The Name Of The “Game” Is Engagement

August 9, 2010

Future brand loyalist or virtual goods buyer?

Introduction

Social gaming start-ups are a hot commodity these days.  In the past 12 months, Playfish was acquired by Electronic Arts and Playdom (more recently) was acquired by Disney.  Zynga, which remains independent, has a valuation that’s reported to be as high as $5B.  I expect that CrowdStar, another independent gaming start-up, will be acquired before 2010 closes.

These gaming companies provide “free to play” games on the web and on smartphones.  They then sell virtual goods (within the games) so users can achieve an elevation in status (e.g. a sharper sword, more crop for the farm, designer sunglasses to replace your generic pair, etc.).

Sustainable Growth Can Be Challenging

These gaming start-ups have attractive attributes:

  1. Ability to generate hundreds of millions in revenue (in some cases, more)
  2. High growth rates in users, revenue
  3. High profit margins, since the “cost of goods” (for virtual goods) is virtually zero

While it’s hard to argue with the results that these start-ups are turning in, I wonder if we might be in a mini-gaming-bubble, in terms of current valuations and the potential of sustainable, long term growth.

Social games can be similar to the recording and film industries.  Success depends on the blockbuster hit.  Over time, it becomes more and more challenging to consistently produce the blockbusters, especially in the face of growing competition.  Today, Facebook serves as a great “record label” for the gaming companies.  It provides a marketing vehicle that you can’t find anywhere else – “distribution” to its 500+ MM “listeners” (users).

The gaming companies know, however, that they can’t put all their eggs in the Facebook basket – hence, the plans from Zynga to launch their own Zynga Live platform (as one example).  The gaming companies need their blockbuster hits to turn into self-standing brands (e.g. FarmVille), which then relies on a variety of distribution vehicles.

We know that consumers can be fickle, however.  Recall the progression of “hot social network”, from Friendster to MySpace to Twitter/Facebook.  Games will have a related challenge.  FarmVille is not going to be the #1 game forever, which means that Zynga is already figuring out the “next FarmVille”.

I believe there will be a short list of winners in a market that will be increasingly fierce.  In addition, I wonder if over the long term, the rate of virtual goods purchasing is sustainable – or whether it will continue to grow over the long term.

A New Game in Town?

One of the challenges of the virtual goods model is the funding source. Revenue growth is dependent on fickle consumers, who could love your game one day and move on to another game the next day.  And yes, I realize that part of good game design is to build in the hooks to create user loyalty.

That being said, what about services whose funding source comes from brands that want to reach consumers?  The bills in their “wallet” are of higher denominations than the $1’s and $5’s that consumers use to purchase virtual goods.  In addition, “brands are already brands”, which mean that they have a pre-existing following from consumers.

Foursquare

Consider Foursquare.  Some consider it a “location based service”.  I view Foursquare as an engagement platform that’s built on top of a location based system.  In fact, Foursquare has a loyalty program that generated successful outcomes for Starbucks, Ben & Jerry’s, Whole Foods and many others.

The Foursquare business model is both powerful and scalable: powerful in its use of technology (e.g. location based check-ins) and scalable in leveraging existing brands (e.g. Starbucks) for the consumer following and activity.

Location based technology is great, but the long term success of Foursquare is more about the engagement and loyalty programs it facilitates for brands, based on the applicable and available technology of the day.

Nitro Participation Engine from Bunchball

Keep your eye on the Nitro Participation Engine from Bunchball – a Silicon Valley start-up who counts NBC, Warner Brothers and Victoria’s Secret as clients.  The Nitro engine “drives participation using Gamification”, which means that any brand can easily add gaming elements to their web site(s) – and then leverage the Nitro engine to track user actions, points, status and leaderboard. In addition, brands can use Nitro to deploy and sell virtual goods.

What This Could Mean

I think we could be witnessing a transformation of the advertising industry.  If the 90’s and the 00’s were about banner ads and paid search, this coming decade could be about engagement and loyalty platforms.

