Dating Sites, Cell Phone Calls: Alternative Sources for Marketing Data
Marketers - the ones willing to experiment at least - are finding a treasure trove of data in some unorthodox sources. The most current example of this trend is a blog by the dating website OkCupid, called OKTrends, which has been dissecting its user information to reveal some interesting patterns – such as people who own iPhones have more sex than people with BlackBerrys. And that atheists have the highest writing proficiency of any religious or nonreligious group or Oregonians tend to be more gay-curious than other Americans. (via Newsweek).
"We've collected one of the largest, most thorough databases of human interaction ever, and I have to make sure that what I'm writing about maximizes that resource,” Christian Rudder, founder, tells Newsweek. “We try to explore stereotypes, especially ones you’ve never heard of." The list goes on: Rudder claims he can pull up the books 30-year-old bisexual Latina women from Michigan are reading or the political leanings of six-foot Indian-American males who play piano.
Cell Phone Records
Another untapped - but very rich - source of data can be found in most consumers' cell phone record'. Who calls who, for how long and via what device is all valuable data for marketers. Telenor, a carrier in Scandinavia, has been using this data to map out social connections between people - measured partly by how often they called each other. (via Technology Review). Now Telenor wants to take the insights it gleaned to use in marketing campaigns, Technology Review says, helping, for instance, a company that wants to send promotional text messages to people whose friends already use a product.
How Valuable?
Before marketers jump on such data though, it is worthwhile to ask how reliable it truly is. The OKTrends blog "is a fascinating source of data about people on OkCupid, but I am skeptical of many of the broader claims based on these data," says Andrew T. Fiore, a media expert at Michigan State University. (via Newsweek). "Claims like 'Oregonians tend to be more gay-curious than other Americans' are suspect … It is very unlikely that Oregonians who use OkCupid are a representative sample of all Oregonians."
Thursday, October 28, 2010
What Disney Got in the Playdom Acquisition
What Disney Got in the Playdom AcquisitionOctober 25th, 2010
By Chris Morrison 8 Comments » Share
In a new industry like social gaming, a single acquisition can have a disproportionate effect on the ecosystem. The buyout of a prominent company changes perceptions across the market, whether the price is high or low.
Disney’s July acquisition of Playdom has certainly had that effect, setting off a new round of speculation on some familiar themes: Is social gaming a real business, or a bubble? Has the industry produced viable companies? Is Playdom worth what Disney paid?
There’s no doubt that in Playdom’s case, the acquisition price raised some eyebrows. Disney paid $563.2 million, with the possibility of an additional $200 million earnout, for a company with (at the time) 40.1 million monthly and 4.8 million daily active users. Calculating by the full $763 million, that equates to $159 per DAU.
There are nuances to that number — like Playdom’s MySpace traffic, and other issues that we’ll discuss below — but by nearly any measurement, Disney paid handsomely for Playdom’s users.
When a large, established company buys a startup for a sizable amount, it’s usually said that they’re not just acquiring a company, they’re acquiring a “growth story”. This was not immediately evident in Playdom’s case.
When EA bought Playfish for $400 million last November, Playfish had just doubled from six million daily active users on Facebook in June of 2009, to 13 million at the time of acquisition.
By contrast, neither Playfish nor Playdom, not to mention Zynga, CrowdStar or RockYou, has shown much growth in 2010. Only companies that began 2010 small or not yet on Facebook have grown appreciably.
An AppData view of Playdom’s traffic in the six months before its acquisition shows a decline from a high of over seven million DAU in mid-April to around five million in late July, when it was acquired. Like its peers at the top of the social gaming world, with the increasing challenges of distribution on the Facebook Platform in 2010, Playdom had been growing revenues by improving its per paying user monetization metrics, we hear, which can’t be gauged as easily by outsiders.
Thus, many noted that Disney appeared to pay almost twice what Electronic Arts did, for a company with a smaller audience and without the same obvious traffic growth story.
What were Disney’s motivations in buying Playdom? Following the acquisition, relatively little fresh reporting went into the story. So we set out to dig a little deeper into Disney’s motivations, and the reality at Playdom at the time it was bought. What emerged were often very different perspectives from people who had relationships to Playdom prior to the acquisition.
On one side are the negative voices, drawing Playdom as a cynical con-man and Disney as the willing dupe. The alternate view is that Playdom was, like everyone else in the space, simply figuring out its strategy as it went, and that Disney made a well-considered choice for its own future.
Below, we deal with both of these two takes on the acquisition. One note: While we spoke to a number of sources for this story, including both industry onlookers and ex-Playdom employees, most of our sources asked to remain anonymous, citing potential repercussions in the tight-knit social gaming community.
Critical Views
Immediately following the acquisition, we heard some strongly-worded skepticism from a number of sources outside Playdom about the company. “Playdom’s only strategy was to grow and flip to a greater fool,” one prominent industry figure told us. Others offered more or less the same opinion.
The social game industry is, in many ways, a quite cynical place — an attitude perhaps carried over from 2009, when many companies grew from “fast follow” products that closely copied others and spammy viral techniques. Some executives that we spoke to seemed to feel that Playdom had crossed some kind of line in its strategy during that time, even by the loose standards of the social gaming world.
