Monday, August 4, 2008

A Primer on Monetizing Social Games

My friend Peter Vogel, senior marketing at Memolink/CPA Storm recently (as is last month) wrote a very good summary of the techniques that social games are using to monetize. It even has some numbers. Mostly notably, is the claim that there's a few social game developers making over a million bucks a year. It's true. In the social games industry, it's an open secret. Some companies, Like Zynga, are making 1 million dollars a month, according to Roman Nouzareth, CEO of Boonty/ who heard it from a little birdie and is not an official number provided by Zynga (a statement he made during our panel discussion at Casual Connect - you should have been there).

Here's a snippet to whet your appetite.

Much more potent, though, is to use CPA offers to monetize an app’s virtual currency. This is the most inherently social of all of the models. Many apps have a virtual economies where users can earn and spend points (or other virtual currency). Users trade in the “points” to send a virtual piece of sushi to friend or “buy” a pink tutu for their virtual elephant on (fluff)Friends. Sometimes they just want to have the most “points” of all their friends. Developers have long used virtual economies to motivate users to perform viral actions like inviting friends to install the app, but CPA offers give users a chance to earn extra virtual currency. Users might complete a short survey, fill out a lead form, or even sign up for a service like Netflix. In exchange for completing an offer, they earn more of app’s virtual currency. Often times these interactions are real-time, so users can earn the virtual currency immediately, without even having to leave the app.