Archives For February 2012

I have argued in this blog for months and at tradeshows that social game companies need to create robust marketing strategies (not simply rely on performance marketing) to survive and prosper. Today, I will talk about how you can create effective video ads (either for YouTube, television, or something in between). I was inspired to create this post by a recent Harvard Business Review article, The New Science of Viral Ads. In fact, this post largely summarizes that article and discusses how it could be applied to social game marketing.

Do not force your brand or product down the user’s throat

The first principle in creating ads that will go viral is not to make the branding or product name too prominent. Consumers are very sophisticated and this practice will turn them off immediately. Instead, subtly show your game, via screenshots or people playing it, repeatedly without the big logo popping up every five seconds.

Avoid boring viewers

Consumers have many alternatives, even when viewing ads, and can quickly get bored if the ad is not entertaining. To keep viewers, you need to introduce joy and surprise quickly; you need to generate at least one of these responses early on. What is also interesting about the research that points to the need to build quickly joy and surprise is that it is very similar to good social game design.

Users will watch for a while but then stop

A video ad that creates joy quickly and delivers it at the same pace have been shown to be ineffective at engaging consumers for long periods. Instead, an effective video ad will create an emotional roller coaster; ie. joy-no joy-joy again-no joy again-etc.

Even popular ads are often not viral

The HBR article showed that even ads that people liked are often not shared. Given that the goal of your video is probably is to persuade as many potential players as possible to try your game, virally spreading the ad is one of the most important means to achieving this goal. To increase your odds of going viral, the authors of the article suggest surprising the game players without shocking them (no naked videos of the CEO ).

Even perfectly done videos often are not viral

The final point that the authors of the article make is that only a small subset of perfectly tailored videos ever go viral. The way around this problem is to target the viewers who will share the video. The people who are most likely to share videos are ones who demonstrate extroversion and egocentricity. Obviously, you can just target your ads to those who are egocentric (at least I have not seen that checkbox on the Facebook Ads submission form) but you can be creative in finding these people. Twitter is a great resource to try to identify the appropriate targets. Even in Facebook, companies are placing ads on the pages of users who often post links.

Putting it together

If you follow the hints above while creating promotional videos, you are much more likely to build cost effective marketing for your games. You may not get it right the first time (you probably will not), but you will be building the skills needed to market your social games in the years ahead.

One of the more interesting developments in the social gaming space is the buzz around gambling. There are rumors and “hints” that the US government at some point will weaken or remove the restrictions on online gambling. I give credence to these rumors for three reasons

  • Zynga’s stock initially broke through its IPO price because of rumors it might move into gambling (the stock subsequently rose because of the projected Facebook valuation). I still believe in the efficient market so do not think the stock would of moved so much if there was no basis to the rumors
  • Caesar’s acquired Playtika for over $150 million. There are few companies that understand the US legal environment for gambling better than Caesar’s and they would not have spent $150 million just to sell virtual goods
  • IGT spent over $500 million for DoubleDown. IGT is the leading manufacturer of gaming (gambling) machines, so like Caesar’s has a great feel for the regulatory environment. And, as above, I doubt they have much interest in the social space without real gambling

The impact of legalized online gambling on the social gaming industry is a little gray. Some of my closest friends, who I strongly respect and are often right, feel it could destroy the non-gambling part of our industry. They believe a Zynga move to gambling and other big players pouring billions into gambling social games would overwhelm the social game ecosystem. Consumers would then equate social games to gambling games and those who are not interested in a gambling experience would feel there is nothing for them in the social space.

I have more positive expectations on the impact of legalized gambling on the social game space. First, I do believe it will draw Zynga’s attention as well as that of some other existing social game companies. I do not see EA or Disney going down that route but many of the others, especially some of the struggling second tier players, are likely to pursue it as a possible panacea. This move will decrease the glut of quality games available to players seeking a traditional social gaming experience (I do not think these players will be scared away by Casinoville), allowing the remaining social game companies to launch and run games in a less competitive environment. Also, with less competition for these players (and I am assuming they are primarily different users than those who will play gambling titles), the cost of performance marketing to these players should stabilize or even fall.

Second, as I mentioned in several other posts, the valuation of social game companies will be largely contingent on the metrics of the industry leaders. As we saw, even the hint of gambling had a strong positive impact on Zynga’s valuation. I also remember the huge valuations of the UK based online gambling companies prior to the US crackdown. If Zynga and other social gaming companies enter the gambling space and start experiencing great revenue growth and strong valuations, it will positively impact the valuations across our industry (and access to capital).

My guess is that it is still awhile away before online gambling is legalized again in the US, especially in an election year, but for the three reasons outlined above I do think it will happen. I also feel it will end up being a great boon for our industry, even those companies not involved in the gambling side.