What did Playdom do that was so objectionable? In the view of the detractors, Playdom’s own acquisition strategy — it bought at least eight other companies over the same number of months — was intended to simply bulk up its traffic, without creating a viable long-term structure. In other words, Playdom was creating a bubble, and betting that it could sell itself before it popped.
One former employee said that this roll-up strategy was real. “We all talked about it internally, we all knew that was the reason that these companies were being bought, with some exceptions. We didn’t get Raph Koster [of Metaplace] for that reason. But all we were doing was driving up the value,” the employee told us.
Acclaim, which Playdom bought in May, was an example brought up by more than one source to illustrate how Playdom bought some companies for name cachet and reputation. Acclaim became famous in the 1990s for its association with titles and franchises like Batman Forever, Mortal Kombat, and WWF Wrestlemania, but by the time of Playdom’s acquisition it had been restarted under new management as a MMORPG maker. Playdom touted Acclaim’s 15 million registered users after the buy, but had quietly shut down all of its games by August.
While some of Playdom’s acquired companies appeared to quietly disappear into the organization, other far-flung studios played a disproportionate role in keeping Playdom viable through new game releases.
This year’s decline in Playdom’s traffic would have been far more severe without highly successful releases like Social City, which at one point accounted for a quarter of Playdom’s MAU. PushButton Labs, an experienced third-party developer not owned by Playdom, helped with that game.
Playdom’s other successful recent titles were also developed outside of its Mountain View headquarters. Verdonia, which grew quickly but harbored serious flaws that led to a later fall, was created by a previously-acquired company, Green Patch, also in Mountain View headquarters. Market Street, Playdom’s most successful game outside its city-building titles, was developed by the San Francisco office.
City of Wonder, however, was developed in Mountain View.
The fact that Playdom produced hits is laudable. But its biggest success rested on one studio outside of Mountain View. The headquarters in Mountain View employed over 300 people including executives and support staff, and was mostly focused on centralized functions and maintaining existing games developed last year – though it also produced new games like Treetopia and Fish Friends, which were built hastily and were criticized for relying heavily on copying concepts from other titles.
Employees had varying views of why Mountain View seemed to have a harder time producing good content. “There were a bunch of kids running the place who had never been in the game industry, never managed anything before, and suddenly they’re game producers and executive producers. Of course it was dysfunctional,” said one source.
Another early employee seemed to pin the blame on John Pleasants, the experienced CEO hired away from Electronic Arts in June of 2009, saying that the company felt like it was on course to rival Zynga until Pleasants came on. Afterwards, Zynga pulled ahead, while Pleasants was not as aggressive as he could have been.
Mountain View did more than just produce games — more on that below. But with Eugene doing so well, one might speculate that Disney could have simply picked out and bought an equivalent small, innovative studio for a fraction of the price it paid for Playdom, and built a strong social gaming business around that core.
Skeptics believe that Disney may have bought into a too-rosy story of Playdom, or that the acquisition team could have been pressured into buying an internally troubled, but externally much-admired industry leader by Disney executives who wanted to show shareholders that they were leading in a hot new industry.
The lack of other available companies of Playdom’s size may support these views. Zynga is too large, while CrowdStar has, according to conflicting reports, either rebuffed or been rejected by several suitors, or has other issues. For the moment, there aren’t any other companies with enough size to fit the bill.
And Disney clearly preferred a hot new market to its old standbys. Four days after buying Playdom, Disney sold off its Miramax movie production studio for $660 million, enough to cover the Playdom acquisition.
Disney’s Broader Focus
The view that Disney was duped is too simple to be credible — Disney executives had extended contact with Playdom in 2010, and had contacts in the industry who could inform them of any problems at Playdom.
Similarly, while a desire to look like it was paying attention to a hot trend could have contributed to the acquisition, it’s unlikely that a savvy CEO like Bob Iger, who also oversaw the acquisitions of Pixar and Marvel Entertainment, would buy a total dud.
A kinder – and possibly more accurate – view of the acquisition is that Disney was buying more than just Playdom’s traffic and a jumble of studios.
Two important, but little-discussed, strengths of Playdom suggest a basis for that view.
The first of those strengths is Playdom’s centralized infrastructure, which the company has “perfected” while testing both its successful and failed games.
Playdom has reportedly poured a significant portion of its revenue over the past year, possibly running into tens of millions of dollars, into the teams and tools behind its analytics and monetization platforms. As part of this, it has seen its revenues grow significantly in the past year, we’ve heard, especially in proportion to its traffic.
While Disney no doubt appreciated revenue growth, the more important part is how that revenue grew.
Understanding user metrics and behavior (and knowing which metrics are the right ones to understand) is a key part of the social game business that many companies, both small and large, have failed to fully appreciate. While Disney may not have acquired the most innovative game production studios overall, it did acquire systems and understanding that could give it a competitive edge for years to come.
A senior Disney executive that we spoke with confirmed that Playdom’s analytics ability played a significant role in the acquisition, saying that Disney is using Playdom’s expertise in analytics outside of social gaming. “These are skills that are applicable across our gaming platforms and are already proving incredibly valuable to us,” the executive said.
