Social Gaming: An Intro for Advertisers
Social gaming is big…really big. To give you a sense of scale, here are some facts about the most popular social game, FarmVille:• More people currently play FarmVille than have ever played Tetris
• There are more FarmVille installs on Facebook than there are twitter accounts
• FarmVille has more monthly active users than the population of France
In other words, if you don’t know much about social games, you’re missing out. Fortunately for you, this post will give you some background information on these games so you can have a great answer when your boss asks why you aren’t advertising on FarmVille.
What are social games?
Social games are simple, easy-to-play games that people play with their friends on social networking sites such as Facebook and MySpace. They are similar to online casual games, but with significantly more social elements.
More specifically, social games have the following characteristics (thanks Ayogo):
• Simple to figure out, play, and advance levels
• Easily set aside and picked up later, with progress maintained
• Free or relatively inexpensive for basic gameplay
• Played on social networking sites like Facebook and MySpace
• Highly integrated with your social network, with social activities being a key component of gameplay
• Virtual currency is often used, which can help you achieve more in the game by paying money or signing up for advertised offers
Currently, two of the most popular games are FarmVille (where players manage a farm involving harvesting crops and raising livestock) and Mafia Wars (where players complete jobs to advance their criminal careers).
Why are they so popular?
There are a few obvious reasons why they are popular: they live on a platform where people are already spending a lot of time (i.e. Facebook or MySpace), they involve the player’s friends, they are fun and easy to play, and they don’t require much time or attention to make progress.
There are also psychological benefits that make them appealing to players. The CEO of Zynga (the largest social game developer and creator of FarmVille) thinks social games have been successful because they:
• Make players feel like they’re playing with their real friends
• Offer ways for players to express their personality
• Reward players for being part of a sustained experience
In addition to these reasons for the popularity of social games, there is another key driver of their success – relentless viral promotion. Social game developers have mastered the art of spreading the word about the game through social networks. When you sign up for the game (and at most milestones during the game) you are asked to push out notifications, invites, reminders, and requests to your Facebook page and to other friends. These viral features are highly integrated into the game and are one of the key components in the design of the game. The promotion is so extreme that many Facebook users have even complained that there are too many status updates coming from these games.
The most popular social games are also heavily cross-promoted. For example, in the highly coveted area above the gameplay section in FarmVille, Zynga doesn’t sell advertising space but has their own banner with links to their other games. This, along with Zynga’s estimated $50 million a year spend on advertising within Facebook, keeps these games top of mind for many Facebook users.
Who plays social games?
Every day, more than 65 million people are playing social games. Players generally skew younger and female, but different types of games appeal to different demographics. Here are some stats for two of the most popular social games:
FarmVille (80 million active monthly players)
• 60% female, 40% male
• 18-34 yrs old
• Average session is 33 minutes
• Most popular time to play is 8-9am
Mafia Wars (25 million active monthly players)
• 30% female, 70% male
• 18-34 yrs old
• Average session is 20 minutes, twice a day
• Most popular time to play is 8-11am
How do social games make money?
There are two ways that games make money – advertising (both branding and lead generation) and direct payments.
It’s true that you can play most games for free, but if you want to progress more quickly, it will cost you. Most of the games rely on you earning virtual currency to perform better. You can get some of this virtual currency through regular gameplay (like harvesting crops in FarmVille), but you can also use your credit card or paypal to purchase virtual currency with actual money. Note that we are not just talking about a dollar or two, the default purchase amount in FarmVille (shown below) is $50!

Note: In FarmVille, $50 dollars will get you a manor, a few barns, and a whole bunch of chickens.
The other way to get virtual currency in these games is by completing advertised offers.

Note: Completing one offer will get you the “Farm Cash” equivalent of between $5 to $50 of real money.
These offers often involve signing up for a subscription based service (usually with a free trial) like Netflix or a book club. There has been some controversy around this practice, though, because some of these offers have been somewhat “scammy.” For example, an offer might have the player fill out a simple survey and have the results sent to a mobile phone number. Unbeknownst to the player, the fine print states that the player is actually signing up for a monthly service that will automatically be billed to their phone account. There have been many complaints of unsavory lead generation practices like this one. One study even found that a quarter of all players have felt misled by an ad or “special offer” from a social game.
Fortunately, the large game developers have been cleaning up their act recently on these type of offers (because of pressure from Facebook). It’s actually a very interesting story about how these tactics came to light and the repercussions they caused - you can read more about it here.
How can advertisers leverage social gaming?
The main opportunity for advertisers is running lead generation ads - where players sign up for something (or take some action) in exchange for virtual currency. Branding ads are not as prevalent because banner ads around the game are mostly used by game developers to cross-promote other games.
If I could give you one piece of advice about running lead gen ads in social games it would be “proceed with caution.” The issue I have with these incentive-based ads is that many players probably aren’t interested in the service they are signing up for. They are simply using it as way to get virtual currency without having to pay actual money.
Just imagine how many people are signing up for free trials and then quitting before they end. And think about other people who sign up for a subscription service with every intention of canceling, but simply forget to cancel at the end of the month. They are going to be quite upset a few months down the road when they notice the recurring monthly charge that they have been billed. Seems like this system generates a lot of bad leads and could even hurt the brand if consumers feel misled by the offer. Of course, companies with sophisticated analytics like Netflix must be finding that it’s cost-effective for them to continuing advertising within social games. But if you don’t have the robust analytics to back up your investment in these ads, you may want to stay clear of them.
Recently a new type of ad, more focused on branding, showed up on FarmVille. Microsoft placed a display ad for their Bing search engine on the main page of the game. Players could click on the ad to become a Facebook fan of Bing and receive free virtual currency (3 Farm Cash) in return. During the single day that the ad ran, Bing’s Facebook fans increased from 100,000 to 500,000. Impressive, right? Yes…but are these “fans” really fans of the brand? Probably not. I’m unconvinced that it’s a good strategy to do whatever you can (essentially bribing people) to get more Facebook fans.
In any case, social gaming does offer advertisers the opportunity to reach many people who are quite willing to sign up for offers in exchange for virtual currency. I’m sure there will also be new advertising models emerging as the social gaming space matures over the next few years. You should certainly keep your eye on the space and consider whether or not it makes sense for your brand.

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