The Trouble With Advertising

The name Learning Yard isn’t just indicative of the kinds of games we make – it’s also indicative of how we think.  We are always learning, and one of the main methods we use to learn more about game development and our target market is testing.  Recently, we wanted to test out how effective it would be to advertise our games online directly to users, so we used some free AdWords credit (thanks, Google!) to setup a simple test campaign and see just how much it would cost to get people onto the Learning Yard site.

After some keyword filtering to narrow down our target keywords, we settled on 5 test keywords and two test ads.  We ran these for a day, paused the campaign, optimized based on the results, and then ran it for another day.  At the end of day 2, we had a 0.21% click-through rate at an average cost per click of $0.42.  If you’re not familiar with online advertising terms, these number basically mean that about one in 500 people who saw our ads clicked on them, and the amount we had to pay each time they clicked was 42 cents.  That’s not terrible, but it’s not great either.  We could probably do better with more optimization, but we have enough data from this test to draw some conclusions.

The trouble is, most of the people landing on your site after clicking an ad won’t buy your product, so the money you spend each time they click is wasted.  We would be very lucky if 25% of the people who landed on our site ended up buying our game.  What this means is that to get one person to buy our game, we would have to spend at least $1.68 on ads.  That’s a big problem when most games in the iPad App Store sell for $1.99 and Apple takes a third of profits.

We haven’t tried facebook ads yet (which are usually cheaper), but the result of this test was quite enlightening – don’t rely on advertising if you plan to make money on your apps and games!  If you’re interested in alternative marketing techniques, tap tap tap made a great post on some of the techniques they used to get massive downloads for their latest game.

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