A second, related strength is Playdom’s understanding of other game publishing platforms and users around the world. Playdom has been the first US-based social game company to enter into relationships with publishers like Russia’s i-Jet and Brazil’s Mentez, and its has published games on Hi5, MySpace, the iPhone, Android and other platforms. It has had third-party studios like Moblyng work on its mobile titles.
Creating a worldwide network was always part of Playdom’s plan, according to Tim Chang, the principal at Norwest Venture Partners who led an investment in the company last year. “That was something they were always intending, building out third party tools and doing cross-promotion. They’re very partner-friendly, an easy shop to talk partnerships with, and that also made it a good DNA fit for Disney, because Disney’s goal is to put their catalog of branded IP into social gaming,” Chang told us.
Disney’s goals, as seen from the outside, do seem to value Playdom’s infrastructure and organizational knowledge over its track record as a collection of studios. Since the acquisition, Disney has been moving the company toward producing branded content from Disney’s many other subsidiaries, as Bob Iger hinted in Disney’s post-acquisition earnings call.
Sources say that both Disney and Playdom are even more aggressive about this strategy than has been publicly admitted. Following the acquisition, some of Playdom’s in-progress titles were reportedly canceled, in favor of focusing on Disney-branded games. Playdom’s only release since the acquisition is ESPNU College Town, which supports Disney’s ESPN sports subsidiary, although we’re told it was in production before the buyout.
Although Playdom may release unbranded games in the future, it also makes the most sense for Disney, a very international company, to focus on spreading its existing, successful IP around the world.
Playdom Today and Tomorrow
Supporters of Disney might also point out that the company has done well with other acquisitions — especially Pixar, the innovative studio whose sale gave Steve Jobs a board seat and chunk of Disney stock.
Pixar may be a unique case: the company has proven time and again that its own unique vision and technology are unparalleled. Too much rode on the $7.4 billion Pixar deal for Disney to risk letting its executives meddle; Pixar was thus able to assert its independence early on and has reportedly kept it since.
Playdom, by contrast, has a creative heritage that differs little from other top social gaming companies. Internal restructuring may fix Mountain View. But the real question is whether Disney itself can do a good job at gaming.
History suggests that will be a challenge. In two decades of producing titles based on major franchises and characters like Mickey Mouse, Disney has had hit or miss success, and in recent years has lost money at its Interactive Media Group.
However, there’s some sign that Disney may want to reboot its gaming division. In October, Disney put Playdom CEO John Pleasants ahead of Steve Wadsworth as co-president of Disney Interactive, with responsibility over all gaming.
Disney has reason to refocus its digital business for the sake of social gaming. It has a large portfolio of content that users love, that appears to be a great fit with the free-to-play virtual goods model that drives most social gaming revenue. In addition to movie tickets, real-world merchandise, television distribution rights, and every other way of monetizing its content, it now can create themed games that include virtual goods — essentially creating an entirely new revenue stream around pre-existing content.
Pleasants, who was once chief operating officer at Electronic Arts, is an experienced core gaming executive. As we noted above, not everyone is confident in his talents, but he mostly gets positive reviews in the social game industry.
And Playdom may be able to grow without the rest of the world seeing exactly what’s happening. With per-user revenues already rising, Disney may be able to further accelerate revenue growth with its own entertainment expertise. Playdom’s 40 million MAU can also help push traffic to other Disney properties outside of gaming.
As for Playdom’s lower-level employees, we’re told that many are now considering their options elsewhere, in part driven by the desire to work for agile startups over a major corporation. “I don’t think they’re any longer vested in Playdom as an organization,” a recruiter who has worked with many current Playdom employees told us, while smaller companies also said they’re interviewing numerous people from Playdom. It will be up to Disney to prove that it can rival Silicon Valley’s pull for existing and future workers.
Conclusion
Playdom grew, and then sold, at a time when companies could be successful despite internal challenges and an unfocused acquisition strategy. Despite those facts, it’s also worth pointing out that the company survived its early encounters with Zynga and stayed viable through much of 2010. At one point, Playdom even reportedly had ambitions toward a big IPO.
The market has tightened considerably this year, however. Playdom, like other companies, likely had neither a perfect plan or an internal conspiracy to dupe a larger acquirer. Instead, the company figured out its strategy as it moved, and ended up falling short of a perfect performance. While Disney’s price was considered high by some, later Playdom investors likely didn’t profit much by the sale.
And yet, following its short and tumultuous history, Playdom could now become an important part of how Disney distributes and monetizes content, and possibly help the rest of the company improve its understanding of how to do business on the web.
By Chris Morrison 8 Comments » Share
In a new industry like social gaming, a single acquisition can have a disproportionate effect on the ecosystem. The buyout of a prominent company changes perceptions across the market, whether the price is high or low.
Disney’s July acquisition of Playdom has certainly had that effect, setting off a new round of speculation on some familiar themes: Is social gaming a real business, or a bubble? Has the industry produced viable companies? Is Playdom worth what Disney paid?
There’s no doubt that in Playdom’s case, the acquisition price raised some eyebrows. Disney paid $563.2 million, with the possibility of an additional $200 million earnout, for a company with (at the time) 40.1 million monthly and 4.8 million daily active users. Calculating by the full $763 million, that equates to $159 per DAU.
