The Social Conundrum
Operators have long viewed social media as a rich source of new players from previously uncharted demographics, but are they any closer to realising this potential?
In response to the quesÂtion ‘what is social media’ “ a puzzler busiÂnesses have been fallÂing over themselves to answer since the incepÂtion of Facebook in 2004 “ one senior VP in a US communications company drawled: “It’s the crack cocaine of the internet. We want it, we need it and we go into withdrawal when we don’t get enough of it.”
It was not a subtle analogy. Business wants to encourage, if you’ll pardon the pun, ‘just one more hit’ and egaming is no different. Like every other sector, egaming companies are fighting for a space on the street corner, trying to push their product.
The statistics suggest it should be simple: if Facebook were a country it would be the third most populated in the world (ahead of the US); 500 billion minutes a month are spent on Facebook (last year it was 150 billion); the average number of tweets per day on Twitter is 27 million (an increase of eight times in 2009); while the number of YouTube videos viewed per day is two billion.
Traditional marketers could be forgiven for thinking that all they need do is to have a presence in the social media space, whether that be a Facebook fan page or a Twitter account, the ‘like’ and ‘retweet’ icons being continually clicked, fresh consumers signing up and the revenue rolling in. But it is not that simple and it has not worked out that way.
On the face of it, operators are correct to view social media as a rich source of new playÂers but there is a great deal of work to be done until its potential is fully realised. This much is obvious by the simple method of looking at how many people ‘like’ a company’s prodÂuct on Facebook or the number of ‘follows’ on Twitter. PokerStars has 2,919 fans on its comÂmunity page, 888’s presence on Twitter is unconvincing, while 888sport has 196 followers and you can’t even be sure it’s a genuine account.
Success stories
There are, however, several success stories. Zynga Poker has proved that embedding games within social netÂworks can introduce egaming offerÂings to a wider audience. Its Texas Hold ‘Em application has an astonÂishing 27,945,894 monthly active users, making it the second most popular game on Facebook in June next to another of Zynga’s products, the incredibly popular Farmville that counted 82 million active users in May according to insidesocialgames.com. Crucially, however, Zynga’s poker game is the only egaming-related product in the top 25 games on Facebook.
For egaming companies to have similar results, the first challenge is to recognise the importance of social media as a separate marÂketing entity. Matt Nash, chief executive of social media and technology experts Oosocial, says that as recently as last year it had been viewed as something for the office junior to look after when they have a few spare minutes from their main role.
“Thankfully that’s changing,” says Nash, who hopes to sign up 10 to 20 egaming firms this year. “We’ve certainly seen the pace pick up. It’s being taken more seriously at senior manager level. They [egaming companies] had no budget to take things further, but with senior managers getting involved and putting money aside for the investment that is required to see a return, things are moving where they should be.
“I think it’s fast approaching the top of the marketing spend and that’s where it has to be. All gaming companies are fighting hard to find new players but at some point they’ll have to think ‘how can we retain players for longer?’ using social networking as acquisition and attention. That’s really important. We’re startÂing to see companies investing more and more each year and there’ll be a tipping point when social gets the bigger slice,” he adds.
Jonathan MacDonald, co-founder of conÂsulting company This Fluid World, remains unconvinced egaming knows what it is getting into. “There seems to be a willingness to find out about this ‘social networking thing’ but I fear it’s viewed as ‘another channel to adverÂtise on’ which is about as non-human as you can get.
“Return on investment is viewed largely against ad spend but if you can harness power of the crowds, enabling the armies of fanatics to advocate and protect, the return on investÂment is monumentally different in concept and value than how many clicks and downloads appear from showing a banner on a site.”
If spending money is lesson one, the second social lesson is arguably more important. You wouldn’t invite someone to your home for coffee and biscuits, for example, unless you enjoyed their company. The principle appears to be the same when it comes to social media. Users won’t give you a second glance unless you are offering something in return. Worse than spilling your drink on a new friend’s upholstery, it is the biggest social network faux pas companies can make according to Craig Hepburn, Nokia’s global director of digital.
