In this panel, the experts are focusing on advertising challenges and opportunities in games. They discuss what works and what doesn’t for in game advertising. They focus on what brands really want and how game companies need to start speaking a language advertisers understand. This is a continuation of our live blogging at the seventh panel from Digital Media Wire’s LA Games Conference 2008.

Panelists
Christian Batist, SVP Marketing, Sulake Inc. (Habbo Hotel)
Barry Schaffer, President, Promotional Currency
Julie Shumaker, SVP, Sales & Marketing, Double Fusion
Keith Kane, Co-Founder, SVP, Sales & Marketing, Giant Realm
Mark Friedler, Internet Advertising, Media, Games Entrepreneur/Founder, GameDaily
Moderator: Chris Lang, SVP, Research Strategies, SmithGeiger, LLC

Chris: Any case studies to start?

Julie: Sponsorship and engagement is really where there is opportunity right now. It’s like major league sports. Sponsorship are a really important part of the marketing mix. This is one way brands can reach fans. The combination of engagement and interactive experiences is allowing brands to participate in long play experiences. TMobile spent $60 million on their NBA sponsorship and mobile was the most important part of the campaign.

Chris: Will gamers put up with advertising?

Christian: It works well if you treat the gamers with respect. Logo slapping isn’t the way to go. You need to make it part of the experience. Have them find the ad and they win something and give them ways to wear your brand in the game.

Barry: We will work with the new release to promote it through specific brands or retail outlets. If you think about it like promotional items, but done digitally. Games, music, video can all be used promotional items.

Mark: Games are compelling as media. There is very high engagement. Attention to the game is very different to information around the game. The way to market to gamers is by working marketing around content about the game. CPM models don’t work in this kind of environment. You’re buying time, not really impressions. If you think of games as media, you start thinking about it differently. Free MMO games can monetize via digital goods. You can get very good revenue per user.

Julie: It’s no different than TV. Brands expect to get product placement to go with their impression buys.

Mark: The web is going micro. Everything is splintering. Players like EA want to spend $50 million. If everyone becomes their own media company, how does EA buy advertising?

Keith: These micro environments can be really scary to brands. There’s lots of things going on that brands don’t want to be part of. The marketing needs to be very relevant to the community. He describes a HP campaign for high performance machines that they ran in Machinima communities.

Q from Andrew via Mozes: How does the need for immersive placement impact scalability of in game advertising.

Julie: Without aggregation across lots of games you can’t scale. It takes a network of games to create audiences big enough.

Keith: Brand advertisers need to start thinking differently. Brands think they need a separate budget for game advertising. They should be thinking about how to reach audiences.

Julie: The game industry creates this problem by talking about PSP, Wii, DS etc. Brands should not have to care. They want to buy advertising and engagement.

Mark: We should be talking about engagement. If people want scale, they should go to Google and buy tonnage. There is going to be downward pressure on advertising because there is unlimited supply. You need to be able to offer media buyers engaging programs that are really simple for them to understand. He describes how this one MMO was able to offer virtual currency to members for signing up for credit card applications. The credit card company called them up and told them to stop after one week. The credit card company had a 12 month backlog after one week running the campaign.

Will there be single measure of engagement

Christian: It would be nice, but I don’t think so. The thing is to agree with your advertisers.

Julie: Advertising nomenclature is reach and frequency and CPM. Engagement is measured by ROI.

Mark: It’s also up to the industry to not take stupid ideas. We should segment it into different segments. Google allows you to buy clicks and measure results. If you’re trying to get a lifestyle product marketed, the product needs to look cool.

Barry: Engagement for us product selling, getting a new customer etc. A lot of the programs we run drive trial.

Christian: If people buy Corn Flakes in Brazil, the customer gets Habbo credits. The same type of program is running in Spain and Finland. It’s too early to tell the results, but the Spanish company pulled all their other advertising to focus on the Habbo program.