There are nuances to that number — like Playdom’s MySpace traffic, and other issues that we’ll discuss below — but by nearly any measurement, Disney paid handsomely for Playdom’s users.
When a large, established company buys a startup for a sizable amount, it’s usually said that they’re not just acquiring a company, they’re acquiring a “growth story”. This was not immediately evident in Playdom’s case.
When EA bought Playfish for $400 million last November, Playfish had just doubled from six million daily active users on Facebook in June of 2009, to 13 million at the time of acquisition.
By contrast, neither Playfish nor Playdom, not to mention Zynga, CrowdStar or RockYou, has shown much growth in 2010. Only companies that began 2010 small or not yet on Facebook have grown appreciably.
An AppData view of Playdom’s traffic in the six months before its acquisition shows a decline from a high of over seven million DAU in mid-April to around five million in late July, when it was acquired. Like its peers at the top of the social gaming world, with the increasing challenges of distribution on the Facebook Platform in 2010, Playdom had been growing revenues by improving its per paying user monetization metrics, we hear, which can’t be gauged as easily by outsiders.
Thus, many noted that Disney appeared to pay almost twice what Electronic Arts did, for a company with a smaller audience and without the same obvious traffic growth story.
What were Disney’s motivations in buying Playdom? Following the acquisition, relatively little fresh reporting went into the story. So we set out to dig a little deeper into Disney’s motivations, and the reality at Playdom at the time it was bought. What emerged were often very different perspectives from people who had relationships to Playdom prior to the acquisition.
On one side are the negative voices, drawing Playdom as a cynical con-man and Disney as the willing dupe. The alternate view is that Playdom was, like everyone else in the space, simply figuring out its strategy as it went, and that Disney made a well-considered choice for its own future.
Below, we deal with both of these two takes on the acquisition. One note: While we spoke to a number of sources for this story, including both industry onlookers and ex-Playdom employees, most of our sources asked to remain anonymous, citing potential repercussions in the tight-knit social gaming community.
Critical Views
Immediately following the acquisition, we heard some strongly-worded skepticism from a number of sources outside Playdom about the company. “Playdom’s only strategy was to grow and flip to a greater fool,” one prominent industry figure told us. Others offered more or less the same opinion.
The social game industry is, in many ways, a quite cynical place — an attitude perhaps carried over from 2009, when many companies grew from “fast follow” products that closely copied others and spammy viral techniques. Some executives that we spoke to seemed to feel that Playdom had crossed some kind of line in its strategy during that time, even by the loose standards of the social gaming world.
What did Playdom do that was so objectionable? In the view of the detractors, Playdom’s own acquisition strategy — it bought at least eight other companies over the same number of months — was intended to simply bulk up its traffic, without creating a viable long-term structure. In other words, Playdom was creating a bubble, and betting that it could sell itself before it popped.
One former employee said that this roll-up strategy was real. “We all talked about it internally, we all knew that was the reason that these companies were being bought, with some exceptions. We didn’t get Raph Koster [of Metaplace] for that reason. But all we were doing was driving up the value,” the employee told us.
Acclaim, which Playdom bought in May, was an example brought up by more than one source to illustrate how Playdom bought some companies for name cachet and reputation. Acclaim became famous in the 1990s for its association with titles and franchises like Batman Forever, Mortal Kombat, and WWF Wrestlemania, but by the time of Playdom’s acquisition it had been restarted under new management as a MMORPG maker. Playdom touted Acclaim’s 15 million registered users after the buy, but had quietly shut down all of its games by August.
While some of Playdom’s acquired companies appeared to quietly disappear into the organization, other far-flung studios played a disproportionate role in keeping Playdom viable through new game releases.
This year’s decline in Playdom’s traffic would have been far more severe without highly successful releases like Social City, which at one point accounted for a quarter of Playdom’s MAU. PushButton Labs, an experienced third-party developer not owned by Playdom, helped with that game.
Playdom’s other successful recent titles were also developed outside of its Mountain View headquarters. Verdonia, which grew quickly but harbored serious flaws that led to a later fall, was created by a previously-acquired company, Green Patch, also in Mountain View headquarters. Market Street, Playdom’s most successful game outside its city-building titles, was developed by the San Francisco office.
City of Wonder, however, was developed in Mountain View.
The fact that Playdom produced hits is laudable. But its biggest success rested on one studio outside of Mountain View. The headquarters in Mountain View employed over 300 people including executives and support staff, and was mostly focused on centralized functions and maintaining existing games developed last year – though it also produced new games like Treetopia and Fish Friends, which were built hastily and were criticized for relying heavily on copying concepts from other titles.
Employees had varying views of why Mountain View seemed to have a harder time producing good content. “There were a bunch of kids running the place who had never been in the game industry, never managed anything before, and suddenly they’re game producers and executive producers. Of course it was dysfunctional,” said one source.
Another early employee seemed to pin the blame on John Pleasants, the experienced CEO hired away from Electronic Arts in June of 2009, saying that the company felt like it was on course to rival Zynga until Pleasants came on. Afterwards, Zynga pulled ahead, while Pleasants was not as aggressive as he could have been.
Mountain View did more than just produce games — more on that below. But with Eugene doing so well, one might speculate that Disney could have simply picked out and bought an equivalent small, innovative studio for a fraction of the price it paid for Playdom, and built a strong social gaming business around that core.
