Social Gaming: The Next Billion Dollar Industry | Tier10lab
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Social Gaming: The Next Billion Dollar Industry | Tier10lab

Social Gaming: The Next Billion Dollar Industry of the Year
Madeline Milani

Gaming on social networking sites is a rapidly growing pastime for internet users. Facebook’s “Farmville” and other popular games are becoming significant cash-cows (pun intended). The research firm eMarketer claims that almost 30% of the internet-using population will play at least one game on a social networking site throughout the course of 2011 – a whopping 15% increase from last year.

The growth of this success is attributed to branded advertisements, lead-generation offers, and the increasing rate of money spent on virtual products. Of these three, virtual products are the most successful, making up 60% of the profit. Although less than 6% of social gamers spend actual money on these games, this small percentage is likely to produce up to $653 million this year. The spending of real money on virtual products is the most profitable segment of social gaming revenue, which is highly beneficial for companies like Honda to utilize for branding. Honda used the popular Facebook game Car Town to promote its latest vehicle, the CR-Z.

The popularity of social gaming presents a variety of exciting opportunities for advertisers to reach more consumers, as the Honda example demonstrates. By offering an in-game product for users to ‘purchase,’ Honda raised awareness of their brand over a large group of people. Advertisers can also take advantage of the social gaming market by displaying ads within the game, and by setting up promotions and rewarding gamers for participating in these promotions. Getting ‘rewards’ and leveling up are major driving incentives for users, and therefore a great chance for advertisers to obtain leads.

Social gaming can also be utilized to target specific types of consumers. Social gamers are not just “nerds” – many of them are middle-aged moms, for example. Different games appeal to different people. Analyzing what games attract what type of users can help target consumers that best fit the advertiser’s product.

Whether they are integrating their brand into the actual game, as Honda did with the CR-Z, or displaying ads in the game, advertisers can take advantage of a variety of strategies to reach consumers. Social gaming has opened up a new medium for advertisers, and it is only becoming more successful.

See the attached TED Talk by Seth Priebatsch: “The Game Layer on Top of the World.” Seth speaks to how we’re in the midst of a time when the “social layer” hovers over all we do on- and offline. He then points to the next paradigm shift being the “gaming layer,” that’ll be sure to excite any hoping to market, sell, and engage with the next generation of online consumers.