Technorati Tags: LA Games Conference 2008, gaming, in game advertising

Greg Ballard, CEO & President, Glu Mobile spoke at the LA Games Conference. Greg’s talk is titled Mobile Games 2008: The Right Stuff.

Glu Media is about a $100 million company in the mobile game space. In 2003 the industry was very fragmented. In 2004, Greg thought that an industry consolidation would take place with companies like Verisign, Yahoo, Real buying mobile game companies. It didn’t turn out that way. Now 50% of the market is controlled by 3 publishers: EA(25.6%), Glu (14%) and gameloft (11.8). The rest of the market is made up of huge numbers of publishers. It’s a healthy business for those that are getting big, but not so great for the smaller players.

At what point, does this become a mass market. Greg thinks it already is a mass market. He focuses on the size of the installed base that you’re targeting.

• 56 million next generation game consoles
• 85 million iPods
• 850 million personal computers
• 1.3 billion landline phones
• 1.3 billion internet users
• 1.5 billion television sets
• 3.3 billion cell phone users

There is a huge untapped market to address. Even if only 5% are playing games, that’s 165 million mobile gamers playing every month. While going from 5% to 6% seems small, each percent gained means 33 million new mobile gamers.

Mobile phone game sales are bigger than DS and PSP game purchased combined.

Every minute glu ports 10 games, every second they sell a game. In 2007, glu sold 30 million games.

The business is healthy, the business is mass market. The question is how to grow the pie. The explosion of new players and platforms in the mobile space. We’ve seen the introduction to iPhone, ngage, and android. This is not to take anything away from existing platforms, but Greg thinks its going to change the battlefield because of the companies behind these platforms who are leaders in the digital media world.

These new players are innovating in both hand sets and in business models. We’re seeing direct sales to consumers, bypassing the carriers. This makes it really interesting for content providers. In this kind of battle, content becomes the differentiator.

Flat data plans, better handsets, better merchandising, better games. 44.7 of smart phone users buy games compared to 19.6 on non-smart phones. The difference is related to flat rate data plans.

Greg compares the iPhone to the PSP and DS in terms of capabilities. The iPhone has more memory and more processing power.

If you look at merchandising, it’s about to get a lot better. Just look at ngage. It makes the buying experience much, much better.

If the business is healthy and growing fast, what’s the one thing holding it back. The issue from Greg’s perspective is the way we think about the value we sell games for.
Playstation titles are at $60. PC games are at $50. DS games are at $30. Mobile games sell for $8. The question is what happens to the price point for next gen mobile?

“It may be a small segment of the market today, but this is a puppy with very large paws,” says Greg.

Technorati Tags: LA Game Conference 2008, Greg Ballard, Glu Mobile, mobile gaming, gaming

In this panel at the LA Games Conference, the expert panel talks about innovations in connected games. What does it mean to be connected? What are the big changes and what’s next? This is a continuation of our live blogging at the fifth panel from Digital Media Wire’s LA Games Conference 2008.

Panelists
Keive Huffman, SVP, Business Development & Sales, Championship Gaming Series
Robert Norton, VP, Business Development, King.com
Rob Uhrich, Senior Director, Digital Markets, PaymentOne
Brent Hurley, Strategic Partner Developments, YouTube
Jason Rubinstein, Senior Director, Entertainment, Mobile Devices, Motorola
Moderator: Jay Moore, Head of Special Ops, The Strategery Group

Jay asks What is connected gaming? What’s your perspective on what Connected Gaming is.

Jason: Connected gaming is a better experience. The ability to get it from your friends the ability to get it easily on your phone, and ulitimately how social networks connect with games.

Brent: Game developers can pull in relevant data to make the game better. If it’s raining outside, it could be raining in the game.

Rob: Connected relationships are what it’s all about. Usually my kids fight all the time. Seeing my kids working together on webkins shows the power of connected gaming. Strengthening current relationships and develop new relationships is an important part of connected gaming.

Robert: In all our games you are playing against other people. It’s about people vs. people. Helping them connect. The lobby system is the most important part of our site.

