Advertising Revenue

[Soggy]

I am involved in a start up in eastern europe and curious about the percentage of revenue you earn on advertising and downloads.

[Indiepath]

These percentages are based on North American Online Casual Games Revenue for 2005, revenues have increased for 2006 but I understand percentages are pretty much the same (please correct me if I am wrong).

Download - 43% of Total Revenues
Advertising - 39.5% of Total Revenues
Subscriptions - 17.5% of Total Revenues

[Soggy]

Thanks for that info. And that is not based on a major portal providing back any advertising revenue such as Microsoft saying they will now do.

[lakibuk]

Advertising - 39.5% of Total Revenues
Strange. Don't see any ads on Real,BFG or Reflexive.
Where are they?

[arcadetown]

Yahoo Games, MSN Game Zone, AOL Games, Miniclip, ArcadeTown, Shockwave, etc.

[lakibuk]

Ok,thanks. Surprisingly high number.

[Indiepath]

Ok,thanks. Surprisingly high number.Some of the major portals make more from advertising than they do from game sales.

[lennard]

I'm not getting rich on ads. But. I usually get 10-25 cents per ad. click, sometimes as low as 3 cents, all time high water mark was $2. Since I get ~$7 per game sale through Reflexive and 1 in 100 downloads = sale we can say a click for a download is worth 7 cents. My download starts versus completions are ~3/5 so we can reduce that number to ~4 cents...

Ad clicks are worth more to me than game download clicks.

[LilGames]

Ah this is dangerous, as has been mentioned in other threads... When portals care more about the ad revenue, they will care less about game sales. = not good for developers.

[Soggy]

It is interesting then why a publisher like Playfirst doesn't run more prominent ads.

[Matthew]

It is interesting then why a publisher like Playfirst doesn't run more prominent ads.

They run ads on the nag screens of their game trials.

[Indiepath]

Ah this is dangerous, as has been mentioned in other threads... When portals care more about the ad revenue, they will care less about game sales. = not good for developers.Why not? pjio for example shares advertising revenues with developers who post games. So not only do you benefit when people make a purchase you get paid for downloads and trial plays. How can that be bad?

[LilGames]

Why not? pjio for example shares advertising revenues with developers who post games. So not only do you benefit when people make a purchase you get paid for downloads and trial plays. How can that be bad?

Do you really expect the major portals to suddenly start sharing their ad revenue? ...considering that the amount of casual games being published is rising?

[Indiepath]

Do you really expect the major portals to suddenly start sharing their ad revenue? ...considering that the amount of casual games being published is rising?It's already starting to happen, see MSN.

[lennard]

Hey Tim, does this mean you are going to be sending me ad. $!

On another note, and maybe this needs its own thread. Gamehouse sent me a note today about their affiliate program ending but noting that I can sign up with RealArcade. I'm not sure that I can say how much they pay (check your inbox as I'm sure ya'll will be getting the same email as me...) but its less than Reflexive. Why on earth would I sign with RA when Reflexive pays me more for the same games... Am I missing something or do they just assume we are stupid?

Also, LilGames. Your games, my games, all of our games are the free content that those portals are publishing and paying you less than half for sales on. Ad. revenue doesn't hurt the equation for small developers if we realize the simple fact that those portals aren't going to survive on ads alone. Now MSN and the rest are starting to pay a midgin back so maybe the pie will just grow.

OK, while I'm portal bitching. HAS ANYONE SEEN A ROYALTY CHECK OR EVEN A REPORT FROM BOONTY? They won't be getting anymore of my games.

Lastly a humble plug. Real E$tate Empire pays a 40% affiliate fee through BMTMicro and is converting well, feel free to sign up and hit me up for the animating gif on my website if you want to carry the game.

Peace-out.

[arcadetown]

Big chunk of ad revenue is generated on top portals such as Yahoo, AOL, MSN, Shockwave, etc that have in house ad sales forces which can draw very high premium advertising rates particularly on pre-rolls. Otherwise you end up using the typical 3rd party ad agencies that generate garden variety rates and lack real pre-rolls so game sales typically dwarf advertising revenue thus why much lower priority or non-existant on other sites.

[Indiepath]

Hey Tim, does this mean you are going to be sending me ad. $!
When I re-launch I'll post more details on this forum, you can then decide how to maximise your return.

