Virtual Currency

Social games, virtual goods, and monetization opportunities: Part 3

Nov

This is Part 3 of a series by Uzi Arbiv, Director of Sales for the performance marketing arm of Adsmarket.

In Part One of this post I commented on the current casual gaming climate, and ended with the question, “What should developers and games creators understand to stand out in the industry?”

In Part Two, I outlined the essentials and a check list for monetizing a social game.

In Part Three, we’ll discuss user acquisition through in-house marketing campaigns, Cost Per Install, and alternative monetization platforms.

Let’s start with Facebook Ads. Running an online campaign on Facebook is not a complex task and most companies do it in-house. This way, you have full control over the cost, targeting and time frame. You can pay-per-click or impression; appear on Facebook ads/flyers or within other applications’ media spots. To learn about how to advertise on Facebook, there are so many resources it would be ridiculous to advise on the best one. Here’s what FB says.

Working via CPI (cost per install) can be a bigger challenge but with the right fine tuning you can get better results and focus your efforts on the important part of this business – up selling. You might pay a higher rate per install; however, you will be exposed to various affiliates and media channels that will be most likely to generate higher average revenue per user.

In some cases these affiliates are local providers in the region you wish to target with better understanding and connections to Facebook and better targeting capabilities. Working on a performance-based level is preferred as you only pay for results. It is worth trying and most companies are already using this method.

Virtual goods can also increase user acquisition while monetizing your traffic: simply have your game/application showings on whatever alternative payment solutions platform you use. Just like everything in our world, you simply need to know how to process this channel and more important, how to price it. Check out Adsmarket Group member Matomy, provider of alternative payment solutions.

In short, a production house needs to understand fellow gamers, marketing and online media and be able to implement all three. A solid game backed up with a strong understanding of media and monetization is the main difference between a company such as Zynga and a company that looking for Zynga to acquire it…

Author Uzi Arbiv is the Director of Sales for the performance marketing arm of Adsmarket. You can contact him at uzi.a@adsmarket.com

See Uzi’s other posts:

Virtual Currency – Media Types for Online Games Applications

Social Games, Virtual Goods, and Monetization Opportunities: a 3-part series with Uzi Arbiv

Social games, virtual goods, and monetization opportunities: Part 2

Nov

In Part One of this post I commented on the current casual gaming climate, and ended with the question, “What should developers and games creators understand to stand out in the industry?”

For games companies, subscription models and boxed set goods are still generating a great amount of revenue; however, most companies know that they must create a social version of their product otherwise it may simply vanish.

Moreover, let’s say your game is social media friendly, but you aren’t monetizing. Some would say that if you have a great product but nobody is buying it then you are missing the whole point.

How else can you explain the ongoing performance and revenue for some of the top Farm/Poker/Mafia games on Facebook? Is it coincident? Timing? Or maybe they are just lucky? Not at all. These casual gaming heavy-hitters understand fellow gamers, marketing and online media and can implement all three to form the answer: great content, combined with a sharp user flow.

The best games are built to motivate their users like a good coach, who reminds you that you are good, but not excellent! Users increase their playing prowess and their chance to lead their group by purchasing credits for 5, 10, or 15 bucks a pop, an affordable ego boost. Competitive players who enjoy facing off with their friends love this model.

The challenge is to build the game right in order to maximize your ongoing cost and user value.

So here is our check list for now:

Create a cool game in terms: animation, story line, features & sophistication.
Provide a supporting platform/ technology (unless your users will enjoy maintenance/downtime notices)
Come up with the right marketing strategy and the ability to analyze your results
Funds (don’t spend it all in one place ;-)
Acquire users via in-house marketing campaigns, Cost Per Install, and alternative monetization platforms.

Part 3 will cover user acquisition through in-house marketing campaigns, Cost Per Install, and alternative monetization platforms.

Author Uzi Arbiv is the Director of Sales for the performance marketing arm of Adsmarket. You can contact him at uzi.a@adsmarket.com

See Uzi’s other posts:

Virtual Currency – Media Types for Online Games Applications

Social Games, Virtual Goods, and Monetization Opportunities: a 3-part series with Uzi Arbiv

Social games, virtual goods, and monetization opportunities: 3-part series with Uzi Arbiv

Nov

This is a 3-part series about social games, virtual goods, and monetization opportunities.

Part 1 comments on the current casual gaming climate
Part 2 will outline the essentials and a check list for monetizing a social game
Part 3 will discuss user acquisition through in-house marketing campaigns, Cost Per Install, and alternative monetization platforms.

Part One:

So, how many applications do you already have on your Facebook profile?

Here is the average check list:
One farm, a dance club, gun collection, possibly a restaurant, a football team, an empire and the list just goes on and on.

According to AppData.com, if you add up the amount of monthly active users of the top 10 Facebook developers’ apps you will hit a staggering 533,736,605 users.
This number is even more significant when you consider the potential of additional studios and game developers that grow their activity everyday on Facebook.

Each month these users log in, play, and share games with their friends. Moreover – they purchase virtual goods.

