brand – The Business of Social Games and Casino

Using color to drive growth

My team was recently working on a new product and one of the issues that came up was what color scheme would generate the best results. Rather than rely on our (great) designers and team’s overall understanding of the market, we looked into the literature of consumer behavior and the research on what behavior different colors generated. Reinforcing the value of spending time on your color choices is research that shows 90 percent of snap judgments on products can be based on color. While there is no magic formula (unfortunately make everything dark blue or yellow is not a silver bullet), you can apply consumer behavior to leverage your color choices.

Color and branding

The first area we looked to leverage color was in our branding, ensuring our logo and app icon generated a strong positive response from players. A good article on Entrepreneur, The Psychology of Color, explained that you initially need to ensure your choice of colors is considered appropriate for your product. What would be effective in a bar is very different than the colors you should use for a funeral home. Customers decide a brand’s personality largely by its color scheme. The colors also make the brand more or less recognizable (IBM is defined as Big Blue), and people prefer recognizable brands.

Color choices also can create a unique visual identity. This helps to differentiate the brand and make it more memorable.

The key to choosing the right colors for your brand are using ones that convey the personality you want people to associate with your brand. If it is excitement, colors like red and yellow generate that response. If it is trust, you are best going with a lighter shade of blue. Colors also mean different things in different contexts (green can be environmentally friendly or related to money).

Color and gender

You also need to tailor your color scheme to the gender of your target customer. Blue is popular with both genders while purple is the most polarizing (loved by women and disliked by men). In general, men prefer bold colors while women prefer softer colors. Men are also more amenable to shades of colors as their favorites (colors with black added) while women prefer tints of colors (colors with white added).

Color and conversions

The true impact of color on conversion (making sales) is that you should use color to make an item or monetization opportunity jump out. A red “Buy Now “ button is likely to work great on a predominantly green and blue page but not work as well as a green button on a page with a lot of red. The key is using color to highlight what you want users to consider purchasing. You should use color to leverage the isolate effect.

Think about color

The key to this article is that color is important on multiple levels to your business and should not be an afterthought. The right color choices will create the brand identity you are looking for, appeal to your target market and make customers more likely to purchase.

Key takeaways

Color is a very strong determinant of consumer behavior and you should spend time to make color choices with your brand, logo and product that drive the behavior you are seeking.
Color scheme needs to be consistent with your brand, creating the brand personality you are trying to build.
The key to driving conversions is using color to isolate the elements that will drive purchases, less important than the actual color choices is using colors that do not appear elsewhere on the page or app.

Key themes in Digital Branding and Engagement

I recently finished a course on EdX, Digital Branding and Engagement from Australia’s Curtin University, and while it had a lot of information that is commonly known, there were also some tidbits I wanted to share.

You need to engage with, not talk to, your customers

The focus of marketing is now on an engagement model and not a sales model, where you provide actual value to your customer or player. Traditional disruptive one-way advertising messages are being replaced with deeper two-way relationships with consumers. As a business, you have to consistently engage your customers; which requires compelling content that is interesting, creates value, and has opportunities for interaction. A true value exchange is one that creates loyal customers.

A key dynamic driving this engagement model is that consumers are no longer captive. A captive audience is one where a message is created and channeled to consumers who passively receive content. Consumers are now the beneficiaries of a power shift. The power shift is from media companies who used to control what consumers saw, when they saw it, and how they saw it. Now the power shift is with the consumers.

As they pointed out in the course, the notion of captive audiences is one that lives in the past, even in the online environment. There is a growing acknowledgement that marketing has changed more in the past one to two years, than it has in more than half a century before.

To succeed in this environment you need both to communicate interactively and add value. Give them something for interacting. It could be tips, discounts, compelling stories, etc., with the key being it needs to be something they value.

Customers expect communication

Consumers now expect two way communication. When they are dissatisfied, not only will they communicate this to you but they expect a (fast) response. Consumers expect a two-way dialogue with brands and personalized ads relevant to their needs. Even if you are sending a newsletter, it should be personalized based on your customers’ preferences.

Go to the customer, don’t expect them to come to you

An evolving opportunity with social media marketing is participation marketing. With participation marketing, you build a team around an event that is going to happen on social media, then have them talk about it and respond very quickly (Super Bowl, Oscars, World Cup, eSports, etc.). Rather than creating the event, you piggyback on to a topic people are engaged with, connect your product or game with that content, and create a conversation with potential customers.

Once you engage with customers, on their terms, you can then bring them to your assets. Reaching people in areas they are most interested in, engaging them with content that is directly relevant and taking them through to your owned resources.

How to create great content

Unlike the Mad Men era, content is no longer about making the brand look great. Good content is now focused on the customer and not the brand. The key is when creating content you should put people first, with the product in the background. Good content should be focused on the customer, not the brand.

At a high level, there are four keys to creating compelling marketing content:

A brand should start with a clear vision, focus or story
The vision should be set at senior or strategic levels
The vision must permeate all levels of the business and there should be a long term commitment to the strategy with clear objectives
The vision must be aligned with and support a brand’s DNA

Overall, a successful content strategy is clear and aligned internally not only in the marketing department but with all decision makers.

Key takeaways

Marketing has evolved to an engagement model, where rather than talking to to your customers you provide them value and engage in two-way communications.
Rather than expecting your customers to see your content or visit your owned media sites, you need to reach out to them where they are, for example when they are online discussing a sporting event.
The key to creating effecitve content is putting people first, with the product in the background

Bayes Theorem Part 7: Kim Kardashian

I have written several times about Bayes Theorem and its application to social and mobile gaming but the reaction to the Kim Kardashian game from Glu reminded me how often it is neglected. Bayes Theorem calculates the probability of something happening based on conditions related to the event, prior probability. The importance of Bayes Theorem is that it takes into account the underlying probability of an event happening so that you are not weighing too heavily a local data point or discrete test (you can see the actual formula in my original post).