Skeptics believe that Disney may have bought into a too-rosy story of Playdom, or that the acquisition team could have been pressured into buying an internally troubled, but externally much-admired industry leader by Disney executives who wanted to show shareholders that they were leading in a hot new industry.
The lack of other available companies of Playdom’s size may support these views. Zynga is too large, while CrowdStar has, according to conflicting reports, either rebuffed or been rejected by several suitors, or has other issues. For the moment, there aren’t any other companies with enough size to fit the bill.
And Disney clearly preferred a hot new market to its old standbys. Four days after buying Playdom, Disney sold off its Miramax movie production studio for $660 million, enough to cover the Playdom acquisition.
Disney’s Broader Focus
The view that Disney was duped is too simple to be credible — Disney executives had extended contact with Playdom in 2010, and had contacts in the industry who could inform them of any problems at Playdom.
Similarly, while a desire to look like it was paying attention to a hot trend could have contributed to the acquisition, it’s unlikely that a savvy CEO like Bob Iger, who also oversaw the acquisitions of Pixar and Marvel Entertainment, would buy a total dud.
A kinder – and possibly more accurate – view of the acquisition is that Disney was buying more than just Playdom’s traffic and a jumble of studios.
Two important, but little-discussed, strengths of Playdom suggest a basis for that view.
The first of those strengths is Playdom’s centralized infrastructure, which the company has “perfected” while testing both its successful and failed games.
Playdom has reportedly poured a significant portion of its revenue over the past year, possibly running into tens of millions of dollars, into the teams and tools behind its analytics and monetization platforms. As part of this, it has seen its revenues grow significantly in the past year, we’ve heard, especially in proportion to its traffic.
While Disney no doubt appreciated revenue growth, the more important part is how that revenue grew.
Understanding user metrics and behavior (and knowing which metrics are the right ones to understand) is a key part of the social game business that many companies, both small and large, have failed to fully appreciate. While Disney may not have acquired the most innovative game production studios overall, it did acquire systems and understanding that could give it a competitive edge for years to come.
A senior Disney executive that we spoke with confirmed that Playdom’s analytics ability played a significant role in the acquisition, saying that Disney is using Playdom’s expertise in analytics outside of social gaming. “These are skills that are applicable across our gaming platforms and are already proving incredibly valuable to us,” the executive said.
A second, related strength is Playdom’s understanding of other game publishing platforms and users around the world. Playdom has been the first US-based social game company to enter into relationships with publishers like Russia’s i-Jet and Brazil’s Mentez, and its has published games on Hi5, MySpace, the iPhone, Android and other platforms. It has had third-party studios like Moblyng work on its mobile titles.
Creating a worldwide network was always part of Playdom’s plan, according to Tim Chang, the principal at Norwest Venture Partners who led an investment in the company last year. “That was something they were always intending, building out third party tools and doing cross-promotion. They’re very partner-friendly, an easy shop to talk partnerships with, and that also made it a good DNA fit for Disney, because Disney’s goal is to put their catalog of branded IP into social gaming,” Chang told us.
Disney’s goals, as seen from the outside, do seem to value Playdom’s infrastructure and organizational knowledge over its track record as a collection of studios. Since the acquisition, Disney has been moving the company toward producing branded content from Disney’s many other subsidiaries, as Bob Iger hinted in Disney’s post-acquisition earnings call.
Sources say that both Disney and Playdom are even more aggressive about this strategy than has been publicly admitted. Following the acquisition, some of Playdom’s in-progress titles were reportedly canceled, in favor of focusing on Disney-branded games. Playdom’s only release since the acquisition is ESPNU College Town, which supports Disney’s ESPN sports subsidiary, although we’re told it was in production before the buyout.
Although Playdom may release unbranded games in the future, it also makes the most sense for Disney, a very international company, to focus on spreading its existing, successful IP around the world.
Playdom Today and Tomorrow
Supporters of Disney might also point out that the company has done well with other acquisitions — especially Pixar, the innovative studio whose sale gave Steve Jobs a board seat and chunk of Disney stock.
Pixar may be a unique case: the company has proven time and again that its own unique vision and technology are unparalleled. Too much rode on the $7.4 billion Pixar deal for Disney to risk letting its executives meddle; Pixar was thus able to assert its independence early on and has reportedly kept it since.
Playdom, by contrast, has a creative heritage that differs little from other top social gaming companies. Internal restructuring may fix Mountain View. But the real question is whether Disney itself can do a good job at gaming.
History suggests that will be a challenge. In two decades of producing titles based on major franchises and characters like Mickey Mouse, Disney has had hit or miss success, and in recent years has lost money at its Interactive Media Group.
However, there’s some sign that Disney may want to reboot its gaming division. In October, Disney put Playdom CEO John Pleasants ahead of Steve Wadsworth as co-president of Disney Interactive, with responsibility over all gaming.
Disney has reason to refocus its digital business for the sake of social gaming. It has a large portfolio of content that users love, that appears to be a great fit with the free-to-play virtual goods model that drives most social gaming revenue. In addition to movie tickets, real-world merchandise, television distribution rights, and every other way of monetizing its content, it now can create themed games that include virtual goods — essentially creating an entirely new revenue stream around pre-existing content.