“The key is to get into people’s heads rather than bombard them,” he says. “You must add value to the conversation. I’ve seen companies like Betfair add value by posting things which are informative, and provide tips, or insight into events.
“What they’re not doing is spamming the market. This is the difference from traditional media where info and adverts are pushed at people. Social is very different in the way that people decide to subscribe to your network. If you don’t add value you’ll be excluded and your business will be isolated in terms of its reach.”
Ben Carter, Betfair’s head of online conÂtent services, is mindful of the need to reach out to users. He adds: “An example of this is the Twitter Predictor application we developed for the World Cup giving fans the chance to win an iPad by predictÂing the correct score of each England game and the time of the first goal.”
Nokia’s Hepburn would like to see more flexibility from egaming companies, simiÂlar to that shown by Costa Bingo, which modified its software to allow players to invite friends via social networks. “It’s a great opportunity to get people to put their money where their mouths are,” he says. “I’m looking at a model like Tailorbet [the wager exchange focused on customised sports betting] and seeing great potential in terms of getting into the social space.”
MacDonald would rather see companies take this kind of approach before acceptÂing friend requests from one another. 888’s acquisition of the Mytopia social games development studio from Real Dice may prove to be a shrewd move but MacDonald would like to see more user-focused partnerships: “The real deal is the deal with the citiÂzen. Company purchases are interÂesting but prioritising people is critical.”
Conundrums and challenges
However, there are hurdles to overcome. The social media demographic is constantly changing. Facebook was iniÂtially dominated by the 18 to 34-year-olds but the fastest growing demographic worldwide is among people 35 years and older. Of those, 57% are women. Couple that with the fact that the average person playing social games is a 43-year-old woman, and egaming finds itself having to make small talk with an audience that it has not been used to addressing.
Then there is the problem with Facebook itself. Ladbrokes recently had its commuÂnity page taken down. Facebook imposes a number of strict terms and conditions when it comes to gambling. “You can advertise as much as you want [in the UK but not the US] and you can drive people to an external website but the issue a lot of gaming companies are having is around Facebook apps,” explains Nash. “If I create an application it’s against their terms and conditions to send people to go and gamble and spend money. What PokerStars and Zynga have done is create environÂments where you can use virtual money but play inside the Facebook network.
“Does this mean social games are going to have an advantage? Well, short-term how are they going to translate that interÂest into real money on their site? Long-term it may not be a problem because Facebook should open up,” he adds.
Facebook is at least talking about such a move. According to a spokesperson, the site is “currently evaluating additional polÂicies related to gambling”. Although this gives little away, it is understood the curÂrent terms and conditions will be relaxed.
This should not mean egaming comÂpanies can kick back and relax. “It’s not about sales, or ads, or click-through rates. It’s about pursuing relationships and fostering communities of consumÂers,” reiterates Google’s senior user expeÂrience researcher Paul Adams. That’s a little more subtle than the “crack cocaine” approach.
Social networking in numbers
25bn
The number of content articles (web links, news stories, blog posts, notes, photos) shared on Facebook per month. This is six times higher than in 2009.
Source: Espresso marketing agency, Toronto
42%
Number of people who knew what online social networking was when asked. The remaining 58% said ‘no’ or ‘don’t know’
Source: Synovate Research
500m
Facebook’s members worldwide as of July. It has added 100 million in the last five months alone. 8% of the world’s population is now on the site.
Source: Facebook
500bn
The number of peer influence impressions Americans generate per year via social media.62% of these impressions come from Facebook.
Source: Espresso marketing agency, Toronto
43
The average social gamer is a 43-year-old woman. Females outweigh males by a ratio of 55% to 45%. They are also more avid social gamers; 38% said they play multiple times a day
Source: Gameinformer.com
US$639m
In 2009, social gamers spent US$639m. This is expected to grow to US$1.5bn in 2014
Source: Games.com