Guest Post by: Jo Stratmann

According to video game research company  GameVision, 20.1 million people in the UK regularly play games across a variety of platforms and over half these people (10.4 million) visit online social gaming websites every month.

With the likes of Disney, Google and MTV Networks investing heavily in this industry, social gaming could become a popular medium for brands to interact with their audience.

But aside from being a fun and exciting way to engage with customers, what benefits does social gaming offer to brands and businesses?

1. Increase purchase rates

This is the biggy and probably the main factor that will push businesses into investing in social gaming.

According to Ravi Mehta, Vice President of virtual goods company Viximo, the secret to increasing revenue through gaming lies in branded social games.

Mehta estimates that non-branded social games generate 5 to 20 cents per user through the sale of virtual goods, while branded social games will earn 10 to 35 cents per user because the games reach an “already interested”, pre- established community for that brand.

Mehta also believes that branded social games encourage a higher rate of conversion. User testing of Facebook credits, Facebook’s virtual currency that will enable gamers to buy virtual goods across the Facebook platform, has already shown that people paying with Facebook credits are more likely to complete a purchase than those who don’t.

Aside from utilising Facebook credits, brands also have other options for generating revenue from social gaming. Games could incorporate virtual stores, for example, where users can then click through to a brand’s website or ecommerce store as part of the game.

Brands could also generate revenue through downloads. This could either be in the form of  game or app downloads, or virtual goods. Market Research company NPD group estimates revenue from game related downloads will reach $6bn by 2013.

2. Advertising

Another obvious way for brands to make use of social gaming is through advertising.

The Internet Advertising Bureau (IAB) has found that 79% of gamers respond positively to in-game advertising and brands should make the most of this.

Advertising could take the form of anything from simple product placement within a game to interactive videos or a fully themed social game.

Social gaming could also be used to push offers and discounts where gamers are rewarded with virtual credits when they interact with in-gaming advertising. These virtual credits could then be used to buy goods either within the game or from a brand’s ecommerce site.

As we’ve discussed before, social media doesn’t just take place online and social gaming could be the right place for brands to experiment with offline/online advertising and social media. Brands could develop games where the reward is a discount code that can be redeemed against in-store purchases. This type of discount scheme or reward will also help encourage brand loyalty and develop customer advocacy.

3. Targeted Marketing

Social gaming forces marketers to think carefully about their target market. In order for a game to succeed it must directly appeal to the needs, wants and interests of the people you are trying to sell to. But get it right and you will reap the rewards of developing a game that engages the right audience.

Brands who do create and develop social games can learn a lot about their audience, including gaming habits, demographic and  location. If the game is a download it will also enable brands to collect email addresses and even perhaps telephone numbers in a more effective way than other outbound marketing activity.

However, before implementing a social game, brands should ultimately think about two key things – is their target audience participating in social gaming, or likely to do so, and, more importantly, how to measure the success of the game against key objectives.

Original Post: http://www.freshnetworks.com/blog/2010/09/the-benefits-social-gaming-for-brands/

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