Guest comment: Social gaming: a revolution in online advertising?

How can advertisers best capitalise on web users’ growing use of social games? Gilles Storme, Head of Sales EMEA, RockYou, looks at the rise of engagement advertising…


Forget about mobile; this is the year of social gaming. Already demonstrating remarkable growth in 2009, the rapidly developing trend is this year enticing the big names to make their move. With EA Games snapping up London-based Playfish, and Google’s rumored $150m investment in Zynga and recent purchase of Slide, brands are testifying the importance of this evolving segment of the gaming industry. Other high-profile deals have seen Disney acquire Playdom for over $500m, and Facebook inking a number of strategic arrangements with Zynga, RockYou and Crowdstar. Companies are jumping to secure a share in the lucrative market now estimated at $1billion in the US alone. But these global companies are also looking to acquire the capabilities and competences to launch their own branded games.
An opportunity for advertisers
Social games are browser-based and combine the simplicity of casual games with the community-based attributes of social networks. They 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. Or perhaps you’re already playing them along with over 200 other gamers on the planet. This huge figure, with RockYou’s media network alone reaching 280 million monthly users, illustrates the largely untapped potential for leveraging a huge user-base.
Inside Network’s Inside Facebook Gold, June 2010 Report, shows that in the UK, Facebook App users are mostly women (57.9%). With many of these 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. Furthermore, 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.
The birth of engagement advertising?
But there is much more to come. Advertisers are only just starting to explore ways to take advantage of the high-level engagement users have within social games. This stickiness is built by successful developers through establishing a dialogue with their players through regular updates and using 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.

By Gilles Storme
Head of Sales EMEA
RockYou
www.rockyou.com
********************************
Get Netimperative updates on Twitter