Game Developers Level Up with MediaSpike

November 09, 2012 / by / 0 Comment
Dan_MediaSpike

Traditional digital advertising and gaming are like vampires and wooden stakes

Digital advertising has become a major force in the marketing world, and virtually any company with a marketing plan has a digital strategy. Adsense ads, banners, pop-ups and in-context clickthroughs work, and these things are consuming a larger percentage of the ad spend every year.

Except that is, in the gaming world. Blake Commagere, CEO of digital product placement company Media Spike, told me why banners just don’t work in games: “Your users are fixated and obsessed on that little square that is the game, and anything that isn’t the game, they just don’t even see it. They just completely tune it out.”

In the old “Mad Men” days of advertising, product placement was up front in the television world. Actors didn’t just smoke cigarettes, they smoked Kools. Housewives did the laundry with Tide. Later, the alien in E.T. gobbled up Reese’s Pieces, and James Bond favored Smirnoff in his vodka martinis. Even today, it’s all over the place. There’s a reason why, nearly every time you see a laptop computer in a movie or television show, it’s a MacBook. It’s not just because the producers are fanboys—it’s because Apple wrote a check.

Placement in digital games is the latest trend, and it may just save the gaming industry from collapsing in on itself. The overall trend in gaming, especially in lower-end 2D games for smartphones and social media games, is that they are easier and cheaper to produce, and easier to sell. It’s not that expensive to get an SDK to make a game for the iPhone, and then putting it on the App Store is more a matter of waiting for approval than it is ponying up a big fee. Because the barrier has been lowered for developing these games, there are many more game developers today than there used to be, and the result is a crowded marketplace. Good for the consumer, but when you’re trying to sell games at 99 cents, actually making money at it is difficult. Product placement will change that equation, giving serious game developers a second revenue stream and helping them to become profitable in a market with otherwise narrow margins.

Before he launched MediaSpike, Commagere developed Facebook games like “Zombies” and “Vampires”, which were wildly successful, but early on he ran into a common dilemma in the dotcom world—having something that’s popular and cool doesn’t necessarily mean you can make money with it. “After a few months, we had just shy of 60 million players,” he said. “And I ran into the same struggle that everybody had at the time, which was figuring out: So I can get users, but how do I monetize them?” Traditional advertising was giving Commagere horrible results. He then started experimenting with two things; virtual goods, and product placement. Both yielded tremendous results.

Will gamers accept product placement in their games? The proof is there. After experimenting with product placement in his games, Commagere said, “What really was interesting to me, was that users responded very, very strongly to the campaign, and I never got complaints. We did product placement campaigns, and when a campaign would end, we would remove the product or branding from the parts of the game, and we would get people saying, ‘Bring this back. How come you took it out?’ For me, I was like, ‘Oh my God, these people get sad when you take away the advertising.’” Commagere believes the placements made the game more realistic, particularly in a world where people tend to express themselves through brand identification.

“We did product placement campaigns, and when a campaign would end, we would remove the product or branding from the parts of the game, and we would get people saying, ‘Bring this back. How come you took it out?’ For me, I was like, ‘Oh my God, these people get sad when you take away the advertising.’”                         -Blake Commagere

That realization of course, became the birth of MediaSpike, which is a platform for brokering and automating the product placement process in games. Early on, product placement without a centralized platform was laborious. “There was a huge amount of time and effort. People were sending us the wrong size stuff, wrong sites to access, and things that were inappropriate that didn’t match the art style of the game,” said Commagere. “It was slow moving and very frustrating. And lastly, we ran into problems with managing all the stats and delivering on the performance of the campaign.” Other times, there were timeliness issues, when an advertiser wanted something up in a game within days to coincide with a campaign or product rollout. “So, as things got going, I realized that they all had the same experience I did, and had a sense of the money being good, but it was difficult to manage the pipeline. I wished that there was something that did that for me.” That was his “A-ha” moment. Up until that point, product placement in games was very much a manual process. Commagere and his team built technology to streamline it, and build APIs that automate the entire product placement stream.

“The way we built our APIs,” said Commagere, “Is that they can see a real-life example on the live game. We generate a unique URL that our API knows how to process, and lets them see.” For example, a player may be drinking a generic drink, and a drink manufacturer simply plugs their own brand in place to see how it looks in context.

By adding a revenue stream to games, startup game developers who might otherwise face a steep upward climb are able to broaden their margins, and become profitable faster, and with a lower number of required users. “It could mean the difference between, ‘we’re barely getting by and have to let some people go because the game isn’t making money’, and ‘We’re generating enough revenue and need to hire more people to start our next game,’” said Commagere. “That sort of thing really excites me.”

ABOUT THE AUTHOR

A veteran of the dotcom boom, Dan's history dates back to those heady days when 19-year-old Stanford dropouts with $10 million in venture money were creating great (and sometimes not-so-great) things. His deep experience in helping companies create their messaging strategies, combined with his years as an industry observer and pundit, has led him to create Ugly Dog Media. From the beginning, his strategy has been to surround himself with incredibly talented people, and this strategy has enabled him to build Ugly Dog Media from nothing into the international marketing firm it is today. Dan has been in the industry long enough to know what works . . . what doesn't work . . . and most importantly, what shouldn't work but still does. Dan received his B.A. in Literature from University of California, Santa Cruz.

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