Scott Sinclair, an Associate  Consultant in our UK Marketing, Sales and Service practice explores the rapid growth of social gaming and the opportunities it presents in advertising

The incredible rise in popularity of social networking site Facebook, has fuelled the rapid growth of another industry – social gaming a web-based form of playing games with friends. According to Nielsen, online gaming became the second-most popular activity among US web surfers. Zynga, the market leader in social gaming, was valued at $5.51 billion whilst gaming magnate Electronic Arts is worth $5.22 billion – clearly signalling the incredible growth of social gaming compared to the traditional video games.

With reports suggesting that marketers are expected to spend $192 million to advertise on social networking games in 2011 and the social gaming industry expected to pass $1 billion this year, I’ve decided to take a look at some of the pioneers and early adopters and draw some conclusions as to how marketers can successfully use social gaming as part of their wider social media strategy. For example as part of an advertising campaign, to provide a platform for ongoing brand engagement, or exploit the sale of ‘virtual’ goods as an additional revenue stream.

So, what is Social Gaming?

Wikipedia describes social games as typically web-based games that can be played as a form of social interaction, as opposed to playing games in solitude. At first glance, this appears to be nothing new given that DOOM, a first person shooter game, was one of the most popular online games during the 1990s, and traditional gaming platforms like the Microsoft Xbox 360 and Sony Playstation 3 have had incredible success through online gaming.

However, rather than physical hardware acting as the platform, Facebook has provided these online games with the social platform to engage millions of social gamers, who are playing games like Farmville, Cityville and Fifa’s football stars. As such, gaming is changing from an individual experience, to a social experience that has minimal requirements – a facebook account and an internet browser.

So who are the early adopters? And what have they done?

With Reuters reporting that 30% of facebook users are playing casual games such as Farmville, Mafia Wars, Cityville and Car Town powering a $1.6 billion annual market for “virtual goods”– it’s no wonder there are some early adopters.

If you are a facebook user, you’ve probably seen wall posts from friends playing Farmville, which according to its makers Zynga, has nearly 58 million active users. Last year, McDonalds restaurants offered Farmville players the chance to tend its online tomato and mustard-seed fields for 24 hours. In return for participating, players received a one-off “digital” drink that gave players enhanced skills and a McDonalds branded hot air balloon to float above their own farm – leaving a lasting legacy of participation in the 24 hour campaign.

Car giant Honda, used social game Car Town, a social game where users buy and customise cars to go on virtual road trips, to promote the launch of its Honda CR-Z sport hybrid coupe in the US. During a two-month promotion, clickable adverts featuring images of the car appeared throughout the in-game billboards. Significantly, these billboards are stationed right next to every player’s garage, where every user begins a new session.

More recently, Toyota partnered with Car Town to debut the new line of Prius model at the same time as it was making its real life debut at the Detroit motor show. Toyata engaged game players by asking them to vote on a term to describe the plural of Prius, and in return players received a virtual t-shirt with their name on it.

Microsoft also used Farmville to generate a buzz about its search engine Bing, and gained over 400,000 facebook fans on the Bing fan page. The Bing promotion rewarded users with virtual currency for becoming a fan. Microsoft now use the facebook fan page to share Farmville tips and drive traffic to its search engine, with one post linking through to a Bing search receiving 585 comments and 20,000 click throughs in under four hours.

So what makes a successful social game?

In my opinion, there are two stand-out features that make a social game successful:

  1. Stickiness – making users frequently return to play is the key, and;
  2. Viral promotion – getting existing players to continually invite their friends to come and play means the game creators don’t appear to be spamming

Given that social games have managed to overcome two of the advertising ‘must haves’, it seems like a logical step for advertisers. However, with very few case studies around, I’ve drawn up my top three considerations to ensure a successful advertising campaign through social gaming:

1. Give careful consideration to the choice of game

I believe in order to make your advert successful, the game has to ensure your audience will be captivated and continually come back to play to see the advert, but you must ensure the advert is congruent with the theme of the game. Honda and Toyota both chose to advertise in a car game as it fits nicely with their brand

2. Leave your players with a reward that has value

Rewarding your customers is one of the most popular ways to ensure loyalty, by gifting users with a lasting memory of their experience and participation, you can ensure your social campaign will live on. However it isn’t enough to just look pretty and have your logo displayed, In-game items have to reward the player with special attributes that will help them progress further

3. It has to be simple, but not too simple

Make earning your reward too difficult and you risk players not bothering, but make it too simple and players will wonder why it’s too good to be true. Simple tasks like voting for a favourite definition, or harvesting one of your crops are great simple tasks that require some experience of the game, but don’t require lots of skill.

As advertisers increasingly look for innovative ways to promote, increase awareness and drive engagement with their brand, it’s likely more will experiment with social gaming. However, social gaming is not something that should be done on a whim, like setting up a facebook page or a twitter account, it’s something that should form part of an overall social media strategy.

In my opinion social gaming is just at the beginning and the next ‘iteration’ will be the bridging of the virtual world with the real world. Social gaming company SCVNGR is already tapping into this idea by offering ‘players’ the opportunity to ‘play a virtual game’ but earn ‘real world’ prizes. I believe this is the first step in bridging the gap between the virtual world (the life we have in facebook) and the real world and offers the opportunity to develop genuine customer loyalty over sustained period of time.

What are your experiences with social games such as Farmville, Mafia Wars and Car Town? What do you think is next for social gaming and advertisers? Will  more advertisers in social games will drive the crowds away? Or will this bring the virtual world closer to the real world?