Game on! A transformation in online advertising
Gilles Storme, head of sales EMEA at RockYou, explains why social gaming offers huge potential for advertisers: “Targeting capabilities are better than in traditional forms of online advertising as they are based on real, declared data rather than on samples and panels…What this means is measurable and more precise ROI, and a highly compelling solution for advertisers.”
This year has truly testified the importance of social gaming. Already demonstrating remarkable growth in 2009, the rapidly evolving industry is this year enticing the big names to make their move. With EA Games snapping up London-based Playfish, and Google’s rumored $150 million investment in Zynga and recent purchase of Slide, brands are reinforcing the relevance of this developing segment of the gaming industry for engaging consumers.
Further high-profile deals include Disney’s $500 million-plus acquisition of Playdom, and Facebook signing a number of strategic deals with Zynga, RockYou and Crowdstar. Companies are jumping to secure a share in the lucrative market now estimated at $1billion in the US alone, and the new opportunities it spells for advertising. But these global companies are also looking to acquire the capabilities and competences to launch their own branded games.
Social gaming is huge. Over 200 million people play social games each month and, thanks to rise of social network giants like Facebook, this kind of play has breathed new life into the concept of ‘casual’ gaming. The games are driven by social interaction rather than complex strategy or skill levels. Quite likely, you’ve already heard of some of the most popular titles: Farmville, Mafiawars and Frontierville from Zynga, Zooworld from RockYou, or EA’s Pet Society. RockYou’s media network alone gets more than 280 million unique visits, and these statistics illustrate the largely untapped potential for leveraging this extensive user-base.
With billions logging onto social networks, this kind of gaming has attracted ‘non-gamers’ and therefore reaches a much broader demographic of consumers. Inside Network’s ‘Inside Facebook Gold, June 2010’ report, shows that in the UK, Facebook App users are mostly women (57.9%). With many users being 30-50 year-old mums, women are largely the driving force behind the popularity of social games. Facebook accounts for over 6% in share of online visits in the UK and features such as the accessibility, simplicity, and viral nature of social gaming have accumulated a population that advertisers should not ignore.
The main source of revenue for social game developers comes from micro transactions. Games are effectively operated on a freemium model which allows a larger number of users to trial the games for free, and then buy digital currency to enhance or accelerate their gaming experience with up to 5% of users purchasing digital credits. For advertisers wary of the unpredictability of social media, social gaming is an ideal opportunity to reach users in a secure and controlled environment; ads cannot appear next to potentially damaging, user-generated content.
The games also provide an easier means of putting the right content in front of the right people, critical for effective advertising. This can be done, for example, through addressing the nature of the game, such as placing casino advertising in a poker game. But social gaming also sees users frequently opting to share their demographic information in order to allow for a more tailored and compelling game.
On top of these advantages, targeting capabilities are better than in traditional forms of online advertising as they are based on real, declared data rather than on samples and panels. What this means is measurable and more precise ROI, a highly compelling solution for advertisers using the traditional metrics of impressions and clicks and CPM, CPC, CPA and CPL.
Advertisers are only just beginning to explore ways to take advantage of the high-level engagement users have within social games, but there is undoubtedly much more to come. Successful developers have established a dialogue with their players by using regular updates and through taking advantage of the social network mechanics. Zooworld players, for example, earn digital currency by coming back to their Zoo every day of the week.
The engagement and communication channels already in place present a great opportunity for advertisers to interact with players. RockYou has responded by developing a Deal of The Day advertising solution to allow brands to interact with users in exchange for digital currency or goods. These interactions can take the form of watching a video in its entirety, answering a poll or a quiz, or using a mini branded application, and are charged on CPE – cost per engagement – basis. Recently, as part of a wider campaign, Coca Cola offered Zoo World users branded vending machines to add to their Zoo.
Innovative as they are, these offers are probably only the start of a wave of even more creative solutions. Advertisers and agencies will push social game developers to fuel their expertise into developing increasingly advanced forms of engagement ad solutions. Perhaps these more effective approaches to advertising may even render the traditional impression and click-based online models obsolete.