For me, 2010 will be remembered for officially creating an additional niche within the online games world – Social games is officially head-to-head with MMO’s (massively multiplayer online games) and casual/skill games.

Who is the big winner here? The virtual goods players.

How can we tell? Here are some observations of the casual gaming industry’s huge influence:

Lingo: ARPU (average revenue per user), social media, LTV (lifetime value), CPI (cost per install)… No longer buzzwords, they are being implemented into new start-ups as well as established business models.

FB: The huge migrations onto Facebook strengthen two main and somewhat obvious factors:

Social Media & Social Games are not a seasonal trend
Virtual items-based business models are efficient & profitable while subscription is slowly fading out.

Acquisitions: We are witnessing the ongoing acquisitions of gaming studios and developers for hundreds of millions of dollars, with the main goal being better games and an interactive and localized user experience, creating a feeling of true value for the users (which leads to spending).

Appeal to Users: As a result of the recent growth in the social gaming arena, users can find relevant and intriguing games easily.

So I leave you with the question: “What must game developers and games creators understand to stand out in the industry?”

In Part Two, I will outline the essentials and a check list for monetizing a social game.

Author Uzi Arbiv is the Director of Sales for the performance marketing arm of Adsmarket. You can contact him at uzi.a@adsmarket.com

See Uzi’s other post:

Virtual Currency – Media Types for Online Games Applications

Virtual Currency: Getting Zen about Incentivized Offers

Dec

Hello again dear bloggers!
First of all, I would like to wish all of you a great holiday season.
All the best from all of us here at Adsmarket!!!

In my last post, Virtual Currency – Media Types for Online Games Applications, we discussed virtual currency media, and the way it can positively contribute to gaming advertisers and business models. In this post, we will explore the biggest and, some say, the pioneer market for this media type – Asia.

A few weeks ago I had the great opportunity to attend Gstar in Busan, Korea. This conference was an excellent example/reminder for gaming advertisers
concerning the potential of VC and the Asian market place. It also lent decent proportions to the western world, and the fact that over here, we are seeing just the tip of the revenue iceberg.

Believe it or not:
The virtual goods industry in Asia is generating about $7 billion a year in revenue, about seven times the number in the U.S. This means one thing: call it incentivized traffic; call it virtual currency – IT WORKS.

Asian Potential
Here are a few interesting facts:
The Asian population count now a days: 3,808,070,503 of which 738,257,230 are internet users, with a growth of 545.9 % for the past 9 years – and GROWING!This means serious business!!!

The Asian market is producing a significant volume of traffic, but there are drawbacks, to be fair. Due to barriers like language, currency/exchange rate, and user value, however; promoting online games/MMO campaigns and optimizing them is a challenge if you are not local or familiar with the local marketplace.

Even with these challenges, the general assumption is that volume will be high, and with the right content/game you can gain users that will spend more time playing and eventually – paying. Deeper research will show you that most developers/ games companies keep the marketing agenda for APAC in-house. The user value is outstanding, not to mention that demographic wise, this is targeting heaven.

The Fuss Over VC
Getting back to Gstar, after meeting with a few industry veterans, I was surprised to hear that they didn’t seem to understand why the western world is making such a big deal over virtual items and the way they are being distributed.

When I spoke with some of them about recent “industry-shattering” events, like when EA acquired Playfish (tiny cash deal…), Offerpal hiring a new CEO and Zynga launching Farmville.com , they didn’t seem to be excited at all…

“This has been our business model for years…” & “It’s only getting bigger by the year“ were only some of the comments I got back.

This made me wonder: Why is the western world still labeling virtual items as a negative feature? What is it about two different societies that can label this controversial traffic source as a godsend or a disease? In other words, what’s all the fuss about ???

From my experience working with large gaming advertisers for the last few years and monitoring the buzz surrounding the virtual currency platform, the issue is the way it’s being introduced to the user. And I don’t necessarily agree with it.

After all, how do advertising and marketing work? Consumer behavior is amazingly predictable, which is what advertising is based on. Simply put, the consumers who manage their spending and take the time to read the small print are probably thinking the same thing that my friends at GStar were. What’s the fuss about?

We should be happy that the affiliate marketing industry is growing and creating new opportunities for both users and publishers to benefit from. We know that each media type has its own arguments, and just like any competitive industry, the online space requires thinking outside the box.

The only reason to bash on it is if you are jealous that you didn’t think about it before…

If it hasn’t been said before (and it has), here’s some advice for every online consumer – check before you click, and there ain’t no such thing as a free lunch.

A New Creative in Town: Social Network TextAds

Nov

Contributed by Eitan Burshtein, Senior Director of Product

In Uzi’s last post, he revealed some useful advice for online advertisers about the

fast growing media channel of Virtual Currency. In this post I would like to assist
online publishers and affiliates in using Adsmarket’s platform to help you start
making money in this media channel in a fast and easy way!