Kieve: We look at connected gaming as a huge part of what Championship Gaming Series is all about. We see a way for connecting a competitive gaming to main stream audience. Television is CGS’s primary distribution channel. The online element introduces a new element of interactivity. CGS just announced a YouTube channel.

Jay: What have been the big breakthroughs in the past year?

Robert: Figuring out pre-roll and post roll advertising has opened up free ad supported games. Another breakthrough is the social network sites that allow game developers to reach very large audiences.

Jason: VMK had to shut itself off due to unexpected success. Scrabulous is great. A couple of guys in India introduced something that ignited a lot of interest in casual gaming and it has a business model.

Kieve: It’s amazing how strong the communities are. Any time we run a tournament it’s a frenzy. Our traffic goes up 10x.

Robert: Scrabulous reinvented turn based games. The game had been around for a year before it went on Facebook. The social network allowed the game to become the marketing tool itself. By building in the right features, the engineering could drive the marketing of the game.

Jay: What’s been driving connectedness in the MMO space?

Kieve: We work with World of Warcraft. It’s been a lot of fun to work with them. They’ve created this immersive environment. The fun has been trying to mainstream this community by publicly broadcasting the game tournaments.

Jason: What’s not happening is MMO expansion into mobile. It doesn’t even have to be the game. There’s tremendous opportunity in mobile for applications like tools, utilities and teaser games.

Jay: Will the iPhone be disruptive?

Jason: The SDK and platform is not really open, so publishers should beware. Apple shattered some ceilings that only they may have been able to shatter. It still needs to achieve volume to be disruptive. Google’s open mobile is more likely to be disruptive.

Jay: What is the future of UGC games and mashups?

Brent: We want to encourage sharing of game video so people can share their in game experiences.

Robert: This is one of the most significant developments. Over the next 18 months, UGC around the game. The combination of community, games and flash skills set this up to grow. It opens gaming up to anyone with the right skills.

Kieve: One of the most popular things is sharing your best victory. Ode to Gamer Girl is one of the most popular videos around. It’s hard to beat this kind of marketing.

Kieve: Counterstrike is one of our most popular games. For the upcoming season, we are using a user generated map.

Jay: How will advertising play out?

Robert: Everyone is experimenting. Micro-transactions are the real revenue now. Advertising is the potential for real growth. Right now we’re experimenting with what works for users and how it impacts user’s interactions with the site and the games.

Jason: I side with the consumer. The consumers want free and they want quality. Diner Dash costs $20 for a download. On the mobile it costs $4-5. Consumers expect that games will be on the handset. Advertising could make this possible.

Rob: Advertising as a part of the business model continues to be a important part of the revenue mix. Game developers just need to be careful about how they integrate into advertising into the games.

Jay: What needs to change in the home?

Kieve: The technology in the US is getting better, but it still is not a great user experience. In Korea and China where they have the bandwidth, particularly in mobile, connected gaming is doing very well.

Rob: It needs to get much simpler.

Brent: Bandwidth into the home is the block for streaming high def into the home. So hitting the mainstream will take some time.

Jay: What categories will be disruptive in the next wave?

Jason: The companies that are positioned to do well are the big companies and the people who spin off from them and really understand the networks. Companies that are thinking about where the real numbers are and how to reach them with proven game mechanics can light up the mass markets.

Jay: What do you see happening next? What would like to see?

Kieve: True connectivity, that’s ubiquitous and that works.

Robert: The games that represent the cutting edge of content are teaching us about new things that work. Seeing these things move to other activities and applications is exciting.

Rob: The gaming market will become much more competitive.

Brent: Excitement about derivative works. It can be exciting to see and interact with the game and game play in different ways.

Jason: Open mobile networks. Fewer mobile operating systems. Super distribution - the ability for people to send media to friends get. Like to see US legalize online gambling.

Technorati Tags: LA Games Conference 2008, Connected Games, gaming

Cindy Cook, Chief Strategy and Marketing Officer of Vivendi Games is being interviewed by Geoff Keighley, producer of Spike TV’s GTTV at the LA Games Conference.

