Why are brands so interested in games?

Article kindly submitted by Endaf Kerfoot, organiser of Games for Brands conference

There’s a fantastic book by a British author, Tom Chatfield, which is essential reading for anyone interested in why it seems games are so high profile right now. What Tom does is place games in a cultural and historical context, right back to the emergence of video games, and explore the rise and rise of gaming as a media phenomenon.

And what a phenomenon that is. Some figures – 40% of Facebook users play social games – for a total of 300 million users, and growing fast. One in four gamers are 50 years old or above, and 48% are female – thus subverting decades of assumptions that male teens dominate this sector. Last year projections were made that by 2015 the virtual economy in the US alone would be worth $5 billion – figures that are sure to be revised ever higher as the social games and virtual world bonanza shows no sign of abating (http://www.pixelsandpolicy.com/pixels_and_policy/2010/01/virtual-economy-value.html)

So perhaps the initial question needs rephrasing. Perhaps we should instead be asking why it is that brands seem to be so reluctant to dive into the world of games with two feet. There are some well-trodden case studies, most from the US, about big brands that have partnered with Zynga on branded virtual goods inside that company’s games, and the ingame advertising market is estimated to be worth close to $1billion already. However, set against the $30 billion US online advertising market, this is sure to rise rapidly. Why? Because games are increasingly where media consumers (ie customers) are choosing to spend an ever-increasing amount of their time, and opportunities to reach customers via games are proliferating as specialised companies emerge to help you spend brands’ digital ad dollars, pounds and euros effectively inside games and virtual worlds.

Which is not to say that any of this is simple – far from it. A clunky ingame ad can alienate players, and be completely ineffective. Game creators remain broadly reluctant to reach out to brands and agencies, preferring to stick to their tried-and-tested monetisation channels direct from gamers. It’s clear that a company like Zynga with a large pool of players spending their own money has a more robust monetisation strategy than a company that relies on advertising, but even Zynga is seeing a more compressed cycle of explosive growth in users of new games, followed by steeper drop-offs in player numbers more rapidly.

To overcome this, enter stage left advergaming. This is where brands, agencies and content owners commission their own branded, proprietary games. Many companies now offer fantastic games content – and this is an area of particular strength in the UK, where TIGA, representing the UK games industry, has recently created a casual games committee to better serve the interests of studios doing work for hire. Examples include Matmi, 4T2, Kempt, Kerb, TAMBA, Koko Digital and Huzutech.

So, the decision would appear to be between integrating brand messaging into an existing game, and creating a branded game. However, there is another trend which is making waves, and its name is gamification. Many people hate the term, but it would appear to be here to stay. In essence, gamification is the application of game mechanics and principles of game design, harnessing the insight into player psychology garnered from decades of video game research, to marketing. The idea being, if you know how to push certain buttons to obtain certain results, which good game designers do, these learnings are applicable to other domains. Thus a website can incorporate elements like progress bars, status badges, achievement points and leaderboards to make users more engaged with the content on the site. Businesses with physical locations can turn visiting those businesses into a giant game, perhaps a treasure hunt based on Facebook Places or Foursquare. Loyalty programmes can evolve from rewarding members with free stuff to giving them virtual stuff at lower marginal (or opportunity) cost. People can be “nudged” into doing stuff by tinkering with the presentation of information, offers, price and product information – and the stats speak of a brave new world for gamification:

The corporate market for gamification is projected to grow from $100m in 2010 to $2.8b by 2016

By 2014 70% of corporates are expected to have adopted gamification

According to Gartner, 50% of corporate processes are expected to be gamified, with a vibrant market emerging to facilitate this.

One of the best commentaries on the implications of all this can be found on the Gamesbrief website, written by Nicholas Lovell:

http://www.gamesbrief.com/2011/06/gamification-advergaming-transmedia-the-gamesbrief-guide-to-marketing-and-games/

 

Further, Games for Brands are launching their conference of the same name in London on October 27th – www.gamesforbrands.com

 

On October 27th creative agencies, brands and content owners will have the opportunity to discover what opportunities await them in the games space. From ingame advertising and branded virtual goods, through advergames to gamification, this conference will explore all the avenues that organizations can explore to enhance customer and audience engagement using games, game mechanics and gamification.

The opening keynote will be Tom Chatfield, author of Fun, Inc. who will explore games as a cultural and media phenomenon and explain why it is that games became so massively significant in today’s media landscape.

Other presenters include:

Jeremy Waite, Head of Social Media, Phones4U

Joshua Saunders, Head of Technical and Creative, EMI

Ville Heijari, VP Franchise Development, Rovio

Nick Larder, Digital Director, Starcom MediaVest Group

Dr Jo Twist, Commissioning Editor, Education, Channel 4

Rupert Harris, Innovation executive – Digital Media Initiative, BBC

Mark Sage, Director of Loyalty, Carlson Marketing EMEA

Kam Star, Chief Play Office, PlayGen

Nicholas Lovell, Founder, Gamesbrief

Volker Hirsch, Director, Business Development, Research in Motion

Richard Bartle, legend of the games industry

 

Dedicated panels will explore ingame advertising and working with existing games publishers,  building your own branded game/advergame, learning from the success of leading games companies and gamification & harnessing game mechanics for customer acquisition, engagement and loyalty.

Registration is now open, and further details can be found at www.gamesforbrands.com

For readers of futu[re]dux you can gain a £50 off registration discount by quoting “tp50”

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