Social Media Gaming – A Future, Part 2

Apr 19, 2011

In last week’s post, we examined the social media gaming market and asked the question “What will the online video gaming foment in the social media marketing space mean to brand marketers?”  This week, we have the answer.

For brand marketers, their ultimate functional goal remains, as always, customer engagement leading to repeat purchases of products and services.  The name of the social gaming game is more eyeballs and longer brand engagement. Gaming can be used socially to reach a vast array of customers who may have little to nothing in common outside of the gaming networks in which they choose to participate.

Fortunately, social gaming is simply a variation on quite familiar (and centuries old) customer loyalty programs—in this case just updated and pixelated to deepen brand involvement and create online buzz.

Social games are popular because they cover a range of genres, including RPGs, strategy games, virtual worlds and action. What they all share in common is that they can be played in 5-10 minutes, making them perfect for coffee breaks (or discrete loafing). Many games can also be played between and among friends and replicate the fellowship of sitting around a board game, while the quest for top scores plugs into the human competitive edge.

With 62 million U.S. Internet users (or 27 percent of total users in the U.S.) playing at least one game on a social network per month, advertisers are spending lots of money hoping to cash in on all those eyeballs. Users are obliging by increasingly spending their money to buy virtual goods like “ammunition,” “crops” and “new levels” as they get deeper into their gaming habit.

According to research from eMarketer, users are expected to spend $653 million in virtual goods in 2011, 28 percent more than last year with $248 million coming from lead generation and $192 million from advertising.  eMarketer says virtual goods will continue to lead the way in generating revenue for the industry with a 60 percent share in 2011 and 2012.

Marketers are also spending money on “lead generation” campaigns – or the exchange of a user signing up for their newsletter or special offer in exchange for free virtual goods for a favorite game – with the hopes of enticing the user to sample or test their products.

According to a Feb. 2010 survey from game publisher PopCap, men make up 45 percent of the total social players. But the person most likely spending time tending virtual farms (and maybe even whacking rival wise guys in Mafia Wars), is a 43-year-old woman who plays several times a day, even though she holds a full-time job (and most likely has kids). She’s also most likely to be playing FarmVille, Bejeweled Blitz, Texas Hold’em Poker, Cafe World, and Mafia Wars, and has likely played an average of six games — many of which were recommended by friends. Facebook is her preferred gaming destination of choice. In fact, 83 percent of those surveyed say they choose to play on Facebook over other social networks. That’s not exactly a surprise, though, given the dominance of Facebook and the fact that most social games land on Facebook first.  As for spending dollars on playing these games, over 50 percent say they’ve earned and spent virtual currency in these games (but only 28 percent have bought virtual currency using real-world money).

MSN Games reports 40 percent of their casual games customers are college graduates or higher, 25 percent are in a professional or managerial role at work, and 55 percent have a household income of $50,000 or more.

“Social gaming has a business model,” Jonathan Miller, Zynga’s head of digital media, told the Abu Dhabi Media Summit in March 2011. “People who play FarmVille actually spend real money to buy virtual food or whatever it may be for their pig.  Most people don’t but enough do so that it’s a real business.”

In an online world hyper-sensitive to advertiser intrusion, brands have experimented via social engagement and branded content with ways to make their messages not an interruption but desirable in their own right.  The challenge to brands is to capture customer attention and then make themselves a part of the rhythm of their customers’ lives, sort of scratching the itch to play games that reinforce a relationship with a brand.

The true skill lies in combining brand messaging and game player desires in a coherent way.

Gabe Zicherman, the author of the book Game-Based Marketing, notes that brands have lost the ability to tell consumers what their preference is—instead, consumers defining that preference are now relying on the opinions and calls to actions of their peers.  Social utility has allowed consumers to cooperate and compete with others in their social graph (the map and database of who is connected to whom) and their neighborhood, driving deeper engagement.

Brands can use game mechanics as a system through which they can inspire a call to action.

But, if a game-based marketing program is not properly executed, things can go horribly wrong.