Social Gaming: A Digital Advertising Game Changer

  • Posted by Steve Goldberg
  • |
  • January 29, 2011

Nearly 62 million US internet users, or 27% of the online audience, will play at least one game on a social network monthly this year.  That kind of traffic and engagement has helped to build online social gaming revenue to a whopping $1.09 billion.

That’s the total amount of revenue, according to eMarketer, expected to be earned this year, with another $230 million in revenue expected for 2012.  To state the obvious, casual gaming activity through social media platforms has been increasing steadily for the past few years, and projections for the future indicate a continuation of this growth.

While the experience of “life on the farm” is offered by Zynga’s FarmVille, games such as these present an abundance of opportunity for advertising, lead generation and the sale of virtual goods.  Out of the $1.09 billion in ad revenues from social games, nearly 60% ($700 million) of that money earned will be from virtual goods, 26% from lead generation offers, and 14% from advertisements alone.

C  Documents and Settings Steve My Documents My Pictures Image   emarketer social gaming 2010 2012 resized 600

The advertising implications trend towards advertisers shifting more of their efforts and dollars to the social gaming online space. And, within the social gaming channels, ad spending is surpassing lead generation offers as marketers use games for more branding-oriented efforts.  For example, on Facebook you can find Trident’s “White Puzzle Smash” developed by Funtank.  It is a great example of a branded social game, whereby you are encouraged to go beyond yourself and share the game with others (extra points are earned by playing with your friends).

Smaller companies or those with smaller budgets have access to social gaming as a channel, and have more leverage to compete with the giants because they can still reach a large audience for less cost overall, and hopefully a better return. TakePopSugar’s Retail Therapy game-allows players to merchandise and design their own fashion boutiques, letting them dress characters in the hottest styles and brands, and they can purchase those products in real life. Small designer brands like Geren Ford can now spend $10K to gain exposure and hopefully sales, opposed to $50K for a small ad buy in a magazine (and this reaches a greater audience).