From idea to reality: Foodspotting celebrates one year.
Co-fonder @ladylexy created foodspotting.com. Follow her story on twitter @foodspotting or dive into her motivation on slideshare. Here's a sample of some of her advice:
Avoid common mistakes startups make
1. Building something people don’t really want or need
2. Thinking too small
3. Moving too slowly
Her solution is to place UX at the core of her business. Find out more on the Foodspotting blog.
Tuesday, February 8, 2011
Monday, April 12, 2010
Polyvore Profile
UPDATE: Former CEO Sukhinder Singh Cassidy has stepped down, replaced by Co-founder Pasha Sadri.
Executive Summary
With a new CEO and millions of users, Polyvore is positioned to turn the corner in social media monetization by valuing data parsing as much as ad sales, direct referrals, or sponsorships.
About the Company
Polyvore is an enjoyable, addictive, and fun way for fashion enthusiasts to create collages based on catalog feeds, scanned images, and other web assets. Along with Lookbook.nu, it is setting the standard for fashion based social communities.
Polyvore connects directed curatorial, validated editorial, and retail referrals to a DIY community that rivals the user base of mainstream sites such as Style.com.
Current Revenue Pathways
Polyvore has all of the traditional revenue pathways of social media: online sales referrals, ads based on impressions, and sponsored “contests.” However, there are a few scalability roadblocks to this model:
Potential Roadblock: Complex Deals
Multiple complex deals could be required to connect some product images to specific online retailers. Some deals will be straightforward and others will be a mess. Referral revenue for fashion means constantly chasing, closing, and maintaining deals to make ensure the right sites, the right creative, and the right products remained linked. As the site grows, so will the need to develop systems for closing and managing these deals.
Problems like these are not insurmountable, but they are difficult. YouTube took on the messy legal tangle of sorting out multiple copyright holders to find ways to monetize mash-ups, tributes, re-mixes and more. They succeeded, but it required an ongoing investment. Not everyone has Google's deep pockets to fund the difficult work required to manage a vast spread of complex deals. Polyvore has deals in place, so maybe this isn't a roadblock, but as the site grows, the complexity will grow as well.
Potential Roadblock: Context Creates Meaning
Fashion is about cultivating desire and engaging imagination. Designers know this and control the context of an item very tightly. In fashion, you never simply buy an item, but you always also buy the idea of the item—the implied lifestyle or aspirational fantasy associated with the garment. It could prove to be a challenge to convince the highest-end brands to release control of context. Community monitoring at Polyvore quickly weeds out unappealing juxtapositions, but this is potentially a tough sell for luxury brands.
Social media means sending around little bundles of autonomous media; the message has to be able to stand on its own even when standing next to another. We naturally draw connections between images we see next to each other. Eisenstein famously formulated this theory for film. Marketers everywhere rely on this technique to transfer the positive feelings we feel for one item or concept onto another. Politicians use this on the campaign trail when they kiss babies and stand next to hard-working everyday people. Context creates meaning.
Traditionally, marketers have strictly controlled this process of associative value. Polyvore puts this power into the hands of users. It can be frightening at first, but can also be terrifically helpful in the long run, as an entire community sifts and sorts the best of the associations from the worst. The result is almost always something interesting and appealing.
True Value
Retail referrals, ads, and sponsorships are only the beginning of the true value of Polyvore.
As an example, let’s look at Twitter. The social media platform went from a way to update one’s personal status to inadvertently becoming a global monitor of the human condition. As soon users stopped talking about themselves and instead started talking about the world around them, the nature of real-time information exchange became altered forever. No longer just for entertainment, Twitter played a role in elections in Iran, the UK, Chile, the US and India. Every major natural disaster now results in people using Twitter at all stages of discovery, co-ordination and recovery.
Twitter enables anyone with a mobile phone to contribute to the information ecosystem. The New York Times regularly comments on how Twitter has transformed the nature of news.
For Twitter, it is not just about breaking stories, but is also about relevance. Through smart filtering and analytics, Twitter not only knows what people are talking about, but also knows what information is being valued. The next wave of great apps for Twitter will leverage how information is being valued to create secondary conclusions. Smart filtering and analytics are even being used in Twitter's newly announced revenue platform called Promoted Tweets.
