On a typical day, an Internet user is more likely to play a social game than pick up a newspaper, according to a recent Nielsen survey. The market for these games, not surprisingly, has boomed, especially in the last six months.
Zynga leads the pack with several of the most popular ones, including FarmVille (build-your own farm) and Mafia Wars (virtual hit jobs). What’s more, Zynga — which reaches 225 million active users per month, according to comScore — is also a business success, on course to earn an estimated $600 million in revenue this year, most of it from selling virtual currency for in-game digital items.
Now the company is looking to turn its audience into a media business. Believing its ability to hold users for long periods of time will translate into a powerful platform for engagement-hungry brands, it’s pinning its hopes on developing a system that takes a page out of Google’s book and creates scale.
To achieve this, Zynga has hooked up with engagement ad network SocialVibe to run simple in-game placements offering rewards — such as Farm Cash to help fund a virtual tractor in FarmVille — for completing brand-related tasks. The engagement offer would appear as a simple message at the bottom of the screen. Earning the currency could require watching a video, say, or filling out a survey. Zynga charges brands on initiated interactions. The price per engagement averages about $1.
“We have a product that allows brand marketers to have their own custom engagement,” said Michael Comerford, a former Google sales exec who’s leading Zynga’s ad efforts. “I like to call this opportunity ‘on-game’ advertising as opposed to ‘in-game’ advertising.”
Zynga has made some missteps in building out its marketing business. The firm came under fire last fall for its direct-marketing offers program that invites users to earn virtual currency in exchange for accepting an offer like a movie-rental subscription. Some of the offers were of dubious value, prompting Web site TechCrunch to dub it “Scamville.”
The company, which maintained that the offers are a small part of its business, put a temporary hold on them. It has subsequently returned to them, but believes it will be a small part of its ad business, according to Comerford, who adds that Zynga has raised the quality of the offers. ProFlowers, for example, is running a Mother’s Day promo that lets FarmVille users earn virtual cash if they accept an offer to send real flowers. The problem with such programs: people are likely to only sign up for an offer or two. With brand engagements, players can earn virtual currency daily.
“The opportunity is orders of magnitude larger in the brand space than the direct-response space,” said Comerford.
The challenge for Zynga is weaving brands into the game experience. It’s had some experience with this. Last December, for instance, it worked with Universal Studios Home Entertainment to promote the DVD release of Pubilc Enemies in Mafia Wars. The weeklong program, brokered for Zynga by Appssavvy, drew 55 million brand interactions.
Comerford noted that the challenge was that such integrations, which require working with developers to weave the brand into the game, are difficult to scale. And brands often weren’t willing to pay what Zynga thought it was worth, particularly since in-game advertising does not have universal metrics and finding challenges appropriate to the game environments can be difficult.
“The work it takes to do a custom integration is fairly intensive,” said Comerford. “We’ve only had a few instances where the opportunity met that threshold for investment.”
Early results from a dozen Zynga engagement ad campaigns have been promising. Over 80 percent of users who begin a brand engagement complete it, no doubt lured by the reward. Zynga recently ran a Café World promotion for YellowBook.com that offered users virtual currency in exchange for searching for and then writing a review of a local business. The cost per completed review was less than a quarter of what they saw through other online marketing programs, according to Joe Marchese, president of SocialVibe.