Geoff asks about the explosion of the music category. How do you work with the music companies?

Cindy says that the music business is actively looking for new outlets for their content. The interest level for music companies to be involved with games has reached a high point. First it was just background, then it became jukebox material, then artists became characters in the game, and then music became the game.

It’s been good to see the growth in sales of these games. We’ve also seen lots of growth of in game music purchases which is very exciting.

Geoff asks about movie games. The view is that movie games are rushed out and hard core gamers don’t really like them. The high mark was the Chronicle of Riddick. It seems that Vivendi is going back into the old movies, for example Scarface and Ghostbusters.

Cindy says they try to coordinate with release dates where they can. These are good opportunities. The problem is that it can take longer to make a good game than make a good movie. They wanted a way around this problem, so they researched the back catalogue. Scarface emerged as one property that could do well. For Ghostbusters, it’s one of the most familiar and popular movies. They were able to unite the original cast and it has unique game play.

For Scarface, they had huge popularity of the character and they were able to weave in contemporary hip hop theme. Ghostbusters was also familiar to the audience.

Geoff asks about The Bourne Conspiracy release. Cindy says they are immersed in a large scale marketing campaign. They see this as a mass market product so they are looking creatively at how to reach people. Two things they are doing that are unique. The first is cinema based ads. The ads are based on showing the motion capture technology and action sequences from the game. They will be shown at the opening of the new Indiana Jones movie. The other thing we did was to have the music composer, Paul Oakenfold, host a music conference and produce a music video for the game.

They will also have outdoor advertising and street teams that will help promote the game.

Geoff asks about how Vivendi approaches a Facebook or Myspace. Cindy says they go where the people are. For Scarface, they had a Myspace contest to determine music for the game. They also have a Scarface page on Myspace which has 400,000 friends.

Cindy also describes How Do I Survive High School. It’s a mobile game that connects to people. It’s episodic. People are attached to the game. 7.5 million packs have been downloaded for the game. They have promoted it in Facebook focusing on how to get the game on your mobile device.

Geoff asks about iPhone games. Will it be disruptive to the mobile market? Will it blow the market wide open? Cindy says that most mobile games have been crappy games. The iPhone has the ability to support much better games. It has the potential to be disruptive when the installed based gets bigger. The key is to get enough people with the phone to make it really big.

Cindy addresses a question about new virtual currency. She says that she wants to clarify that World of Warcraft continues to grow and that Blizzard is really focused on the player experience is.

Question: Will Blizzard allow digital object exchange? Blizzard has made it clear that they have decided not to do this. They are focusing on the player experience.

Question: What about iPhone games? Will Vivendi be delivering more games through the browser? She says the ability to download or access through the web is really exciting to Vivendi. It will be a matter of consumer choice how the get the games.

Technorati Tags: LA Games Conference 2008, Cindy Cook, Videndi Games, gaming

As part of our Super Fan series, we interviewed Dean Carignan. Dean is Director, Advertising Business Strategy for Microsoft’s Entertainment & Devices Division. In this role, he develops long-range strategic plans for investments in streaming video advertising, mobile marketing, and game-based advertising. Dean also spent several years with Microsoft’s adCenter group, where he drove product strategy for Paid Search, Display Ads, and Contextual Advertising.

Dean was able to provide us with some excellent perspective on these new advertising opportunities. He is part of a group that looks at opportunities to advertise via the Xbox, Media Center, Zune and mobile platforms. We go into depth on in game advertising and how important this new segment will be. He walked us through case studies of Domino’s Pizza and P&G that describe how a well designed campaign can add to the realism of the game experience and yield results for the advertiser.

This is a must listen podcast for advertisers who are struggling to break through on television and are looking for new ways to market their products using these rapidly growing platforms.

 

 Digital Podcast 37 [49:50m]: Play Now | Play in Popup | Download (729)

Technorati Tags: Dean Carignan, Microsoft, in game advertising, gaming, social media, super fans