Pleasants, who was once chief operating officer at Electronic Arts, is an experienced core gaming executive. As we noted above, not everyone is confident in his talents, but he mostly gets positive reviews in the social game industry.
And Playdom may be able to grow without the rest of the world seeing exactly what’s happening. With per-user revenues already rising, Disney may be able to further accelerate revenue growth with its own entertainment expertise. Playdom’s 40 million MAU can also help push traffic to other Disney properties outside of gaming.
As for Playdom’s lower-level employees, we’re told that many are now considering their options elsewhere, in part driven by the desire to work for agile startups over a major corporation. “I don’t think they’re any longer vested in Playdom as an organization,” a recruiter who has worked with many current Playdom employees told us, while smaller companies also said they’re interviewing numerous people from Playdom. It will be up to Disney to prove that it can rival Silicon Valley’s pull for existing and future workers.
Conclusion
Playdom grew, and then sold, at a time when companies could be successful despite internal challenges and an unfocused acquisition strategy. Despite those facts, it’s also worth pointing out that the company survived its early encounters with Zynga and stayed viable through much of 2010. At one point, Playdom even reportedly had ambitions toward a big IPO.
The market has tightened considerably this year, however. Playdom, like other companies, likely had neither a perfect plan or an internal conspiracy to dupe a larger acquirer. Instead, the company figured out its strategy as it moved, and ended up falling short of a perfect performance. While Disney’s price was considered high by some, later Playdom investors likely didn’t profit much by the sale.
And yet, following its short and tumultuous history, Playdom could now become an important part of how Disney distributes and monetizes content, and possibly help the rest of the company improve its understanding of how to do business on the web.
Lifetime Bows New Series with 2D Barcode Campaign
Lifetime Bows New Series with 2D Barcode Campaign
Published on October 26, 2010Share .Lifetime Television is embarking on a mobile marketing campaign to promote the launch of a new unscripted series, The Fairy Jobmother, using 2D barcode advertising. The campaign is the first time so-called Jagtags will be used in a television commercial.
Viewers can take a picture of the Jagtag with their mobile phones, and then receive videos from career specialist Hayley Taylor with how-to tips for using social networking during the job search. Users can also opt-in for future tune-in reminders.
The Jagtags are also being incorporated in print materials including US Weekly, People, and Metro NY, and on websites like NYPost.com. The Lifetime Jagtags will also appear in New York City subways and bus shelters, and mall dioramas in New York, Los Angeles, Chicago, Philadelphia and Atlanta.
The multichannel campaign enables Lifetime to introduce the new show through exclusive video content, and “provides a platform to reinforce the premiere through tune-in reminders,” says Alex Ignon, vp of media and consumer promotions at Lifetime Television.
Jagtag does not require an application download and works instantly on all camera phones and carriers in the U.S., to reach more than 90 percent of mobile users. The Lifetime campaign will run through November 2010.
The Fairy Jobmother follows Hayley Taylor as she helps the “severely job-challenged” get back on the payroll. A sneak peek at the first episode will air on Oct. 28 following the season 8 finale of Project Runway.
Published on October 26, 2010Share .Lifetime Television is embarking on a mobile marketing campaign to promote the launch of a new unscripted series, The Fairy Jobmother, using 2D barcode advertising. The campaign is the first time so-called Jagtags will be used in a television commercial.
Viewers can take a picture of the Jagtag with their mobile phones, and then receive videos from career specialist Hayley Taylor with how-to tips for using social networking during the job search. Users can also opt-in for future tune-in reminders.
The Jagtags are also being incorporated in print materials including US Weekly, People, and Metro NY, and on websites like NYPost.com. The Lifetime Jagtags will also appear in New York City subways and bus shelters, and mall dioramas in New York, Los Angeles, Chicago, Philadelphia and Atlanta.
The multichannel campaign enables Lifetime to introduce the new show through exclusive video content, and “provides a platform to reinforce the premiere through tune-in reminders,” says Alex Ignon, vp of media and consumer promotions at Lifetime Television.
Jagtag does not require an application download and works instantly on all camera phones and carriers in the U.S., to reach more than 90 percent of mobile users. The Lifetime campaign will run through November 2010.
The Fairy Jobmother follows Hayley Taylor as she helps the “severely job-challenged” get back on the payroll. A sneak peek at the first episode will air on Oct. 28 following the season 8 finale of Project Runway.
Thursday, October 14, 2010
5 rules for integrating ads into social games
5 rules for integrating ads into social games
By Pauline Malcolm-John
5 rules for integrating ads into social games
With 56.8 million consumers, or 20 percent of the U.S. population, playing social games (NPD Group), marketers need to have a social game strategy. Unfortunately, most marketers don't know how to successfully integrate their brand message into this incredibly dynamic and personal space. While engaging consumers through social games and turning them into passionate brand advocates is possible, there are certain rules to live by.
Get connected. Want to gain more insight into the future of digital marketing? Attend ad:tech New York, Nov. 3-4. Learn more.
In this article, we'll take a look at those rules: Adhering to them will allow marketers to leapfrog the norms of standard media and deliver far more effective, and measureable, social campaigns.