Polyvore = Retail Analytics
Just as Twitter has gone from a social media network to the monitor of the human condition, Polyvore has the opportunity to grow from a social media fashion site to the pulse of retail analytics.
Clearly already thinking along these lines, Polyvore has a Zeitgeist section featured about halfway down the landing page. Much like Google’s Zeitgeist, the table shows current rankings for brands, sites, trends, and celebrities.
Assuming that deep data exists from the daily usage of the site, parsing this data could result in valuable information for retailers trying to decide what to buy for different markets.
Fashion retailer H&M famously monitors sales to drive production decisions much in the same way that Wal-Mart monitors sales to trigger warehouse deployments and production increases.
Polyvore has the chance to make tangible the inexplicable trends of fashion. Influential agents of change drift into and out of fashion in an untraceable way, but the results of those trends can be codified and sold through Polyvore. The value is only there, however, if it can be used to increase sales or reduce waste/costs.
Why hasn't Polyvore already launched such a service? My guess is that it isn't because they don't have the data, but is instead because they are looking for the best way to demonstrate the value of the service.
The value will come from solving for specific client needs, such as managing real-time purchasing decisions during holiday peaks, determining the best way to move dead stock based on associated buying trends, or identifying consistent secondary purchasing associations that can be extracted to drive customized incentive programs.
Positioned correctly, Polyvore has the opportunity to create a consultancy service division for producers and buyers looking for reliable data and recommendations to make product decisions that can move at the speed of trends.
Snapshot of Polyvore.com April 2010
User Base
118 million pageviews per month
Site duration 5-11 minutes per visit
35% between 18-34
25% between 35-54
average household income $80,000
72% say they’ve bought something they saw on Polyvore.
70% have posted a product on another social-networking site
Current Revenue
1/3 commissions/referrals
2/3 ads/contests/sponsorships
Sources
http://www.newyorker.com/reporting/2010/03/29/100329fa_fact_jacobs?currentPage=5#ixzz0kvvjnEEL
http://www.polyvore.com/cgi/business
http://blog.polyvore.com/2010/02/so-happy-to-be-here-from-polyvores-new.html
http://www.nytimes.com/2010/04/13/technology/internet/13twitter.html
Executive Summary
With a new CEO and millions of users, Polyvore is positioned to turn the corner in social media monetization by valuing data parsing as much as ad sales, direct referrals, or sponsorships.
About the Company
Polyvore is an enjoyable, addictive, and fun way for fashion enthusiasts to create collages based on catalog feeds, scanned images, and other web assets. Along with Lookbook.nu, it is setting the standard for fashion based social communities.
Polyvore connects directed curatorial, validated editorial, and retail referrals to a DIY community that rivals the user base of mainstream sites such as Style.com.
Current Revenue Pathways
Polyvore has all of the traditional revenue pathways of social media: online sales referrals, ads based on impressions, and sponsored “contests.” However, there are a few scalability roadblocks to this model:
Potential Roadblock: Complex Deals
Multiple complex deals could be required to connect some product images to specific online retailers. Some deals will be straightforward and others will be a mess. Referral revenue for fashion means constantly chasing, closing, and maintaining deals to make ensure the right sites, the right creative, and the right products remained linked. As the site grows, so will the need to develop systems for closing and managing these deals.
Problems like these are not insurmountable, but they are difficult. YouTube took on the messy legal tangle of sorting out multiple copyright holders to find ways to monetize mash-ups, tributes, re-mixes and more. They succeeded, but it required an ongoing investment. Not everyone has Google's deep pockets to fund the difficult work required to manage a vast spread of complex deals. Polyvore has deals in place, so maybe this isn't a roadblock, but as the site grows, the complexity will grow as well.
Potential Roadblock: Context Creates Meaning
Fashion is about cultivating desire and engaging imagination. Designers know this and control the context of an item very tightly. In fashion, you never simply buy an item, but you always also buy the idea of the item—the implied lifestyle or aspirational fantasy associated with the garment. It could prove to be a challenge to convince the highest-end brands to release control of context. Community monitoring at Polyvore quickly weeds out unappealing juxtapositions, but this is potentially a tough sell for luxury brands.