Foursquare, Bunchball and others have much to gain – if they can tap into a small percentage of the $100+B spent on advertising annually, they’ll make their investors very happy.

These engagement platforms can move from brand impressions (90’s) to brand engagements – where the engagements are longer lasting and more valuable than a click on a paid search ad.  They’re more participatory and can result in immediate purchases (e.g. the latte that someone just purchased at Starbucks).  In addition and perhaps more importantly, they enhance loyalty between consumers and brands, which is great for the long term.

Of course, sustainable growth is a challenge with any technology. Engagement platforms will face their own challenges as they see adoption grow.  Consumers will only be able to participate in so many engagement or loyalty programs.  That being said, consumers are taking batting practice right now – the first inning has yet to start.  Enjoy the ballgame!

I’ve now managed to speak enough.  Leave a comment below to share your thoughts on this topic.

Related Links

  1. ClickZ article (by Christopher Heine) on brand engagement featuring Booyah, Loopt, Brightkite, Gowalla and Stickybits
  2. Foursquare’s Future Slowly Takes Shape“, by Om Malik of GigaOM
  3. Social-media games: Badges or badgering?“, by Caroline McCarthy of CNET

Virtual Events In Europe: Best Practices, Learnings And Observations

April 19, 2010

The following is a guest post from Miguel Arias of IMASTE.

In the past months we have delivered a virtual career fair in partnership with Monster.com in various European countries. After a number of successful events in France, United Kingdom, Ireland and Italy (and with the imminent launch of the German version and preparations underway for the Polish and Czech versions), it is time to evaluate the project.

With a reach of over 400,000 unique attendees and more than 200 participating exhibitors to date, the Monster European virtual job fairs have become a very relevant case study about the way virtual events and tradeshows are being hold in Europe.

There are a few issues that I would like to point out:

Market differences within Europe

The fact that each of those markets has a different language is a known fact, which demands a certain level of customisation capabilities in the virtual event platform. This affects not only the code language but also all the 3D environments, interfaces size, fonts, etc.

And some of the countries have many official languages; therefore virtual event platforms need to have “real time” Multilanguage capabilities.

But, there are some other subtle differences that may have a big impact for virtual event production and development. For instance, legal differences lead to changes in the résumé data model and in different levels of integration with the partner´s databases.

Different customer expectations

The penetration and market awareness of virtual events is different in the UK, France and Italy. This leads to relevant gaps in terms of pricing, willingness to pay or expected features for the potential customers in each of those countries. Live interaction seems to be more relevant in UK or France, while an immersive user experience ranks higher in the Italian market.

We have also observed that French companies are keener to virtual stand customisations than British companies. It is difficult to generalise, but there seem to be some trends there.

Different marketing approach

In line with the last idea, the effectiveness of some marketing tools is quite diverse. The use of social media to promote the event has proven more successful in our French events than in other countries, while the effect of SEO/SEM strategies have worked better in UK. There is a need of knowing which are the best specific web traffic drivers of each country, to ensure high quality attendees in each event.

Vendor – client relationship

Since virtual events are “live” events, there is a need of a common trust between the event producer and the virtual event vendor. In order to build this relationship, factors like distance, time zone sharing and face-to-face trainings, meetings and follow up are very relevant.

We hired native country managers in Imaste for the French and British market, and will be doing the same with the Italian and German market in the following weeks.

To summarise, I would say that, the Monster Virtual Career fairs, in spite of being delivered for the same company and being the same type of event, implied an important percentage of adaptation and flexibility in each country. And the personal relations that go with a good level of service, involve a cultural understanding of country related particularities.

I believe that Europe can’t be considered a homogeneous market as the US is. American vendors should take this into account when entering the continental Europe market.

