Real-world challenges
Given the enormous new supply and the slow-down in user population and user spending growth, competition are becoming fierce. Gaming sector in past years was highly lucrative, yet newcomers are actively entering as they see the business as profitable. The past blue sea market is transforming into a red sea market, requiring gaming companies to adopt different online marketing strategy.
Real Environment Landscape
In 2022, the gaming market has shown the following characteristics:
- Existing market with limited user growth, due to the decline in user time and budget
- Fierce competition in gaming products across game genres, topics etc.
- Traffic competition arises across different verticals, such as financial, education, local life, e-commerce. Different products are competing over the same group of traffic, and also developing their user segmentation and product differentiation strategy
- More alternative products for users' spiritual needs, such as short videos. Users are increasingly picky about the game contents, and the life cycle of "freshness" is getting shorter.
- Awareness of privacy and security has been increasing, making targeted user acquisition more difficult.
Therefore, the priority of advertising technology has shifted from user acquisition ability to user management ability. In a market with limited user growth, retaining the existing user has been more important than before. The key differentiation factor is to truly know the user and understand the real spiritual needs: why is gaming different from the short video, how to increase its interactive level and quality, how to increase user’s willingness to pay.. In each user’s life cycle, advertising technology need to monitor the retention rate and understand how to keep the user active and satisfied.
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