Rule #1: Make it relevant
Connect your ad to the audience in meaningful ways by offering content delivered within the context of the social game. Relevant integration within social gaming drives more traffic to the marketer's website and builds more loyalty than standard banner campaigns.
For example, when Bing advertised in FarmVille, it made the call-to-action relevant to the game's players in two ways: First, it placed sponsored ads in the game directing users to become fans of Bing's Facebook page, mentioning that, "Whether you want to buy a horse or a tree, Bing can help you decide!"; secondly, Bing awarded FarmVille virtual currency to players who became fans of Bing on Facebook. The result? Microsoft gained 400,000 Facebook fans in one day.
Bing was then able to use its Facebook status updates to drive search on Bing. "Any FarmVille fans out there? Try using Bing to get the most out of your crops and animals." By linking that post to Bing search results for "farmville animals," players were encouraged to use Bing instead of Google. And because most Bing Facebook fans that day came in through FarmVille, the update was heavily commented and "liked," increasing viral reach.
Rule #2: Add value
Provide social, competitive and/or game currency benefits. Adding value within social gaming provides far more brand exposure -- as well as deeper and more meaningful loyalty -- than trying to force traditional means into a social environment.
Social games require players to work to achieve benefits. Players "win" by outfitting their avatar or space with items that express their personalities. Before players can acquire their desired virtual goods or achievements, they either have to play the game at length to earn currency, or use real cash to purchase items.
In this context, advertisers get to be the hero, offering virtual goods for free or providing a competitive edge within the social game. The brand or property that provides items that are creative, popular, or attractive enough to spur user interest also "wins" by engaging consumers to opt-in as brand ambassadors.
For example, when organic brand Cascadian Farm teamed up with Zynga to become the first-ever branded crop on FarmVille, they provided a range of bonus benefits to players. In addition to providing the opportunity to quickly enhance their farms, players received coupon offers, as well as organic farming and green living tips. During the week-long partnership, branded Cascadian Farm organic blueberry crops was the most profitable FarmVille crop offered in the game, to beginner and expert FarmVille players.
Rule #3: Give choices, but never interrupt
The user did not show up to see your ad. Make ads a part of the experiences that they have already chosen to participate in, and let them choose to engage. By providing compelling choices, marketers can achieve rates of engagement that are never possible with standard media.
For instance, a recent anti-smoking campaign by Truth (American Legacy Foundation) let WeeWorld users choose to engage by completing a quest or taking a quiz. By doing so, the users earned goods, currency and trophies (the elements they most desire within social game.). In addition, these activities provided entertainment without getting in the way of what users had logged into the site to do in the first place -- express themselves and chat with friends. By following the rules, Truth generated 236 million viral impressions in two months, engaged users to complete 26,000 quests and download 607,000 virtual goods.
Rule #4: Create a dialog
Layer new elements into the experience over time to generate continued campaign momentum and build the conversation with consumers. Engaging in a two- to three-month experience that creates a deep conversation is far more effective than a single event that ends the conversation before it really starts.
Social games don't have a defined start and end -- they are ongoing, looping conversations and activities. To be effective, advertisers need an active presence in that flow. For instance, Skintimate first launched with five auras representing Skintimate scents, then added background changes on the WeeMee home page so users noticed the campaign all over again. By the time the custom virtual film studio with avatar bots delivering automatic messages like "I'm strawberry tangerine!" launched in phase three, the users knew what it meant and new conversations could start. In addition, the Truth campaign prolonged their dialog through a two-part quest and a custom Shards of Glass factory in World -- an effective dialog-starter about the dangers of smoking.
Rule #5: Perpetuate goodwill
Give. Then give some more. Then enjoy the thanks.
There is a lot of giving in social games. Instead of advertising being foisted on consumers, they experience "ads" as welcome gifts and experiences. As the brand gives, they are thanked again and again not only with increased engagement, but also through actual thanks.
For example, Partnership for a Drug Free America grounded its recent campaign on WeeWorld in the form of a real teen spokesperson, JT. As a recovering teen drug addict, JT used Q&A, commentary, quests and video to deliver his story without preaching to the audience. He also posed a scenario each week where a teen would have to make a choice about drugs or alcohol. Users e-mailed him their responses. PDFA tripled brand awareness in just three months, but even more interesting is the fact that JT received loads of direct input from users and got impassioned thank you notes for helping them.
WeeWorld receives personal thank you notes from users for many of the brands that we bring them. These are not consumers being bombarded with ads, these are thankful and engaged members of a community looking for new surprises and opportunities each week.
Follow the rules, reap the rewards
Knowing the rules and putting them into action are two different things. It is much easier to slap a traditional banner ad on a social gaming site and cross your fingers that it drives interest. However, if you take the time to work with a knowledgeable partner and implement a multi-phase, relevant campaign integrated into the true experience and personality of the game itself, you can not only engage consumers but also create powerful and passionate brand ambassadors. How you play the social game is up to you.
By Pauline Malcolm-John
5 rules for integrating ads into social games
With 56.8 million consumers, or 20 percent of the U.S. population, playing social games (NPD Group), marketers need to have a social game strategy. Unfortunately, most marketers don't know how to successfully integrate their brand message into this incredibly dynamic and personal space. While engaging consumers through social games and turning them into passionate brand advocates is possible, there are certain rules to live by.