About Miguel Arias

Miguel Arias founded IMASTE in 2003 in hopes of building a bridge between companies and university graduates via live career fairs. Over the years, IMASTE has evolved to become one of the major agents in the virtual trade shows and events market, with successful projects in various European and South American countries

IMASTE is a Spanish company, European leading provider of virtual events, 3D online environments and online trade-shows, which connect, inform and engage visitors and exhibitors. IMASTE´s customized solutions reduce travel costs and are environmentally friendly, while our customers are able to generate leads, networking, increase online sales chances and communicate projects or services globally.

IMASTE has delivered more than 100 successful virtual events for global clients across the globe. You may find more info in http://www.imaste-ips.com

Miguel holds a MEng in Civil Engineering from Universidad Politecnica de Madrid and a Professional MBA from the Instituto de Empresa Business School.

Related links:

http://www.monster-edays.fr/2010/printemps/

http://www.monstervirtualjobfair.com/DEMO/

http://www.fieralavoromonster.it/

http://blog.imaste-ips.com

http://www.imaste-ips.com


How To Market Your Virtual Event

February 18, 2009

marketing_sherpa

MarketingSherpa published an excellent primer on Virtual Event Marketing.  The 10 tactics listed were:

  1. Partner with assocations
  2. Invest in PR
  3. Get exhibitors involved
  4. Advertise on relevant web sites
  5. Market to internal email database
  6. Email registrants the day before and the day of an event
  7. Use social media to attract attendees
  8. Emphasize the value of the event
  9. Use the virtual event’s microsite
  10. Use sweepstakes as an incentive

Based on my involvement in marketing virtual events to an Information Technology (IT) audience, I’d like to add the following:

  1. Promote early and often – get your microsite launched up to 2 months prior to the live event.  Time is critical, because it gives you options to try different tactics, measure response rates and adapt accordingly.  If you leave yourself too little time, your flexibility is limited and your registrations will suffer.
  2. Invest in search engine optimization (SEO) – make sure your registration page and microsite are optimized for SEO.  For more insights into SEO for virtual events, see this blog posting: https://allvirtual.wordpress.com/2009/02/02/search-engine-optimization-seo-for-virtual-events/
  3. Invest in search engine marketing (SEM) – just like you’d buy keywords to drive visitors to your corporate web site – figure out which search terms are relevant to your virtual event and spend a little of your budget purchasing search engine keywords to drive clicks to your virtual event microsite or registration page.
  4. Use interactive technologies to draw attention – with the amount of email received by your target audience, it’s harder and harder to stick out from the crowd.  To do so, use interactive visuals like a screencast (to give users a sneak preview of what your virtual event environment looks like) or a short video clip embedded within an HTML email.
  5. Use a variety of promotional vehicles – email is the most heavily used, but not all of your users pay attention to promotional emails.  So try display ads, placement in e-Newsletters, text links on publisher web sites and sponsorship of relevant sections of web sites.
  6. Highlight the prominence of expert speakers – in some industries, a well-known speaker can generate the audience all by herself.  If you’ve secured such a speaker, be sure to promote her prominently.  In fact, use her name right in the Subject heading of your promotional emails.
  7. Highlight the ability to interact with executives and experts – once you landed that expert speaker, invite her to participate in the virtual event after her speaking appearance.  In fact, in lieu of a Q&A after the Webcast/Videocast, have her appear in the Networking Lounge to answer questions there (via text chat), interacting directly with the audience.  In addition, invite your executives to participate and interact with the audience.
  8. Display the list of exhibitors – as you sell sponsorships, display the list of companies who will be exhibiting.  That may convince some users that they need to attend – what better a way to narrow your purchasing decision than to “meet” with the candidate solutions providers in one fell swoop?
  9. Provide a sales contact for potential exhibitors – some registrants of your virtual event may represent companies who’d like to exhibit (sponsor).  So give them an email address or phone number and you might have just sold an additional sponsorship.

What has worked well in promoting your virtual events?


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