took the revenues.

Peggy: Of course, it's not just spending that amount, it's understanding like when to dial-up, when to dial down. And, of course, I guess the foundation of all this is understanding your LTV because if you do everything right and keep that formula going, you can dial up and, you know, and just get more. Because your LTV is... that cycle is just going to be self-fulfilling is that what happened? Is this all the data science thing background?

Matej: Yeah, yeah, we have our own BA system and our own BA team as well. All games have a dedicated BA guy. And we on the marketing team we have two BIA guys working on data analytics on a daily basis. And we work towards predicted LTV on a one-year basis. So, that's why we we were able to scale so much and so faster.

Peggy: So how did you finance the growth? I mean one million a month, that doesn't come off the trees.

Matej: I know, you know, we were found 10 years ago, and we have four live games.

Peggy: Okay, so you could pull from that. Or was there some sort of creative...? Because there are so many interesting models out there to finance growth. You know, you can dig into your earned revenues with some models. I mean there are different ways to do it so that what you're doing is making certain that, you know, when you're on that curve you can just keep on spending and building. Is there anything there or was it just because, you know, you have a stable company and you just said, "Hey, let's finance it." Or was there any imagination there? I'm just curious.

Matej: Yeah, we have a stable company. It was kind of funny because our CEO had to go to the bank to transfer funds from another account because we didn't have enough funds on our advertising account. So there you go.

Peggy: There we go. Yeah, I've heard of companies like that having to even, you know, just because they were small, it's like Facebook won't give them an account. So, it's basically just drain the credit cards.

Matej: Yeah, we weren't expecting that. It was a real surprise but in a positive way.

Peggy: Well, definitely you know it worked out. You did triple your revenues. Can you give me some numbers about, you know, the... I don't know if you were focusing so much on retention because you do have your predicted LTV but some numbers about the users, maybe sessions or engagement, something that tells me what you're monetizing.

Matej: Actually, our day one, and day 7 retention is really low, but in the end, we can monetize the users real low. So, the long-term retention is like, I know, the benchmark the industry. And then we are monetizing based on events and stuff like that.

Peggy: Okay, and how... what is the model? Is it premium? Is it ad?

Matej: It's in-app purchases only. We don't have ads at all in our game.

Peggy: Whoa.

Matej: Yeah, I know, I know. We are late to the party, you know, that's because we have all the game based... we have all the games on canvas, and we can't really find proper placement for ad monetization. But we're working on that because it's kind of hard to put ad monetization into all the game, right?

Peggy: So, what's working for you? You said you have other games. So, I could imagine some cross promotion is also working for you, or how are you getting the numbers?

Matej: Yeah, well, we have Transition which is our like biggest and greatest game. But it's a totally different target audience. So we can't really cross promote the users from Transition to Diggy's Adventure which is like a story-driven puzzle adventure and the target audience is not very much the same. So, we're not cross promoting any of our users.

Peggy: So, they're on the journey, and I guess they're buying a... sorry, I don't know the app I can't help that.

Matej: That's right.

Peggy: Now, but, I mean, I can imagine you're buying to complete the journey, complete some sort of quest, do something, and you're buying capabilities to do that, right?

Matej: Yeah. Yeah, we're like our best creatives on Facebook are like you know we have some puzzle game, you can solve that puzzle, and it's there's the message for the users.

Peggy: So, since you monetize with in-app purchases it's all about, you know, fighting the whales, avoiding the minnows. I've heard that some of them...we've got new classifications some of them like dolphins, so we can deal with it. We'll acquire them. It's not such a bad thing, whales are always the best of course. Tell me about your user demographics, I mean, how do you...what kind of audience do you have and how do you identify the valuable user?

Matej: Actually, for Diggy's Adventure, it's 50/50, like 50% of female, and 50% of male each, but like most valuable users are female 40-plus in the U.S.

Peggy: Really?

Matej: Yeah, that's right.

Peggy: Okay.

Matej: Well, this is a surprise but it's true.

Peggy: That is a surprise. So, what does that do to your creatives when you're trying to acquire them? I guess it's very interesting AB testing indeed.

Matej: Oh, yeah, it is. But still like I said, we use the questions and puzzles, and everything, and it's like most appealing for the target audience.

Peggy: Well speaking of audience, our audience has to stay put because we have to go to break but don’t go away because we’ll be back after the break.  We’ll be talking about how you managed to rocket your revenues but also maybe some tips and tricks about how you listeners can do the same, so don’t go away we’ll be right back.

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Peggy: And we are back. Welcome back. Matej Lancaric head of marketing at Pixel Federation. Matej, before the break we were talking about, you know, your journey, how you tripled revenues which is amazing. And looking at your audience, how you identify them. But let's talk about some of the challenges, that doesn't come overnight. So, there's got to be some learning. Some fail fast, move on, what could you share as some of the key learnings on this journey?

Matej: Actually during the soft launch of Diggy's Adventure, we didn't really pay attention to ASO and that was some kind of a huge mistake. Because we ended up like above-average with the conversion rate of a benchmark for the category. But now, we started doing... so completely different. And we're paying attention to that. We are trying to experiment more and more. And we were able to increase the conversion rate for U.S. until like up, until the 40% which is great.

Peggy: Yes. So, what did you focus on? I mean, it's broad. I've written a lot about it, you know, it starts with the with the icons, the keywords, what did you focus on?

