It’s August 2020. I like to believe that most of us are pretty clear on the moral imperative of safeguarding users in our digital spaces. There’s no need to further articulate why that’s the right thing to do by itself, however, online communities can only thrive through growth, so we can’t ignore the business of content moderation. It turns out that it is an investment with critical return.
In a challenging world where economic uncertainty is pervasive, it’s understandable that companies need to scrutinize every cost they will incur, and consider the return on investment.
The importance of social interactions on online platforms can’t be understated (20X in increase in lifetime value, anyone?) That’s an opportunity loss if you are not facilitating healthy human interactions in your product, but how about active revenue loss due to user churn? This topic has remained relatively unexplored, and almost every company I talk to struggles to measure and understand how many users they are losing due to disruptive behaviour in their platforms.
Just 32% of communities say they can measure value, and only about 9% overall can measure ROI, too. (Source – Community Roundtable: State of Community Management report). Typically, those measurements don’t take content moderation into account.
Let’s take a look at two publicly known stats – one from the Anti-Defamation League and one from Electronic Arts. ADL published an excellent survey last year, and one of the stats caught my attention: 19% of players (roughly 1 in 5!) quit playing certain games due to harassment.
Additionally, in this interview with Electronic Arts’ Chief Marketing Officer Chris Bruzzo, he notes:
“In a study that we did, 58% of players say they experienced some form of toxic or disruptive behaviour in the last year. And it is one of the primary reasons that they choose not to play. So we don’t really need much more evidence than that to say that toxicity is ruining play. We want everyone to play, so it’s time for us to stand up.”
One in 5 players, and then more than half of players. Those are numbers that are hard to ignore.
We decided it was time to better surface the return on investment of content moderation practices that can improve player retention and increase revenue, so after internal and external collaborations, and input from a lot of great people in the games industry, we built an ROI calculator.
Taking the 19% stat from ADL’s survey mentioned above as our churn figure, we added it to the calculator using standard baseline figures for retention metrics and Average Revenue Per Daily Active User:
The calculator looks at the mid-term retention since early churn is usually related to a player not liking the game itself:
Now let’s look at the revenue impact when comparing a game using Two Hat’s Community Sift with one that’s not leveraging its benefits:
Source Industry Benchmark Data:
Clearly, the numbers speak for themselves.
Want to learn more about how content moderation can help you increase revenue and decrease user churn? Schedule some time to chat with us and we’ll run your numbers through our ROI Calculator! Fill out the form below to get started.