To illustrate, assume you are trying to determine the chance of a Libertarian candidate winning the US Presidency. You may look at the candidate and see how he checks all the right boxes and could be appealing to the mass market. Based on this information you may think he has a 20% chance of winning. But then if you look at the data of third party candidates overall in the US winning less than 1 percent of elections, you understand that even the strongest candidate at best would have slightly better than 1 percent chance of winning an election.

Reverend Thomas Bayes and Kim Kardashian

Bayes Theorem provides a useful point in not only looking at the success of Kim Kardashian: Hollywood but also applying it to your business. For those not aware, Glu Mobile launched a social/mobile game in 2014 centered around Kardashian. The game was a tremendous success for Glu, with over 35 million downloads, and helped them raise over $125 million in capital.

What is interesting is that this success has created an entirely new category, with multiple companies trying to replicate it, and this is where Bayes’ Theorem becomes important. Glu has signed other celebrities, including Britney Spears, Katy Perry and Nicki Minaj. Demi Lovato is doing a game with Pocket Gems. Rovio develoed a Shakira game. Moreover, virtually every game company and definitely every talent agent is trying to get into the celebrity mobile game business, driving up the cost of using such talent dramatically.

The problem with this approach, however, is that the game companies are neglecting Bayes’ Theorem. Most people inside the game industry agree that 80-90 percent of all games fail (by fail, do not get to ROI positive ad spend and fail to make a profit). This metric is not simply for start-ups but if you look at the major game publishers (Zynga, Kabam, King.com, etc), they deal with the same reality.

Just as having a great candidate for the Libertarian Party does not significantly change the odds of winning the election, Bayes Theorem shows that having a celebrity front a game does not significantly improve the odds of the game being successful.

Back to the Kardashian case, even with an 80 percent chance of failing, there is a 20 percent chance of success. Just because one product, Kim Kardashian: Hollywood, fell into that 20 percent you should not infer that the probability changed.

What it means for your game company

First and foremost, a celebrity does not guarantee success. Rovio’s Shakira game has already failed. Even the Kardashian game is no longer among the top grossing. Thus, a strategy based on celebrity games that does not rely on all of the games reaching Kardashian levels.

Second, everyone knows about the celebrity thing. If it was that easy to make a top-10 game by working with one, the top 10 games would feature celebrities. With so many companies using celebrities, a celebrity will no longer differentiate your product or company. You need to build a product and company strategy that creates a defendable position and compelling value proposition to your player.

Third, you need a good game. A celebrity can lower your user acquisition costs and potentially increase the number of organics, but if the game is not compelling all these new players will not monetize and leave. That does not create any value for your company.

Most importantly, structure the deal to reflect the reality the game probably has at least a 75 percent chance of failing. I know my licensing friends won’t be happy with me, but you need to limit your risk in the deal. With the success of Kim Kardashian: Hollywood, many stars are expecting seven figure royalty guarantees. While you probably do not mind paying millions if you have a top-10 hit, writing a big check for a game that has failed is very painful (and potentially bankruptcy inducing). Structure deals where you and the celebrity share in the upside but you do not bear all the risk. The good news is that and their agent probably are not familiar with Bayes’ Theorem so only expect a success, so they may be open to a revenue share.

Conclusion

Most games fail, so while a celebrity may help it is not a golden ticket to a top-10 game. You still need to deal with the underlying reality that it is a hit-driven business. Thus, it is important to manage your risk if you use a celebrity and build out a robust plan for success.

Key takeaways

Bayes’ Theorem shows that the underlying probability of an event happening drives the likelihood of the event happening, despite changes in the immediate situation. For gaming, as 80-90 percent of new games fail, basing a game on a celebrity will only marginally improve those odds. Thus a game with a celebrity is probably 75-80 percent likely to fail (not formal numbers, just estimates).
Do not build a strategy around the assumption that a celebrity face for a game will make the game a success, you need to still create a product strategy that builds a competitive game.
Structure your deals so that the celebrity receives the bulk of their royalties if the game is successful, so you are not forced to pay millions for a failed project.

It is about creating a monopoly, not winning

In Peter Thiel’s hot book, Zero to One: Notes on Startups, or How to Build the Future, he makes many interesting observations (some I agree with, some I do not) but one in particular is particularly valuable. Thiel asserts that great companies are not great because they beat their competition, they are great because they do not have competition. Although he does not quote Blue Ocean Strategy, it is very consistent with their thesis and data that shows that companies that create new markets have much higher economic returns than those who come up with new strategies to defeat their competition.

Basic economics

Thiel’s point about the benefits of creating what he refers to as a monopoly, what I call a blue ocean opportunity, resonated with me as he use basic economics to prove the point. At its core, classical economics shows competition will drive out excess profits. That is why although Exxon makes a lot of money, they do not make a higher return on investment than another oil company. Whatever you are doing, somebody else will copy.

Thiel points out that, “Americans mythologize competition and credit it with saving us from socialist bread lines. Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away. The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.“ Instead he advocates building a virtual monopoly, a company so good at what it does that no other firm can offer a close substitute. Continue reading “It is about creating a monopoly, not winning”

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Color and branding

Color and gender

Color and conversions

Think about color

Key takeaways

Share this:

You need to engage with, not talk to, your customers

Customers expect communication

Go to the customer, don’t expect them to come to you

How to create great content

Key takeaways

Share this:

Reverend Thomas Bayes and Kim Kardashian

What it means for your game company

Conclusion

Key takeaways

Share this:

Basic economics