DIGIDAY:SOCIAL – Social Gaming and In-Game Advertising

Panel – Game On! Using Social Games to Reach Your Target Market

$300 million are be spent on in-game brand advertising, and this figure is growing.  How can brands use social gaming to advertise their brand and how is the market changing?

Dayna Grayson, Principal at North Bridge Venture Partners (moderator)

Jessica Rovello, President & Co-founder of Arkadium

Josh Glantz, VP & GM at Publishers Clearing House Online

Robert Victor, Product and Strategy at appssavvy

Chris Hewitt, Founder and Executive Producer, Mindbloom

Grayson noted that the phrase “in-game advertising” has been around for upwards of six years.  How is this evolving, and have social games made this outdated?  Rovello explains that gamers tend to go where the people are, which is now Facebook social gaming.  As opposed to other online advertising, you get a strong return as a game is shared across social graphs.  Glantz describes chat as the simplest form of social and sees it as an advantageous addition to gaming.  With Facebook Connect, you can keep a game on your own page and still utilize viral elements.

According to Victor, it’s important to note what your goals are when planning a game.  It may not be sufficient to just have banners around a game.  While social gaming in not new, the ability to reach consumers on multiple touch points is new, and this can lead to additional conversion.  Rovello shared another benefit to Facebook social gaming, which is that the applications provide developers with a good deal of information about the player.

Hewett described gameification, which is leverage what motivates people to stay in games and applying it to non-game scenarios.  Two example of non-games that employ gamefication are Nike Plus (unlocks, leaderboards) and Mint.com.  In addition to engaging customers, these mechanics also allow brands to learn how their customers are using the product or application.

Glantz believes that gaming hasn’t crossed the chasm.  It’s perfectly made for direct advertising and direct response.  Brands will succeed if their target audience matches that of the game they are using.  Victor sees brand dollars just starting to flow into social gaming because the opportunity has not been there before.  Until we can see and measure how people interact with a game (and what contribution a game makes to a campaign’s return), social gaming won’t hit its full advertising potential.  Rovello added that advertising is powerful because it helps developers recoup expenses, as only 5% of gamers will pay directly for in-game items.  The rest contribute through special offers by advertising brands.  The value add for the player, Hewett notes, is when the in-game advertising is relevant to them.

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