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In-app advertising model benefits CooTek’s mobile games to grow exponentially

SHANGHAI, November 9, 2021 / PRNewswire / – As Chinese game developers rush to compete overseas, CooTek (Cayman) Inc. (NYSE: CTK) (“CooTek” or the “Company”) has chosen to focus on games quick and easy casuals, thus avoiding direct competition with established companies.

Investing in mobile games is an important attempt by CooTek while pursuing its entertainment content strategy. After its NYSE IPO in 2018, CooTek focused on creating a content ecology based on mobile games, online literature, and multi-story content after its NYSE IPO in 2018. Nowadays, content-based products have become the main products of CooTek. source of income.

The company’s financial data has shown that its mobile advertising revenue comes mainly from mobile games and online literature. In the second quarter of 2021, 37% of revenue came from online literature, while the mobile gaming business contributed 55%. According to Mr. Lu, head of CooTek’s overseas gaming operations, the company has started exploring the overseas gaming industry since the second half of 2019. The casual gaming industry has a high return on investment. in the short term, which can greatly improve cash flow. business flow.

In Q2 2021, CooTek launched the hyper-casual game, Catwalk Beauty, which subsequently topped the App Store and Google Play game rankings in 58 countries and regions, including the United States. In the first 3 months, the game ran almost $ 3 million gross margin, generating an overall return on investment of over 200%. The hit game Catwalk Beauty developed by Smillage has topped the GP rankings in 26 countries since its launch, creating substantial revenue for CooTek this year. And in the third quarter of this year, Truth Runner, another parkour game following the lead of Catwalk Beauty. A week after its debut, Truth Runner topped the charts for IOS games in the United States.

CooTek’s mobile gaming business revenue increased 25% in QoQ in the second quarter of 2021. Such improvement in profitability can be attributed to the Optimized Integrated Advertising (IAA) model.

The IAA model is a profit model mainly adopted by hyper-casual games. Compared to the Integrated Purchasing Model (IAP), IAA is a simple, fast, but short-lived mechanism that relies on advertising profits. The profitability of the IAA model is highly dependent on user acquisition, whether from internal sources or from other platforms.

“The threshold for producing hyper-casual games is not high. Among mass production, only when the conversion rate reaches a certain level and the cost per install (CPI) is low enough, for example, $ 0.2-0.3 per installation, that we can consider this to be a workable idea and implement it, ”Lu explained.

Take the example of Catwalk Beauty, during the testing period, the CooTek team turned the idea of ​​“catwalk” into a demo for testing. The results showed that the demo conversion rate was very high and stable. The team then completed development of the game within a few weeks. “There were about 20 main themes in the game, and the team was able to deliver one every day. That’s why we were able to launch it so quickly.”

Meanwhile, CooTek is designing its own ad placement system. “We have worked closely with some developers, which means that our team members are actively involved in their projects, as well as in the design of a standardized process and platform.” Lu said.

About CooTek (Cayman) Inc.

CooTek is a mobile internet company with a global vision that delivers content-rich mobile applications, focusing on three categories: online literature, scenario-based content applications and mobile games. CooTek’s mission is to enable everyone to enjoy relevant content in a transparent way. CooTek’s user-centric and data-driven approach has enabled it to launch compelling products to capture the ever-changing content needs of mobile internet users and help it quickly attract targeted users.

For more information on CooTek, please visit https://ir.cootek.com.

For investor inquiries, please contact:

CooTek (Cayman) Inc.
Sir. Robert yi cui
E-mail: [email protected]

ICA Investor Relations (Asia) Limit
Sir. Kevin Yang
Phone: + 86-21-8028-6033
E-mail: [email protected]

SOURCE CooTek (Cayman) Inc.


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