News & Blog

Location-enabled gaming is quickly getting traction and leading mobile game developers and publishers are choosing CloudMade as their location partner. This week, at Casual Connect Europe in Hamburg, CloudMade will give the European game developer community a chance to take a closer look at location in games and learn how it can be used to drive gameplay and monetization.

Christian Petersen, our VP Community, will be giving a talk on Day 2 of the conference about how location features help address the two biggest challenges most game developers face – increasing the user engagement and maximizing revenue. During his session the attending developers will learn why location goes far beyond games with maps and how it can be used in almost any type of games, how adjusting the game according to the player’s real-life location can make the game experience personally relevant and highly addictive, and, most importantly, how “location-enabling” your game can help monetize the great majority of free players who love virtual items offered in the game, but who are not quite ready to pay for them.

Come listen to Christian’s talk if you are at the conference. You can also use a quick form here and request a meeting to discuss how we can work together on improving your game monetization.

When Apple kick started the fast growth of smartphone games, the most common business model was pay to download. Today it is clear that the leading model is in-game purchasing of virtual goods, such as game items that have some kind of utility in the game, vanity items that are just used for styling and decoration, or extra content in the form of new levels or challenges in the game.

Utility items and vanity items
Typically, the demand for utility items is greater than that for vanity items, but many developers find it important to offer both. Some have even found it possible to make items that work as both, e.g. a branded drink or a food item that you can have standing around, use for extra energy or use as a gift for other players.

Monetizing beyond the users who pay
When it comes to monetization,  it is important to understand that, while many games get half of their revenue from virtual goods, it is only a small fraction of players who pay for these items – typically between 1 and 5 percent, although there are exceptions like Angry Birds where 25% of people have bought the Mighty Eagle. The key here is that game developers should try to use multiple business models in order to effectively monetize all types of users:  those who are willing to download a paid game, the ones who find it attractive to buy items in a free game and users who would rather “pay” for their free experience by interacting with advertisers or sponsors.

In-game sponsoring instead of annoying banners
Many game developers don’t like using banner ads because of the negative effect they have on the user experience. Banners are seldom relevant to the user, the game or the location, so developers are turning to using sponsored game items which they already know are in a large demand. This provides brands with persistent branding since users tend to have an emotional attachment to their favorite game items. In some games users even begin to horde virtual goods, and it is clear that the majority of players see branded in-game items as an added value.

Last year Starbucks was named the Mobile Marketer of the Year, which is one of the highest accolades in mobile marketing. Starbucks is a mobile pioneer that has helped shape the mobile marketing industry last year, serving as an example to other consumer brands and encouraging marketing agencies and marketing platform providers like CloudMade.

Drive traffic in-store
Starbucks is commonly associated with coupons aimed at driving traffic in-store traffic, but it is clear that Starbucks uses mobile for the medium’s strengths: location, timeliness, convenience and measurability. During the year Starbucks have successfully used both SMS and mobile apps, like Pandora, Foursquare, Brightkite and Loopt, for location based mobile marketing.

Mobile as a key part of the overall marketing mix
For Starbucks mobile is part of a multi-channel mix that adds location focus to their overall campaigns. Campaigns start with Twitter, Facebook, Youtube, MyStarbucksIdea.com, Starbucks.com, print, television, radio, direct mail, and mobile is the last extension that reaches users on the go and leads them all the way into the retail locations. In-store promotions lead those customers the last few feet to the cash register.

Discounts for nearby customers drive foot traffic
What makes Starbucks a clear leader in mobile marketing is how the campaigns are clearly focused on going beyond eyeballs/branding and leading directly to increased retail sales. It is clear that Starbucks believe that by offering discounts to customers who are close to its coffee shops it will encourage brand loyalty and drive foot traffic.

Dopamine is a naturally occurring chemical in our brains and it is one of the most addictive substances known to man. Marketers are well aware of the fact that the euphoric highs dopamine gives us can help influence a number of mental processes, including pleasure, cognition and motivation. Dopamine has a strong influence on human behavior – from what we eat and how we behave in relationships to how we function at work.

Game developers and marketers should benefit from dopamine
Dopamine is also the key driver behind the phenomenon of lots of people checking SMS, email or Facebook multiple times every hour, to the point that no one can be in doubt that they are addicted. The point here is not for me to get on a high horse and complain about the way modern technology is taking advantage of our primitive urges. The point is that knowing this and taking advantage of it can make you a better marketer or application developer.

Dopamine in games
Playing games that are challenging or competitive increases dopamine level. If you are aware of the patterns of intermittent reinforcement and you know how, over time, this can release dopamine squirts when people use your games, you can design your games in a way that fits into this pattern and even takes advantage of it. Intermittent reinforcement is the addictive quality of games and it affects people at such a core level that it does not matter what kind of person you are – gamer, geek, whoever – you are can still be conditioned with the help of this pattern.

Dopamine in marketing
As marketers, we can use that fact that playing games releases dopamine by inserting our marketing into the games, and this way have our message and brand seen in a more positive light. In addition, the latest research shows that dopamine is associated with seeking out and searching, so treasure hunts and other location based marketing techniques where a mobile game or app guides the user to find something, like a retail location, to get a reward will release higher levels of dopamine resulting in pleasure, cognition and motivation connected with the brand.

Better games and marketing campaigns
At CloudMade we believe that an approach to the way games and brands can go beyond demographics and use behavioral analysis in conjunction with user testing can help improve gameplay and the brand experience in marketing campaigns. We work very closely with the game developers and consumer brands that partner with us to achieve this.