A couple of weeks ago Adsmarket released a version update that included a new
creative type called ‘Social Network TextAd’. My team (the under-the-radar/
behind-the-scenes types, aka PRODUCT MANAGEMENT) was very excited
about this release, because of what it offers to affiliates. Social Network TextAds
allow you to easily create banners for the virtual currency media channel.
Furthermore, this creative type is already used by our affiliates in additional media
channels which will be explained later on in this post.

So what actually IS a Social Network TextAd?
Each creative is built up from 4 elements:

Banner
Title
Description
Flow

Here is an example of a Social Network TextAd from the Adsmarket Platform:

Our new creative type has several advantages which make it very attractive to use:

Affiliates can download a single creative via XML or mass creative download
using Adsmarket’s API. This is a very powerful feature which allows you to
easily retrieve a big number of creatives.
The creative can be easily costumed by the affiliates according to their needs.
We provide the image and content (Title, description and flow) and the
affiliates can freely design the banner to boost their CTR!
As you can see in the screen shot above, the Social Network TextAds support
multilingual offers. This is of course available only in non-English offers provided

by the advertisers.

As I mentioned in the beginning of my post, Social Network TextAds are already
used by affiliates, not only in the Virtual Currency media channel but in other media
channels as well. Those of you who run SEM campaigns will find this new creative
type very suitable and comfortable for your needs by retrieving the content of their
banner each element separately.

In this post I explained how we at Adsmarket intended that affiliates make use of
the Social Network TextAds and how our affiliates already making money by using
it in different ways. Do you think that you have more great ideas like these two? If
the answer is yes, we will be happy to hear from you!

Virtual Currency – Media Types for Online Games Applications

Oct

Adsmarket’s media activity with online games has been growing rapidly for the
past year. This is due to two main reasons:

1. Great growth in this online field & user’s awareness.
2. A combined synergy between these applications & Affiliates/Publishers.

I wanted to share with you a fast-growing media channel that you MUST use or at
least try, for your upcoming campaign – Virtual Currency. (If you don’t know much
about virtual currency yet, I won’t go into it here, but two sites I like explain it really
well. Click here or here.)

A lot of online games providers (either developers or publishers) have been offering
their users Virtual Currency because it is a simple and user-friendly way to spend
money online as a part of the gaming experience. It is also a very targeted media
source, as many affiliates and publishers offer Virtual Currency to their users via
social media applications, MMO applications, portals, etc.

Many of my clients are resistant to opening their campaign to Virtual Currency, but
once they understand the potential for them the reservations become a thing of the
past.

No matter what kind of games you are promoting; Skill games, Casual Games,
MMO, MMORPG, virtual currency is a proven source of positive ROI.

You guys think I am just trying sell something? From Google:
“Virtual Worlds Forecast to Grow at 23% through 2015 – Micro transactions
expected to grow to $17.3 billion by 2015.”
“While virtual goods have been driving revenues in Asia and Europe for
years, 2009 will be remembered as the year virtual goods-based businesses began to
scale in the United States. Virtual goods may be bringing the largest disruption
entertainment, communication, and e-commerce infrastructure companies have seen
for a long time.”

Now, tell me you don’t want some of that money in your pocket…
This is the perfect opportunity to be open to change, modify your business model, and make
more money! I’ve learned time and time again how dynamic the online advertising industry is,
and it certainly pays to be flexible. If you are not open to that, stop reading now. Otherwise,
let’s get down to business.

So, how can virtual currency contribute to your online campaigns? The answer is very simple:
The right attitude and good campaign management, starting with knowing how to evaluate
your revenue stream. To calculate this you will simply need the data below (and a bit more)

Current number of active & paying users.
Average amount a user spends per country/application/game.
Amount paid to acquire new users – in terms of media buying & the above.
Conversion ratio from a registered user to a paying user. (as a unit of time)
Average user lifetime.

This data will show you a general picture regarding the revenue you are producing from the
campaign.

Case Study:

You have 10,000 registered users on your site, out of which 10% are a becoming paying
users spending $1.00 per month (after an average of two months from the day they
registered). Average user lifetime here is about 6 months.

If the above is correct, once the campaign is live two months from now, this site will
be generating 10K per month (not including media selling and other services etc) and
possibly more. What are our expenses using traditional media sources such as
Banners, Paid Search, or Pop up/under? Costs can average around $1.00, if not
more.This is the point where added value of Virtual Currency kicks in: higher
volumes with potential to increase your revenue.

Bottom Line: Using Virtual Currency will provide you around 5%-3% in
terms of paying users – however, you will also pay half, if not less, per user. -

That’s an additional 3K-5K per month!

Look at your Facebook profile; how many kisses have you sent lately? How many

vegetables are you growing? When was your last big win playing Texas holdem?
Many of us are already a part of the virtual currency wave as participants. Look
what may happen to Zynga! we can only learn and make more money!

Uzi Arbiv is a Senior Sales Representative at Adsmarket, specializing in the Online Games vertical.

If you are an advertiser and would like more information, please contact him at uziATadsmarket.com.

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