[Snooker]

Strange. Don't see any ads on Real,BFG or Reflexive.
Where are they?

Our ad success has been through the in-game ads in the demo versions of games, which you can view here: http://www.gamehouse.com/downloadgames/?navpage=downloadgames&navnum=7&sort=1. These games give the player the option of playing the game indefinitely without paying, while having to view in-line video ads every 15-20 minutes, at natural break points (between levels).

Revenue from website banner ads are very minor, especially when compared to download, subscription, and in-game ad revenues. We pay the developer royalties on in-game ad revenue, based on their download royalty rate.

We've seen great success with in-game ads since we launched the program last summer.

[James C. Smith]

It's already starting to happen, see MSN.

Shockwave and MSN share ad revenue with developers. Real has also committed to this. There are probably more examples

Strange. Don't see any ads on Real,BFG or Reflexive.
Where are they?

I think you are confusing web games with downloadable games. The ads that generate lots of revenue are the ads you see while you player the game or a pre-roll add as the game is loading. Currently these are easiest to implement in web based games. Sites that focus on web games have lots of ads and make lots of money off them. (MSN, Shockwave, Yahoo) Sites that focus on downloadable game, likes the ones you mentioned, do not have lots of ad revenue or no ads at all. But as Snooker said, this is starting to change as ads are imbedded in downloadable games.

So don't expect to see a lot of revenue by slapping banner ads on a downloadable games web site.

[Snooker]

Next Gen just published an article about in-game advertising, FYI. Here's the link (http://www.next-gen.biz/index.php?option=com_content&task=view&id=4993&Itemid=2).

[zoombapup]

I'll say to you, what I said to your CEO at casuality. What happens with people who absolutely HATE advertising intruding on your entertainment? What about people who bought a TIVO to get rid of ads?

Youre all moving towards Ad revenue because it makes you money, but youre completely forgetting the customer.

Now right now, it may be that they arent switched on enough to realise that there are alternatives. But as more portals try and push ads at them they will soon enough learn to go to places without ads.

I guess in the US you are less sensitive to ads because you are bombarded with them. As an example, I really cant watch TV in the US because it is so ad saturated.

Personally, I think its a good thing, because it means that whoever DOESNT do ads then has a powerful USP to use to get more customers.

Trying to milk people for each and every cent really bothers me. I know its a viable business decision, but I guess the hippie in me just rankles at the horrible face of consumerism it represents.

Ok, go on, attack me for having a moral/humanist stance. :)

[zoombapup]

Hmm, wonder if there's a market for an "ad blocker" for casual games. Could get rid of eyeblaster at least..

[Indiepath]

Hmm, wonder if there's a market for an "ad blocker" for casual games. Could get rid of eyeblaster at least..
Fantastic idea! Charge Devs for ad-enablers and players for ad-blockers :)

[zoombapup]

You do know youre going to hell for that.. :)

[NielsK]

I'll say to you, what I said to your CEO at casuality. What happens with people who absolutely HATE advertising intruding on your entertainment? What about people who bought a TIVO to get rid of ads?


I'm not an expert on Eyeblaster, but if I'm not mistaken , those users have the option of buying the game - which gets rid of the ads.

[arcadetown]

Not to mention 99% of users are freeloaders so why not try to get some revenue from them.

[DFG]

As long as devs get a percentage of ad revenue and the ads aren't doing anything malicious, I think it is the inevitable move.

[Pyabo]

Trying to milk people for each and every cent really bothers me.

God isn't that the truth... I absolute cannot stand this shit. Like a hotel that charges $1.00 for LOCAL calls on the phone. Or the rental car company that charges you $10 so someone else can drive the car you're already renting. That shit just burns me up because it's specifically designed to eke more money out of a customer without actually providing any value in return. I know marketing asshats have a term for this, but I can't remember what it is...

[Jack Norton]

Well similarly to what happens in real life, customers spread the word and start to use different... hotels :D

[LilGames]

God isn't that the truth... I absolute cannot stand this shit. Like a hotel that charges $1.00 for LOCAL calls on the phone. Or the rental car company that charges you $10 so someone else can drive the car you're already renting. That shit just burns me up because it's specifically designed to eke more money out of a customer without actually providing any value in return. I know marketing asshats have a term for this, but I can't remember what it is...