Matej: Yeah, the icon was the main thing, and then the screenshot and that's...we tested a lot of icons, I mean, like 40 icons until we ended up with the current one. But the main thing was probably testing screenshots. Sure, there you go, like as huge uplift for our conversion rate.

Peggy: I mean it's a huge uplift, but it's also a bit of a never-ending thing.

Matej: I know it is.

Peggy: So, how often do you go back and say I really did love that creative, that screenshot rocks but now it's time to freshen it up, you know, and all the other stuff, the seasonality, the whatever. So, how often you have to go back and do that?

Matej: Actually, the seasonality icons and screenshots that never works for us like, yeah, the holiday screenshots.

Peggy: Yeah, we hear at all the conference's you're supposed to do seasonality, remember?

Matej: Yeah, but...

Peggy: Yeah

Matej: ...never works for us really, like a holiday, Christmas, Easter whatever, the decrease of the conversion rate every time. So, okay, we stop doing that. But we are constantly testing something like feature image, screenshots, icons, constantly testing. And then once a month we do a complete change of design of screenshots and the whole store page. Just to test and to see if that's working on or not.

Peggy: And you're testing it in what way? You're just like changing it. You're seeing, you know, what are the inbound, what's the interest? How many people are going to the landing page? How many people are downloading the app? Or is there...because you're such a smart company, such a data-driven company with all your BI staff and capabilities, is there a different approach to AB testing here that you're using?

Matej: Well, you know we're using AB testing the Google experiments, which is not the proper AB test. But now, we are starting to do AAB test just to be sure we have some kind of control group. And then, the results will be better because our BI team wasn't comfortable with the Google experiments and the whole AB testing in Google Playstore. So, they...we come up with AAB testing.

Peggy: Okay, we talk about creatives, I mean, keywords didn't play into this or secondary?

Matej: Oh, yeah.

Peggy: Or you're just too crowded and too expensive and too much of a pain.

Matej: Yeah, too much of a pain, of course, and then we have one month, maybe two months cycle for updates. So, we are trying to change the keywords as well. But not as much as trying to experiment on screenshots and improving the conversion rate.

Peggy: So, if you could tell someone, you know, the thing you need to focus on or give me a couple of growth hacking tips, I mean, you already have to be fair. You've been very open about, you know, look at the creatives and you know consider the audience, and think about the demographics and the matches. So, we do have some ideas, but could you offer like maybe say your top two picks?

Matej: Okay, well, it's easy. I change the order of screenshots. It completely changed the outcome of the experiment, easy, easy like, really.

Peggy: From what order, from what to what?

Matej: Like I changed the first two screenshots, and then I saw the completely different results, and then we saw an increase of the conversion rate. Easy fix.

Peggy: That's a good one. I never thought that because you say, okay, look at the screenshot, but then it's the order of the screenshot as well. Yeah, okay. That's a good one. I'll give you that. That's an easy one but probably... so could you tell me what difference it made?

Matej: Oh yeah, I think like 10% increase of conversion rate. There we go.

Peggy: There we go, 10% for fixing it. Okay, give me another one.

Matej: Well, probably the most appealing icon for a target audience which is not like... don't have everything in the icon just one thing which is easy and readable. There you go.

Peggy: What about where you see your growth opportunities next? I mean some people are telling me, you know, check out the alternative app stores, or growth opportunities in just, you know, localization, cultural nuances, I mean, where do you see what you're going to do next to dial up that growth and to keep that going?

Matej: Actually, we started doing TV spots in the UK and moving to Germany as well, and I think, in Q2 we will be moving to the U.S. as well. So probably this is something we are trying to do.

Peggy: So, what are you going to do differently to crack those markets, or is it just really a cookie-cutter thing, it worked here, it's going to work there, or you have to modify that?

Matej: Well, we need a larger budget for that for sure. That's something we need to work on, but we'll use the same creatives probably. Switch voice overs because we have a UK one.

Peggy: That's not going to work in the U.S.

Matej: I know, so, we need to change that, but except that, I think it's going to be the same thing.

Peggy: So, in the meantime, and before that launch, I mean you got some great coverage on Pocket Gamer. So our listeners can obviously go there and read a little bit more about how you managed to do what you did. But is any other place where they can keep in touch, maybe you blog out there, maybe you share some of your tips and tricks?

Matej: Yeah, probably they can follow me on LinkedIn. I share a lot of posts there. So...

Peggy: Okay, of course, we'll have that in the show notes. So, people can catch up with you. We have the whole transcript for that matter. So, people can write down the growth hacks and test them and get back to you. Tell them what kind of uplift they have. So, listeners, thanks for listening in and until next time, of course, you can check out our earlier episodes, find out how to move the needle on your growth in your mobile game, or whatever other types of app you have, I mean this is the place to be. And Matej, thanks so much for joining me.

Matej: Thank you very much for having me.

Peggy: And that’s a wrap of today’s show, thanks for listening to this episode of Mobile Growth and a quick reminder to visit for a complete listing of our upcoming events. And don't forget to use the very special promo code MGSPODCAST30 for 30% off of your next order.  And remember no matter what kind of app or business you have this is the destination for everything you need to move the needle on growth. So, until next time, make it real, make it matter, and we'll talk to you again soon.