I was one of the early pioneers of the marketing tool called advertainment or advergames – games built around brands. We did 1:1 user testing with hundreds of people to find out what made a game deliver the best branding. The results were very clear:
- The players have to like the game and have fun with it
- They have to believe the game fits with the brand
- The brand needs to be integrated into the game, rather than just be displayed on a banner before or after the game.
 
Contributing to the game is the key
The result of a brand being associated with a game experience can be both positive and negative. If players feel that the brand detracts from the game, they will feel less positive about the brand after playing the game. If the brand is seen to contribute to the game experience, then players will associate the positive mood from playing the game with the brand itself.
 
Associating the brand with the fun game experience
Because games are very effective at improving the user’s mood, in-game sponsoring is one of the most effective brand building tools consumer brands have. 55% of people who play Angry Birds feel more relaxed after playing, 58% feel that playing puts them in a better mood.
 
Positive addiction
Over 80% of people playing Angry Birds find it always or sometimes addictive. This positive addiction helps marketers get very effective branding and drives users to visit retail locations as a part of the game experience.
 
Huge reach and high degree brand integration
When we designed Sponsored Locations, we wanted to create the perfect combination of huge reach and high degree brand integration with a highly positive experience. On the one hand, banner ads and interstitials feel like they were stuck on to the game like an undesired label and give you no in-game integration. Advergames built around a brand, on the other hand, provide high integration with the gameplay, but add no additional reach to the brand and are less likely to deliver a positive experience than highly successful commercial games. Neither of these tools maximizes reach and brand integration.
 
The perfect solution we came up with
Based on discussions with leading consumer brands, top developers and mobile users, the solution CloudMade has come up with is to include the brand in the game as a sponsor of highly attractive game items, such as new secret levels or in-game items allowing the player to excel in the game. The deal offered to the user is to go to the retail location and the in-game item will be free. Read more about Sponsored Locations here …
 
Sources: 2000 Advertainers, 2011, AYTM

CloudMade has found a way to add value for people playing mobile games, generate additional revenue for game developers and create a very compelling way for brands to drive retail traffic and revenue.
 
Mobile games is a huge marketing opportunity
Millions of users are having fun every day playing mobile games. This creates a huge marketing opportunity for consumer brands.
 
Banners are not the perfect solution
The only way brands and game developers are really taking advantage of this huge marketing opportunity is through banner ads adopted from the web. The banners do add revenue for game developers, but most gamers don’t like banners in the middle of their game. In addition, the banners are seldom the right tool for consumer brands and retailers to achieve positive branding, retail traffic and an increase in revenue.
 
Sponsored Locations
We need to find a tool that ensures that game developers make money and that brands get a great marketing tool in a way that people playing mobile games love.

CloudMade has solved this challenge by talking with leading brands and top game developers and building a service that meets their specific needs. The solution we have come up with is Sponsored Locations.
 
We look forward to talking with you too
If you are a game developer or a consumer brand that we have not yet talked with about tailoring Sponsored Locations to YOUR needs, we look forward to talking with you soon. In the meantime, please read more about how Sponsored Locations work inside the game …

The answer is that mobile games are what mobile users of all ages spend most of their time on.
 
Broad attractive demographics
Gone are the days when computer games were something played only by teenage boys with minimum purchase power. Now 64% of people with smartphones play mobile games, they have an average age of 30 years, 53% are female and 47% are  male.
 
Consumers spend a lot of time playing mobile games
Out of the 81 minutes that most smartphone users spend on mobile apps every day, an average of 38 minutes is used for playing games.
 
Consumers often play games near retailers
Adults and teenagers play mobile games at the office, on commuter trains, waiting for someone while shopping, in coffee shops, waiting for their kids and during sports events. Take a game like Angry Birds – it has 500 million users and 40 million of them play every day.
 
Finding the right place for brands in games
In fact, the market for mobile games has grown so dramatically that marketing experts believe marketers must give advertising in mobile games strong consideration for a spot in any digital media mix. By far the most common type of advertising in mobile games is banners, and while they certainly work, banners are seen by players as an intrusion into their fun world of mobile gaming.
 
Sponsored Locations
The massive reach provided by mobile games – millions of users having fun playing every day in multiple places, often in or near retail locations – would be a great marketing opportunity if only there was a way to truly become part of the game, offer real game value and use the games to generate traffic in the retail stores.That is the challenge CloudMade has solved by talking with leading brands and top game developers and building a service that meets their specific needs. The solution we have come up with is Sponsored Locations. Read more about Sponsored Locations here …
 
Sources: 2011, Nielsen, Flurry, Rovio, Geekaphone

Casual Connect, one of the most important events in the casual gaming industry taking place annually in the US, Germany and Ukraine, recently gathered gaming professionals in Kyiv for the latest knowledge exchange and networking.
 
CloudMade was invited to lead a session on location-enabled games based on the deep understanding of this market segment that we gained in communication with over 100 leading game developers and publishers over the last 11 months. The talk was presented by Iryna Lyashchuk, our Head of Developer Marketing. It covered a number of questions that helped the audience understand how using the player’s location and mixing the real world with the game world can add to the game’s success, in terms of the revenue it brings and the satisfaction it provides the player. Among the discussed questions were:

• How location features can help create personally relevant gameplay and encourage people to play wherever they go
• How games with location vary from location-based to location-aware and where the sweet spot for a developer/publisher is
• What unique monetization opportunities location opens up to game developers.

 
Watch the video from our session to hear some interesting facts and thoughts regarding this new trend that is changing the mobile gaming market.