Get connected. Want to gain more insight into the future of digital marketing? Attend ad:tech New York, Nov. 3-4. Learn more.
In this article, we'll take a look at those rules: Adhering to them will allow marketers to leapfrog the norms of standard media and deliver far more effective, and measureable, social campaigns.
Rule #1: Make it relevant
Connect your ad to the audience in meaningful ways by offering content delivered within the context of the social game. Relevant integration within social gaming drives more traffic to the marketer's website and builds more loyalty than standard banner campaigns.
For example, when Bing advertised in FarmVille, it made the call-to-action relevant to the game's players in two ways: First, it placed sponsored ads in the game directing users to become fans of Bing's Facebook page, mentioning that, "Whether you want to buy a horse or a tree, Bing can help you decide!"; secondly, Bing awarded FarmVille virtual currency to players who became fans of Bing on Facebook. The result? Microsoft gained 400,000 Facebook fans in one day.
Bing was then able to use its Facebook status updates to drive search on Bing. "Any FarmVille fans out there? Try using Bing to get the most out of your crops and animals." By linking that post to Bing search results for "farmville animals," players were encouraged to use Bing instead of Google. And because most Bing Facebook fans that day came in through FarmVille, the update was heavily commented and "liked," increasing viral reach.
Rule #2: Add value
Provide social, competitive and/or game currency benefits. Adding value within social gaming provides far more brand exposure -- as well as deeper and more meaningful loyalty -- than trying to force traditional means into a social environment.
Social games require players to work to achieve benefits. Players "win" by outfitting their avatar or space with items that express their personalities. Before players can acquire their desired virtual goods or achievements, they either have to play the game at length to earn currency, or use real cash to purchase items.
In this context, advertisers get to be the hero, offering virtual goods for free or providing a competitive edge within the social game. The brand or property that provides items that are creative, popular, or attractive enough to spur user interest also "wins" by engaging consumers to opt-in as brand ambassadors.
For example, when organic brand Cascadian Farm teamed up with Zynga to become the first-ever branded crop on FarmVille, they provided a range of bonus benefits to players. In addition to providing the opportunity to quickly enhance their farms, players received coupon offers, as well as organic farming and green living tips. During the week-long partnership, branded Cascadian Farm organic blueberry crops was the most profitable FarmVille crop offered in the game, to beginner and expert FarmVille players.
Rule #3: Give choices, but never interrupt
The user did not show up to see your ad. Make ads a part of the experiences that they have already chosen to participate in, and let them choose to engage. By providing compelling choices, marketers can achieve rates of engagement that are never possible with standard media.
For instance, a recent anti-smoking campaign by Truth (American Legacy Foundation) let WeeWorld users choose to engage by completing a quest or taking a quiz. By doing so, the users earned goods, currency and trophies (the elements they most desire within social game.). In addition, these activities provided entertainment without getting in the way of what users had logged into the site to do in the first place -- express themselves and chat with friends. By following the rules, Truth generated 236 million viral impressions in two months, engaged users to complete 26,000 quests and download 607,000 virtual goods.
Rule #4: Create a dialog
Layer new elements into the experience over time to generate continued campaign momentum and build the conversation with consumers. Engaging in a two- to three-month experience that creates a deep conversation is far more effective than a single event that ends the conversation before it really starts.
Social games don't have a defined start and end -- they are ongoing, looping conversations and activities. To be effective, advertisers need an active presence in that flow. For instance, Skintimate first launched with five auras representing Skintimate scents, then added background changes on the WeeMee home page so users noticed the campaign all over again. By the time the custom virtual film studio with avatar bots delivering automatic messages like "I'm strawberry tangerine!" launched in phase three, the users knew what it meant and new conversations could start. In addition, the Truth campaign prolonged their dialog through a two-part quest and a custom Shards of Glass factory in World -- an effective dialog-starter about the dangers of smoking.
Rule #5: Perpetuate goodwill
Give. Then give some more. Then enjoy the thanks.
There is a lot of giving in social games. Instead of advertising being foisted on consumers, they experience "ads" as welcome gifts and experiences. As the brand gives, they are thanked again and again not only with increased engagement, but also through actual thanks.
For example, Partnership for a Drug Free America grounded its recent campaign on WeeWorld in the form of a real teen spokesperson, JT. As a recovering teen drug addict, JT used Q&A, commentary, quests and video to deliver his story without preaching to the audience. He also posed a scenario each week where a teen would have to make a choice about drugs or alcohol. Users e-mailed him their responses. PDFA tripled brand awareness in just three months, but even more interesting is the fact that JT received loads of direct input from users and got impassioned thank you notes for helping them.
WeeWorld receives personal thank you notes from users for many of the brands that we bring them. These are not consumers being bombarded with ads, these are thankful and engaged members of a community looking for new surprises and opportunities each week.
Follow the rules, reap the rewards
Knowing the rules and putting them into action are two different things. It is much easier to slap a traditional banner ad on a social gaming site and cross your fingers that it drives interest. However, if you take the time to work with a knowledgeable partner and implement a multi-phase, relevant campaign integrated into the true experience and personality of the game itself, you can not only engage consumers but also create powerful and passionate brand ambassadors. How you play the social game is up to you.
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