THE MGI FLYWHEEL

The MGI Flywheel

The MGI business model is based on a flywheel that is driven by the software platform synergies between its Ad Software Platform and its games, differentiated through a transparent and open source approach versus other participants in the open internet, and which is further accelerated through M&A and innovation. In summary, a stronger proprietary games portfolio (meaning a larger audience and more first party data) will lead to more advertisers using MGI for user acquisition as they can reach a broader audience in a more targeted way (thus increasing the ROI of their user acquisition campaigns). This in turn attracts more publishers who also want to monetize their ad inventory via MGI’s Ad Software Platform, as there is higher demand and as they therefore can sell their ad inventory at a higher price (thus increasing their CPMs). The resulting strengths of MGI’s Ad Software Platform leads to better monetization of MGI’s game ads, as well as better user acquisition for MGI’s own games, increasing MGI’s owned audience and access to first-party data. M&A and innovation can additionally accelerate the flywheel. For example, in case of buying a mobile games company, MGI’s audience and access to first-party data would increase significantly. Also by developing new innovative products like eg. ATOM, MGI has the chance to gain additional advertisers and publishers. In the following, we will go into more detail about the individual parts of the flywheel.

  1. FIRST PARTY CONTENT ACCESS

MGI has more than 5,000 casual and mobile games and 5 premium games with a total of more than 1bn registered players. In addition, MGI’s SDKs (‘Software Development Kit) are integrated into the apps of more than 5,000 publishers, reaching up to 2bn users. Together, this gives MGI one of the largest proprietary first party data platforms in the ad market. First party data enables, amongst others, better targeting and greater transparency in reporting and monitoring of advertising campaigns and reduces vulnerability to fraud. In addition, it makes less dependent on third-party data, which is becoming increasingly regulated and scarce. Overall, first-party data creates a strong competitive advantage. MGI continuously broadens its games portfolio and its launch pipeline at very reasonable investment volumes. As recently announced, MGI has established a new launch department to further increase the number of game launches. Launching games is risky as there are well over 2,000 game launches per month, all fighting for new players. Overall, a portfolio approach also makes MGI less dependent on the success of individual own or third-party IPs. Further games are added via acquisitions.

  1. DATA ENRICHMENT ENGINE

The Data Enrichement Engine is the data part of the platform that enables advertisers to target better and upgrades publishers ad-spaces.

Without the seamless (and fast) collection, integration, management and activation of this data, its value cannot be fully realized. Accordingly, a technology-enabled solution – a central hub – is needed to take on this task. In the ad-tech sector, so-called data management platforms (“DMPs”) have developed for this purpose. They collect and process data not only from publishers, but also from advertisers and their advertising campaigns, which span various formats and channels.

The resulting data volumes are huge. Accordingly, the IAB. defines a DMP as a “big data solution for multi-channel advertising, marketing, media and audience activation”. A DMP, therefore, is a technology-centric solution for aggregating, integrating, managing, and deploying disparate information sources to create new, usable customer insights that can be leveraged to improve performance across the enterprise. As such, the DMP is a hub for maximizing the value of key customer data assets – both proprietary and third-party – that would otherwise go unused.

MGI has started to buy and develop its own data management platforms as part of its full stack approach, such as the contextual data specialist Beemray, which has been further developed in recent months. The advantage of having your own DMP is that no information is shared outside of the ecosystem when transferring data between advertisers, DSPs, DMPs, SSPs and publishers.

  1. SCALED DISTRIBUTION AND MONETIZATION

In the past years MGI has built a full stack platform under its Verve Group, that serves both advertisers – by helping them to efficiently acquire users – and publishers – by helping them to efficiently monetize advertising inventory and that is multi channel, serving In-App, Mobile Web, Web, Connected TV and Digital Out of Home as well as multi-format, including eg.  banners, interstitials and video ads.