You're describing situations with paying customers. The subject here (as NielsK already pointed out) is monetizing the downloaders who have paid you NOTHING. They aren't customers until they buy the game. It's not exactly "milking" them when the alternative is them playing for FREE (but still sucking up bandwidth).

[DFG]

And its not like you are charging them to view ads :)

Think of it this way: you as a developer are shouldering the cost of hosting your download, you put all that time and effort and money into creating the game, why not get some of that revenue back (and maybe even make money) off of the customers that are using your product and not buying it?

My only concern are ad systems that violate standards of privacy, hose up a computer, don't give the option to filter out non-family-friendly ads, and revenue that doesn't make its way back to the developer. If those issues can be resolved for me, I'm for it.

I don't see how this is all the much different from bloggers pasting Google adsense all over their sites in an attempt to make a bit of money from the content they are providing for free. It is the advertisers that are shouldering the costs, not the users.

[Jack Norton]

You're describing situations with paying customers. The subject here (as NielsK already pointed out) is monetizing the downloaders who have paid you NOTHING. They aren't customers until they buy the game. It's not exactly "milking" them when the alternative is them playing for FREE (but still sucking up bandwidth).

If I ever found an ad in a downloaded game rest assured that I won't download from that site anything else in future.

[tentons]

Do games like Adventure Quest, etc. have ads for non-paying players? Those are in-browser games, but I think the net effect (no pun intended!) is the same: you play a game and see ads from time to time.

As long as it isn't going to hinder/distract play (like if you have blinking banners in the gameplay screen--now that would suck), I could tolerate it. It seems like it would be a little like watching TV.

It's certainly worth experimenting with IMHO. Let's face it, it's really really really hard to earn enough to live on as an indie, much less earning enough to grow your company. If in-game ads would help me expand my operations, I would utilize that opportunity and put the money into making more and better games.

[Snooker]

I'll say to you, what I said to your CEO at casuality. What happens with people who absolutely HATE advertising intruding on your entertainment? What about people who bought a TIVO to get rid of ads?


If the user buys the game, the ads go away. Easy as pie. :)

Ok, go on, attack me for having a moral/humanist stance. :)

Hippie. ;)

[Snooker]

My only concern are ad systems that violate standards of privacy, hose up a computer, don't give the option to filter out non-family-friendly ads, and revenue that doesn't make its way back to the developer. If those issues can be resolved for me, I'm for it.
Done. :)

Our ads...


don't mine personal data.
are contained within the game executable. Uninstall the game and the ad code goes away.
are focused specifically on our demographic, so are family-friend (and even oriented).
share their revenue with the devs.

[electronicStar]

The devellopers here are thinking from their develloper POV and don't manage to change it to the consumers' POV.
The idea that people will buy the game to get rid of ads is IMO erroneous, IMO most people will consider the ads as a nuisance and won't buy the game just because of that.
As for the concept of free games that serve as vehicles for ads, we can imagine how, before long, the games will become filler crap. Still a valid industry but not one I'd like to be part of at the moment.

[soniCron]

The idea that people will buy the game to get rid of ads is IMO erroneous, IMO most people will consider the ads as a nuisance and won't buy the game just because of that. As far as I understand it, ad-supported games are bringing in 200-500% more (http://www.next-gen.biz/index.php?option=com_content&task=view&id=4993&Itemid=2) than their traditional try-buy counterparts.

Now, I'll give you the benefit of the doubt that I have no first-hand experience with this, but I don't think there's much room for opinion here. :p

[Pyabo]

Of course there's room for opinion... my opinion is that when you read an article overly-hyping in-game advertising written by the company that stands to gain from the hype, you should take it with a grain of salt.

Now if we have a developer working with Real post on this board that they are make 2-5 times as much money now with their game -- THEN I'll believe it.

What is Real's plan for sharing this revenue, I wonder? The same cut as sales?

[Snooker]

What is Real's plan for sharing this revenue, I wonder? The same cut as sales?
Yes, participating devs get their standard royalty rate on the ad revenue.

[soniCron]

my opinion is that when you read an article overly-hyping in-game advertising written by the company that stands to gain from the hype, you should take it with a grain of salt. Indeed; grain of salt taken. However, I find it hard to believe it benefits Real to pimp this service and make less money... :rolleyes: