Aaron+Templeman+Final+Report

Final Report = proximity a next generation connection  Proximity Research Report = ==

= Marketing Through Social Network Games =

Table of Contents
Executive Summary Introduction: Ineffective Past Of Marketing Through Social Networks Social Network Games And How They Work Marketing Through Social Networking Games Implications Attachment 1: Attachment 2: References

Executive Summary
Companies have tried to reach Gen Y through social networks, but have so far been ineffective. Social networking sites have proved to attract Gen Y, yet businesses have not been able to reach them. Social networking games are a unique part of social networking sites because they require active user interaction, and they require users to incorporate other users into the game. The growth of social games have opened up the window for unconventional marketing through the games. The following are the major techniques of using advertisements in social games: It is recommended that companies market to Gen Y through social networking games by using one to all of the types of advertising through games.
 * advertisements that are not incorporated into the game
 * subliminal advertising
 * advertising through virtual money

**Ineffective past of marketing to Gen Y through social networks**
Through the peek of MySpace, to the now height of Facebook, Gen Y has always been big users of social networks. In Proximity focus groups showed that all of the participants had some form of social network, in some cases utilized multiple social network sites (attachment 1). Companies have tried to reach Gen Y any way they can because it is becoming harder and harder to reach Gen Y through traditional media. Companies have been trying to reach Gen Y through social networking sites, but so far it has not worked well.

Advertisement bars have proven that they are not a good idea. The advertisements are small and off to the side. As see in ex one and two the advertisments are small and off to the side. The viewer has no reason to even look at the advertisement (Profiting From Friendship, 2010). A reason for advertisers to not use advertisment bars is " sites let users generate their own content, they will find it hard to attract advertisers because brands will not want to take the risk of appearing alongside examples of profanity, obscenity or nudity—or all three at once (Profiting From Friendship, 2010)  ."

Another popular way of advertising is for businesses to create their own social network sites. This works by becoming "friends" with potential clients. The businesses could then send specials to members and the members would visit the sites. The problem with this strategy is that it is expensive to maintain an attractive website. A professional looking page would require programmer to maintain appearances and staff to manage specials and communications to other social network users. Using programmers and staff would become expensive quickly. Also Proximity focus group results show that Gen Y would only only be open to communicating with business through social networks if the businesess do not intiate communications with them and they receive specials, coupons, etc. This puts a strict limit on the possibility for what a business could do with a social network page.

The overall profitability of advertisements on social networks is dismal at best, "although user numbers were sharply up last year, the social-networking industry's revenues in America, its biggest advertising market, rose only by a modest 4% to $1.2 billion (Profiting From Friendship, 2010)." The statuesque of advertising is not working.

**Social network games and how they work**
Social network games are simple compared to the games that are available through console games such as through Xbox 360 and PlayStation 3. Console games require the top developers and programmers to create the game, and consequently they require take a large amount of start up capital. Console games have numerous levels with plots that often have multiple plot twists. They have graphics that are ahead of their times and one can play with other gamers from all around the world. These games sell for around $65, but they take close to a year to create (Mathews, 2010).

Social network games are the polar opposite in many ways: they take a week or two to produce; they are free to play; there are little to no graphics; there is no plot let alone plot twists. The games fulfill the minimal requirements: they have an objective and there is a level of difficulty. The most popular social network game could be created by someone that has little to no experience or knowledge on creating and developing games (Gaudiosi, 2010).

Generally, the games work by the user begins the game with a minimum amount of credits or achievements. The user reaches achievements not by completing tasks that require skill but require time and effort. An example of this would be the popular game Mafia Wars. In Mafia Wars the user starts a mafia and the user accepts and completes missions. The user gets money for completing missions and can buy upgrades. The social aspect is integrated by the user's mafia gets stronger by adding friends.

One of the most popular game on Facebook is FarmVille, attracting around 82 million users monthly, which compared to Facebooks 400 million users it is a little under a quarter (Gaudiosi, 2010). Anything that has around a quarter of Facebook's users automatically becomes a potential source for marketing. FarmVille started in June 2009 and has stayed there ever since. It works by the user starting a farm, and the user grows crops and livestock. The user then sells the crop or livestock in a market and the process continues. FarmVille incorporates the social aspect by the user getting benefits by other users joining farming with them. For example if the user has a certain number of friends they can plant more fields.

In both the games, along with the well majority of social network games, they incorporate getting other people to join your team, group, etc. In other words the games are self promoting because users are rewarded when they get other users to play. In most games there is the option to buy upgrades instead of earning them; however, most people do not use this option.

**Marketing through social network games**
It used to be that console gamers and social gamers did not do both. However, the two types are merging together. In the last quarter of 2009, 64% of console gamers played a social network game; two thirds of social network gamers played console games (Mathews, 2010). This is important because not only are there a lot of social network game users, but it appears the numbers will be increasing. It was one thing to speculate that more people will play social network games, it is another to specify a specific group. Console gamers already proved that they like to play video games, so it is likely that the majority of them will play console game's sibling: social network games.

However effective marketing through games could be, social networks could hinder the businesses by imposing limitations. Facebook is concerned with generating revenue and protecting the users from spam. MySpace has taking the approach of not limiting the games. The different approaches effects the potential for marketing. If Facebook is trying to charge a large amount to advertise in games then it may become unprofitable. Also if Facebook is overprotective of users it could limit the ways to market. However, if MySpace lets games and advertisements to run without limits then advertisements may becoming overbearing and users may not look to MySpace for social network games

One way of marketing through games is by having advertisements that are not part of the game. This could consist of advertisements before access of the game or a side bar advertisement. The benefit of these are they would be cheap because the only cost would be developing the advertisement and for the placement. There would not be a high development cost for creating the advertisement bars because the programming is relatively generic. The disadvantage of this would be that it is doubtfull that anymore attention would be payed to these then regular advertisment bars.. However, these types of advertisments may be more effective becasue the advertisments can be based on the information generated by the game.

Subliminal advertising in the games is another way to market. An example of this could be having oneof the obtainable items in Farmville be a companies new product. Another type of example would be if a company owned a farm in Farmville and tried to interact with other 'farmers'. The benefits of subliminal advertising is that it is unconventional and had the user interacting with the advertisment. Whether it is an off hand adverftisment in the game or actually having a company or its products in the game it is guarteeded that the gamers are being directly exposed to the product marketing because they are interacting with it. The disadvantage is that it would be expensive to develop and has a high risk of failure. Before a company can spend money on marketing they must first decide the game that they need to advertise in. If the game turns out to not be popular then the money will be wasted. Developing in game advertising would be expensive because it has to be catered to the game.

Using virtual money as a means of advertising is another way to market. Virtual money is what the gamers receive when objects/tasks are completed; essentially it is the way to guage the progress and level of the player. The way to turn virtual cash into marketing is to provide rewards for accomplishments. For example: if a gamer reached milllion dollars in the game Mafia Wars they would receive ten free iTunes. Gen Y would be attracted to this becasue they are getting free items with no hitch; Apple would benefit becasue they are attracting users to their sites. This would be especially usefull to companies just starting out that need to get their products name out. The disadvantage of this is the company stands to give away free product and might not see a return. If the strategy is ineffective it will take time to see the supporting results because there would be a time delay to get return users.

These ways can be combined at focused on for the companies preference. Companies could use the combination of any or all of the methods to satisfy the company trying to market. The extent that each company invest in diffeerent methods depends on how much capital they have to invest. Any form of marketing will be more expensive than traditional advertising so companies may run into a problem.

The demograph of social network users is not lopsided, it covers all of Gen Y. It is the common sterotyped that only males play video games, but it was found that 55% of social network game players were females showing that both genders can be reached (Owyang, 2010). Over half of of 15-24 say they have a social network profile so (Mathews, 2010).


 * Implications of social network marketing**

By using social network games to market Gen Y could be finally reached. The users of social network are pradominantly Gen Y. If one fifth of social network users play games and 400 million people use Facebook then potentially 80 million people could be reached. The possibility to have interactive advertisments and in game marketing will make marketing through social network games effective. The key is not only could they be reached, but they could be reached affectively. By marketing through social network games Gen Y could be effectively reached.

Recomendations

Marketing through social networks has been proven complicated as well as ineffective. Although marketing through social network games has proven risky and expensive, there is a payoff. There has been three main ways to advertise discussed: It is recomended that corporations trying to market through Gen Y use social network games as a channel. Companies should form their marketing strategy by the amoutn of capital they have to use; using virtual money would be the most expensive and advertisment bars the least expensive.
 * advertisments that are not part of the game
 * subliminal advertisment
 * advertising through virtual money

Proximity Focus Group Results The rationale for the focus group was to determine how Gen Y views the security aspect, if Gen-Y still favors Facebook, how they primarily use the site, and what developments would cause this demographic to switch to another site, and how Gen Y views businesess using social networks. The findings were that most important all of the participants had social network sites, primarily Facebook. Gen Y does not focus much on security as long as there is an option to control who can view their profiles. However, if there was amount of security they would be hesitant. Social network sites are primarily used to keep in touch with friends either throw chat, commenting on photos, etc. The participants demonstrated a follow the crowd mentality so they would change social network sites if their friends did. Businesses using social network sites as a means to market was half viewed as acceptable as long as the businesses did not intrude on the users, and half were completely opposed. One participant expressed fear of "stalking" by businesses. There were 16 focus group sessions consisting of 80 total participants

http://trends.google.com/trends?q=farmville&ctab=0&geo=us&geor=all&date=ytd&sort=0

http://trends.google.com/trends?q=mafia+war&ctab=0&geo=us&geor=all&date=all&sort=0

http://www.insidesocialgames.com/2010/03/02/top-25-facebook-games-for-february-2010/ top 25 games of feb 2010

http://www.web-strategist.com/blog/2010/01/19/a-collection-of-social-network-stats-for-2010/ 55 percent women