Social media means sending around little bundles of autonomous media; the message has to be able to stand on its own even when standing next to another. We naturally draw connections between images we see next to each other. Eisenstein famously formulated this theory for film. Marketers everywhere rely on this technique to transfer the positive feelings we feel for one item or concept onto another. Politicians use this on the campaign trail when they kiss babies and stand next to hard-working everyday people. Context creates meaning.
Traditionally, marketers have strictly controlled this process of associative value. Polyvore puts this power into the hands of users. It can be frightening at first, but can also be terrifically helpful in the long run, as an entire community sifts and sorts the best of the associations from the worst. The result is almost always something interesting and appealing.
True Value
Retail referrals, ads, and sponsorships are only the beginning of the true value of Polyvore.
As an example, let’s look at Twitter. The social media platform went from a way to update one’s personal status to inadvertently becoming a global monitor of the human condition. As soon users stopped talking about themselves and instead started talking about the world around them, the nature of real-time information exchange became altered forever. No longer just for entertainment, Twitter played a role in elections in Iran, the UK, Chile, the US and India. Every major natural disaster now results in people using Twitter at all stages of discovery, co-ordination and recovery.
Twitter enables anyone with a mobile phone to contribute to the information ecosystem. The New York Times regularly comments on how Twitter has transformed the nature of news.
For Twitter, it is not just about breaking stories, but is also about relevance. Through smart filtering and analytics, Twitter not only knows what people are talking about, but also knows what information is being valued. The next wave of great apps for Twitter will leverage how information is being valued to create secondary conclusions. Smart filtering and analytics are even being used in Twitter's newly announced revenue platform called Promoted Tweets.
Polyvore = Retail Analytics
Just as Twitter has gone from a social media network to the monitor of the human condition, Polyvore has the opportunity to grow from a social media fashion site to the pulse of retail analytics.
Clearly already thinking along these lines, Polyvore has a Zeitgeist section featured about halfway down the landing page. Much like Google’s Zeitgeist, the table shows current rankings for brands, sites, trends, and celebrities.
Assuming that deep data exists from the daily usage of the site, parsing this data could result in valuable information for retailers trying to decide what to buy for different markets.
Fashion retailer H&M famously monitors sales to drive production decisions much in the same way that Wal-Mart monitors sales to trigger warehouse deployments and production increases.
Polyvore has the chance to make tangible the inexplicable trends of fashion. Influential agents of change drift into and out of fashion in an untraceable way, but the results of those trends can be codified and sold through Polyvore. The value is only there, however, if it can be used to increase sales or reduce waste/costs.
Why hasn't Polyvore already launched such a service? My guess is that it isn't because they don't have the data, but is instead because they are looking for the best way to demonstrate the value of the service.
The value will come from solving for specific client needs, such as managing real-time purchasing decisions during holiday peaks, determining the best way to move dead stock based on associated buying trends, or identifying consistent secondary purchasing associations that can be extracted to drive customized incentive programs.
Positioned correctly, Polyvore has the opportunity to create a consultancy service division for producers and buyers looking for reliable data and recommendations to make product decisions that can move at the speed of trends.
Snapshot of Polyvore.com April 2010
User Base
118 million pageviews per month
Site duration 5-11 minutes per visit
35% between 18-34
25% between 35-54
average household income $80,000
72% say they’ve bought something they saw on Polyvore.
70% have posted a product on another social-networking site
Current Revenue
1/3 commissions/referrals
2/3 ads/contests/sponsorships
Sources
http://www.newyorker.com/reporting/2010/03/29/100329fa_fact_jacobs?currentPage=5#ixzz0kvvjnEEL
http://www.polyvore.com/cgi/business
http://blog.polyvore.com/2010/02/so-happy-to-be-here-from-polyvores-new.html
http://www.nytimes.com/2010/04/13/technology/internet/13twitter.html
Wednesday, October 7, 2009
Etsy for Avatars
Having a hard time understanding the Virtual World marketplace?
Think of it as Etsy for Avatars. The first time I heard this phrase I was instantly delighted with how clearly it sums up the potential for peer-to-peer selling in virtual worlds.
Virtual Worlds are a marketplace for selling premium services, "renting" real estate, selling customization services, monetizing advertising campaigns, empowering community-based fund raising and more - but what Virtual Worlds are perfect for - is peer to peer selling.
But instead of thinking of Ebay, think of Etsy.
So what is Esty?
While Ebay is a place where you can sell anything, Etsy is a place where pride in craftsmanship, artistic ability, and cultural acuity matter more than cut-rate prices. A community develops around the curatorial practice of selecting the best items, showing your top picks, and of course, hawking your own wares.
How big is this market? Here are two examples:
1) According to their website, IMVU has reached 40 million registered users, 6 million unique monthly visitors and a $25 million revenue run rate.
2) Second Life claims 250,000+ goods created each day.
So what are the barriers to success?
Ease of Use
The biggest is ease of use. It is still hard to create great content. Winners will emerge in the virtual goods market by finding a way to deliver higher quality goods easily. I faced this same problem a few years ago while working at DreamWorks. It is a lot of work to create high quality avatars or CG characters. The team of extremely talented designers and modelers and painters were working around the clock to create each new character. I found a way to automate the templating process to leverage 3D assets in the creation of 2D designs - the result was an elimination of the tedious set-up time that went into the design process. The artists were free to create based on actual geometry, rather than guessing, revising, and guessing again.
Curatorial Voice: Featuring Quality Goods in Open Marketplace
The second biggest challenge is featuring quality goods in a open marketplace. With so many virtual products being made each day, how can you best find the right avatar mod, fashion accessory, media appliance, virtual vehicle, or other item in the vast sea of product?
Let's first look at fashion retailing for some pointers. Two of the biggest fashion magazines are Vogue and W. They have teamed up to create Style.com. However, even with a huge fan base from the physical magazine, they are getting busted each month in page views by Polyvore.com and Lookbook.nu
How do these two underdogs do it? Polyvore features guest bloggers to give curatorial direction, but that's only half of the story. They have a very easy to search catalog of product and a super-simple UGC tool that makes customization of fashion collages a snap. These are then bloggable, and the whole cycle perpetuates itself.
Lookbook.nu looks gorgeous. It is a street fashion site with big numbers each month. But where they really shine is how clever their quality strategy is: they combine a velvet rope admissions policy with a remarkable innovation called "karma filtering"
With Karma Filtering turned on - you only see the good stuff - as demonstrated by the individual user's dedication to the community. They earn karma points for community involvement. With the filtering turned off - you see everything else. It makes for a much more enjoyable browsing experience to see page after page of great UGC.
Karma Filtering simultaneously energizes the core community while keeping the site looking fantastic. Those filtered out can still participate, and are encouraged (much like in the real world of fashion peer pressure) to try harder next time. Is it mean? Yes and No. Yes it is no fun to get filtered out, but you are filtered for karma (meaning community participation) not filtered for having a lousy look or unattractive features. To be honest, I think it is one of the most clever devices used to keep a site looking great without having to manually police every entry.
What about games?
Finally, let's look at Sony Playstation. They have a virtual world called Home, which is still struggling to find it's feet as a hangout/game launching venue. They will get there - as soon as they perfect the rewards/badges/achievements piece of the puzzle to drive use, game re-play, and longer/return engagement. They've taken the first few steps, and will make it happen soon. What I wanted to point out about Sony, however, isn't Home, but is the original programming featured on PSN. Watching Pulse or Qore presents entertaining, enjoyable hosts who lead you through the latest products.
Can templating, automation, and semi-automation play a role in the creation of customized goods and avatar services for virtual economies? Can virtual goods adopt curatorial, Karmic, and guided soft-touch sales and presentation methods? Absolutely!
This market is growing.
If you have a good story about a particularly great example of the selling, marketing or distribution of virtual goods - please leave a comment.
Links:
Esty
IMVU Creator
SL Wikitecture
SL Immersive Spaces
SL Relay for Life
SL economic stats
PSN Original Programming
Style.com
Polyvore
lookbook.nu
Think of it as Etsy for Avatars. The first time I heard this phrase I was instantly delighted with how clearly it sums up the potential for peer-to-peer selling in virtual worlds.
Virtual Worlds are a marketplace for selling premium services, "renting" real estate, selling customization services, monetizing advertising campaigns, empowering community-based fund raising and more - but what Virtual Worlds are perfect for - is peer to peer selling.
But instead of thinking of Ebay, think of Etsy.
So what is Esty?
While Ebay is a place where you can sell anything, Etsy is a place where pride in craftsmanship, artistic ability, and cultural acuity matter more than cut-rate prices. A community develops around the curatorial practice of selecting the best items, showing your top picks, and of course, hawking your own wares.
How big is this market? Here are two examples:
1) According to their website, IMVU has reached 40 million registered users, 6 million unique monthly visitors and a $25 million revenue run rate.
2) Second Life claims 250,000+ goods created each day.
So what are the barriers to success?
Ease of Use
The biggest is ease of use. It is still hard to create great content. Winners will emerge in the virtual goods market by finding a way to deliver higher quality goods easily. I faced this same problem a few years ago while working at DreamWorks. It is a lot of work to create high quality avatars or CG characters. The team of extremely talented designers and modelers and painters were working around the clock to create each new character. I found a way to automate the templating process to leverage 3D assets in the creation of 2D designs - the result was an elimination of the tedious set-up time that went into the design process. The artists were free to create based on actual geometry, rather than guessing, revising, and guessing again.
Curatorial Voice: Featuring Quality Goods in Open Marketplace
The second biggest challenge is featuring quality goods in a open marketplace. With so many virtual products being made each day, how can you best find the right avatar mod, fashion accessory, media appliance, virtual vehicle, or other item in the vast sea of product?
Let's first look at fashion retailing for some pointers. Two of the biggest fashion magazines are Vogue and W. They have teamed up to create Style.com. However, even with a huge fan base from the physical magazine, they are getting busted each month in page views by Polyvore.com and Lookbook.nu
How do these two underdogs do it? Polyvore features guest bloggers to give curatorial direction, but that's only half of the story. They have a very easy to search catalog of product and a super-simple UGC tool that makes customization of fashion collages a snap. These are then bloggable, and the whole cycle perpetuates itself.
Lookbook.nu looks gorgeous. It is a street fashion site with big numbers each month. But where they really shine is how clever their quality strategy is: they combine a velvet rope admissions policy with a remarkable innovation called "karma filtering"
With Karma Filtering turned on - you only see the good stuff - as demonstrated by the individual user's dedication to the community. They earn karma points for community involvement. With the filtering turned off - you see everything else. It makes for a much more enjoyable browsing experience to see page after page of great UGC.
Karma Filtering simultaneously energizes the core community while keeping the site looking fantastic. Those filtered out can still participate, and are encouraged (much like in the real world of fashion peer pressure) to try harder next time. Is it mean? Yes and No. Yes it is no fun to get filtered out, but you are filtered for karma (meaning community participation) not filtered for having a lousy look or unattractive features. To be honest, I think it is one of the most clever devices used to keep a site looking great without having to manually police every entry.
What about games?
Finally, let's look at Sony Playstation. They have a virtual world called Home, which is still struggling to find it's feet as a hangout/game launching venue. They will get there - as soon as they perfect the rewards/badges/achievements piece of the puzzle to drive use, game re-play, and longer/return engagement. They've taken the first few steps, and will make it happen soon. What I wanted to point out about Sony, however, isn't Home, but is the original programming featured on PSN. Watching Pulse or Qore presents entertaining, enjoyable hosts who lead you through the latest products.
Can templating, automation, and semi-automation play a role in the creation of customized goods and avatar services for virtual economies? Can virtual goods adopt curatorial, Karmic, and guided soft-touch sales and presentation methods? Absolutely!
This market is growing.
If you have a good story about a particularly great example of the selling, marketing or distribution of virtual goods - please leave a comment.
Links:
Esty
IMVU Creator
SL Wikitecture
SL Immersive Spaces
SL Relay for Life
SL economic stats
PSN Original Programming
Style.com
Polyvore
lookbook.nu
Sunday, September 20, 2009
Monetizing "Free to Play"
“Free to Play” is a great concept, but a terrible name.
The name creates a negative emotional response in potential customers who are skeptical about any endeavor being truly free. The concept of free, however, remains a huge motivator; everyone likes getting a good deal, and no one likes paying for something if they don’t have to.
As creators of casual and social entertainment, our challenge is to develop a product with a monetization scheme that overcomes the barriers to adoption, retains loyal customers, and generates a predictable recurring revenue stream.
Defining a winning product
A successful product is one that is entertaining, emotionally rewarding, minimally invasive, and offers a monetization pathway that feels like a welcomed solution to game play, rather than an annoying pitch or a cheap bait-and-switch.
David Chang, Executive VP of Business Development and Marketing at the online game publisher Gamescampus agrees with the problem of the “Free to Play” naming issue. He suggests instead calling the games "MTS Games" (Micro-Transaction Service Games) or even MTG (Micro-Transaction Games).
Micro-Transaction Game sounds a lot more respectable, but it loses the allure of free. Each company will have to decide which label is better for generating adoption and rewarding loyalty.
Mr. Chang may be onto something, however, with his suggestion. It somehow rings more true. Authenticity goes a long way in social media. Let's look a little further into his suggestions.
He goes on to list three requirements on an MTS or MTG game:
An MTS game would be a game that:
1. Requires no purchase to download and play the game
2. Does not have a level-cap or content-cap beyond which you need to pay
3. Is at least partially monetized by sales of in-game goods
The first two rules set out by Chang are simple enough. The third rule becomes more interesting. Selling in-game items is the core of most successful monetization schemes for casual and free games.
Selling In-Game Items
Customers are only interested in buying in-game goods if the value proposition of the purchase is clear. Different customers buy for different reasons. Our job as game creators is to lay this out clearly, so that the customer understands why they would want to buy.
Personalization
Some customers buy for the pleasure of personalization. In this monetization pathway, common in-game purchases are costumes for avatars, décor for in-game habitats, and virtual pets or accessories.
Leveling Up
Other customers are playing to win a mini-game or to level up. For them, the motivation to buy breaks down into either increasing their power, ability, or speed. When the clock is ticking away and a player is running out of time to complete a level in which he or she has invested a lot of time and effort trying to win, buying a booster or power item can be very appealing.
Repeat Sales
Getting customers to buy once, however, is not enough. Most successful monetization models have a pathway for repeat sales to customers. This can take the form of new assets to be used in personalization. Think of this monetization pathway as the casual gamer equivalent of fashion – every season it goes out of style, to keep up, you are always in a state of transition and mutation. The pleasure in fashion is to continue to change, while overall staying true to your own sense of style. This works well in personalization. Offer many different choices that still retain the overall identify of the player, just don’t offer them all at once. Roll them out over time and in limited quantities. Limited edition items rule the street fashion world, and they also rule the personalization of games. It seems counter-intuitive to inject basic supply-and-demand scarcity into the digital world – where any asset is a digital copy of another – but players are paying for exclusivity – the pride of owning a unique item – and so limiting how many people can buy a personalization item is welcomed by players, not shunned.
At the core, however, is the pleasure of self-identification. I once interviewed a hard core gamer who also hung out on casual sites. He claimed that at first he thought he would never buy a personalization item for his avatar, but then after playing a while he gave in saying, “What can I say? I wanted my avatar to look more like me.”
If your customer base is less interested in décor, and more interested in playing to win, then repeat sales are also possible. To these players, sell a power item or a booster item with a time limit – so that you are in effect “renting” it during key moments when the player needs extra help in order to level up. Not only is this a great motivator for a sale, but is also a way to incur the goodwill of the gamer. Instead of blaming you for charging extra for the booster or power item, they will blame themselves for not being able to get through the level without extra help. If you offer the item in such as way as to seem helpful, your sale will come as a welcomed solution, rather than an annoying pitch.
These basic ideas are just the tip of the iceberg in terms of creating solid monetization pathways.
I need your help:
I am working on a longer, more detailed report on monetization pathways for casual and free games, as well as new social media entertainment products. If you have a great example or story of a monetization pathway that worked well (or failed miserably) please let me know. email: james.buckhouse@gmail.com
Here are links that dig deeper into this topic:
http://news.cnet.com/8301-13846_3-10164614-62.html
http://en.wikipedia.org/wiki/Free-to-play
http://news.cnet.com/8301-13846_3-10282180-62.html?tag=mncol
http://lostgarden.com/2009/07/flash-love-letter-2009-part-1.html
http://www.flashgamesponsorship.com/advice/advice-from-industry-players/selling-premium-content-the-drunken-masters-experiment.html
http://www.gamasutra.com/view/feature/3924/wheres_the_cash_for_flash.php?page=1
http://www.gamasutra.com/blogs/GregMcClanahan/20090325/985/Nitpicking_Flash_Game_Summit.php
http://www.gamepoetry.com/blog/2009/02/27/interview-with-kongregate-about-sponsorships/
http://www.slideshare.net/capncleaver/metrics-for-a-brave-new-whirled?type=presentation
http://evolutionlive.blogspot.com/2009/06/ten-ways-to-monetize-your-flash-game.html
http://virtual-economy.org/blog/arpus_in_social_networks_and_s
http://www.heyzap.com/developers/guide
The name creates a negative emotional response in potential customers who are skeptical about any endeavor being truly free. The concept of free, however, remains a huge motivator; everyone likes getting a good deal, and no one likes paying for something if they don’t have to.
As creators of casual and social entertainment, our challenge is to develop a product with a monetization scheme that overcomes the barriers to adoption, retains loyal customers, and generates a predictable recurring revenue stream.
Defining a winning product
A successful product is one that is entertaining, emotionally rewarding, minimally invasive, and offers a monetization pathway that feels like a welcomed solution to game play, rather than an annoying pitch or a cheap bait-and-switch.
David Chang, Executive VP of Business Development and Marketing at the online game publisher Gamescampus agrees with the problem of the “Free to Play” naming issue. He suggests instead calling the games "MTS Games" (Micro-Transaction Service Games) or even MTG (Micro-Transaction Games).
Micro-Transaction Game sounds a lot more respectable, but it loses the allure of free. Each company will have to decide which label is better for generating adoption and rewarding loyalty.
Mr. Chang may be onto something, however, with his suggestion. It somehow rings more true. Authenticity goes a long way in social media. Let's look a little further into his suggestions.
He goes on to list three requirements on an MTS or MTG game:
An MTS game would be a game that:
1. Requires no purchase to download and play the game
2. Does not have a level-cap or content-cap beyond which you need to pay
3. Is at least partially monetized by sales of in-game goods
The first two rules set out by Chang are simple enough. The third rule becomes more interesting. Selling in-game items is the core of most successful monetization schemes for casual and free games.
Selling In-Game Items
Customers are only interested in buying in-game goods if the value proposition of the purchase is clear. Different customers buy for different reasons. Our job as game creators is to lay this out clearly, so that the customer understands why they would want to buy.
Personalization
Some customers buy for the pleasure of personalization. In this monetization pathway, common in-game purchases are costumes for avatars, décor for in-game habitats, and virtual pets or accessories.
Leveling Up
Other customers are playing to win a mini-game or to level up. For them, the motivation to buy breaks down into either increasing their power, ability, or speed. When the clock is ticking away and a player is running out of time to complete a level in which he or she has invested a lot of time and effort trying to win, buying a booster or power item can be very appealing.
Repeat Sales
Getting customers to buy once, however, is not enough. Most successful monetization models have a pathway for repeat sales to customers. This can take the form of new assets to be used in personalization. Think of this monetization pathway as the casual gamer equivalent of fashion – every season it goes out of style, to keep up, you are always in a state of transition and mutation. The pleasure in fashion is to continue to change, while overall staying true to your own sense of style. This works well in personalization. Offer many different choices that still retain the overall identify of the player, just don’t offer them all at once. Roll them out over time and in limited quantities. Limited edition items rule the street fashion world, and they also rule the personalization of games. It seems counter-intuitive to inject basic supply-and-demand scarcity into the digital world – where any asset is a digital copy of another – but players are paying for exclusivity – the pride of owning a unique item – and so limiting how many people can buy a personalization item is welcomed by players, not shunned.
At the core, however, is the pleasure of self-identification. I once interviewed a hard core gamer who also hung out on casual sites. He claimed that at first he thought he would never buy a personalization item for his avatar, but then after playing a while he gave in saying, “What can I say? I wanted my avatar to look more like me.”
If your customer base is less interested in décor, and more interested in playing to win, then repeat sales are also possible. To these players, sell a power item or a booster item with a time limit – so that you are in effect “renting” it during key moments when the player needs extra help in order to level up. Not only is this a great motivator for a sale, but is also a way to incur the goodwill of the gamer. Instead of blaming you for charging extra for the booster or power item, they will blame themselves for not being able to get through the level without extra help. If you offer the item in such as way as to seem helpful, your sale will come as a welcomed solution, rather than an annoying pitch.
These basic ideas are just the tip of the iceberg in terms of creating solid monetization pathways.
I need your help:
I am working on a longer, more detailed report on monetization pathways for casual and free games, as well as new social media entertainment products. If you have a great example or story of a monetization pathway that worked well (or failed miserably) please let me know. email: james.buckhouse@gmail.com
Here are links that dig deeper into this topic:
http://news.cnet.com/8301-13846_3-10164614-62.html
http://en.wikipedia.org/wiki/Free-to-play
http://news.cnet.com/8301-13846_3-10282180-62.html?tag=mncol
http://lostgarden.com/2009/07/flash-love-letter-2009-part-1.html
http://www.flashgamesponsorship.com/advice/advice-from-industry-players/selling-premium-content-the-drunken-masters-experiment.html
http://www.gamasutra.com/view/feature/3924/wheres_the_cash_for_flash.php?page=1
http://www.gamasutra.com/blogs/GregMcClanahan/20090325/985/Nitpicking_Flash_Game_Summit.php
http://www.gamepoetry.com/blog/2009/02/27/interview-with-kongregate-about-sponsorships/
http://www.slideshare.net/capncleaver/metrics-for-a-brave-new-whirled?type=presentation
http://evolutionlive.blogspot.com/2009/06/ten-ways-to-monetize-your-flash-game.html
http://virtual-economy.org/blog/arpus_in_social_networks_and_s
http://www.heyzap.com/developers/guide
Engagement Design
User Generated Content, viral content, and passionate social communities all seem ripe for monetization, but so far few companies have been able to do this well.
This fall is shaping up to see a renewed interest in tackling this problem. YouTube is hiring monetization designers, Pure Verticals got some great press in San Francisco Magazine, Adify has widgets as does SproutBuilder, and ShareThrough is looking to make a play, and it seems others are thinking it over as well. So what will make the difference between an interesting idea and success?
What are the barriers to success and what are the opportunities?
I believe the answer to both questions lies in user experience. Like being a good friend or expert conversationalist, social media requires listening to the user, who is both the customer and the audience, and respecting their pleasure; interrupting their enjoyment is a sure way to lose engagement.
The design, experience, messaging and targeted monetization all need to integrate with the user's pleasure, rather than destroy it.
Just as Google first got traction with their brutally simple (and ingenious) simplified homepage for search, the UI/UX does more than set the tone, it is the entire conversation.
This fall is shaping up to see a renewed interest in tackling this problem. YouTube is hiring monetization designers, Pure Verticals got some great press in San Francisco Magazine, Adify has widgets as does SproutBuilder, and ShareThrough is looking to make a play, and it seems others are thinking it over as well. So what will make the difference between an interesting idea and success?
What are the barriers to success and what are the opportunities?
I believe the answer to both questions lies in user experience. Like being a good friend or expert conversationalist, social media requires listening to the user, who is both the customer and the audience, and respecting their pleasure; interrupting their enjoyment is a sure way to lose engagement.
The design, experience, messaging and targeted monetization all need to integrate with the user's pleasure, rather than destroy it.
Just as Google first got traction with their brutally simple (and ingenious) simplified homepage for search, the UI/UX does more than set the tone, it is the entire conversation.
Subscribe to:
Posts (Atom)
