Is Social Gaming an Ecosystem of Hell?

Social games are online games played on social networks like Facebook or MySpace. They are not the same as video games played on XBOX or Playstation 3 console (Axon). Examples of social games include Farmville, Mafia Wars, Bejeweled Blitz, and Tetris. Unlike video games which belong to a “hits-driven business”, social games are designed for more durability (Terdiman). That means even after the game is released for public play, the innovation process continues to iterate and new features are added with time.

An example is Zynga’s Farmville, a social game played on Facebook, which is estimated to have about 83 million monthly active users (Terdiman). Zynga’s marketing strategy is to continue to introduce new games and new features of existing games to engage its existing players (Terdiman). Similarly, PopCap Games is making big money through its popular game Bejeweled Blitz, with the game downloads, the Blitz coins virtual currency, the virtual goods transactions, and the Facebook version (Mack).

A 2010 survey conducted by PopCap Games found that there are approximately one hundred million people playing social games today (Axon). It also claimed that Facebook is the most popular social network site for online gamers (Axon).

Some specific statistics reported include:

• Surprising, the average social game player is a 43-old female.


• 55% of social gamers are female.


• Women, rather than men, tend to play multiple times a day.


• 68% of women prefer to play with people they know whereas only 56% of men indicate such preference.


• 41% of men are likely to play with strangers while only 33% of women would do the same.


• More than 50% of gamers started playing a game based on a friend’s recommendation, or they learned from Facebook’s news feed that their friend is playing that game.

With the growing popularity and prosperity in the social game sphere, industry experts are expressing concerns for the harm to consumers and legitimate businesses caused by the increase in scams by game companies and the inadequate regulatory actions taken by platforms such as Facebook and MySpace to discourage such behaviors. According to Andrew Trader of Zynga, about a third of the company’s total revenue comes from advertisers providing memberships and subscriptions (magazine, CD, and mobile services, etc.) (Arrington2). Now guess where the scam money comes from.

Many experts perceived social gaming companies as unethical because they make money out of scamming the users. The scam started off by getting the users to pay cash for in-game currency used to improve their scores or enhance their gaming experience. Some consumers paid. For others who refuse to pay cash, they are offered them in-game currency when they entertain lead gen-type offers (Arrington). These offers are scams to fool both the consumers and the legitimate advertisers. Some examples of scams include Tattoo Media (mobile scams) and Video Professor (membership and subscription scams). The required payments and commitments are usually written in fine prints or unnoticeable, thus causing users to accept the offer without knowledge of the scam (Arrington).

The consumers are hurt because they get tricked into these lead-gen scams and ended up paying more money than they would have paid in cash to begin with. The advertisers are hurt because some users signed up for free trial just to get the in-game currency, and then they cancelled their memberships. So the legitimate advertisers (like Netflix and Blockbuster) saw lower quality in advertising. They left and were replaced by the less decent ones (like Tattoo and Video Professor). Social network sites like Facebook and MySpace are slow to set rules to stop these scams and they are also not enthusiastic to enforce these rules because cutting off the scams means reduction of significant amount of revenue coming from advertisements by gaming companies (Arrington).

This scenario presents social gaming to be similar to an ecosystem of hell. People get scammed and paid more money. The money gets rolled back into Facebook in advertisements, which generated more users. This creates more businesses and more scams for the gaming company. They advertize more and scam more, and the process repeats in cycles of an unethical mess (Arrington).

Do you think that someday the consumers would become so smart that they would give up their addiction to social games and stop themselves from being scammed?

Blog Comments:
Baribeau, Tami. "FarmVille Podcast Highlights - April 16th, 2010 - Games.com - The Blog." Games.com - The Blog. 17 Apr. 2010. Web. 21 Apr. 2010.

Orland, Kyle. "Farmville Could Be Coming to Smartphones, IPad and SMS - Games.com - The Blog." Games.com - The Blog. 19 Apr. 2010. Web. 21 Apr. 2010.


Sources:
Arrington, Michael. "Scamville: The Social Gaming Ecosystem Of Hell - Washingtonpost.com." Washingtonpost.com - Nation, World, Technology and Washington Area News and Headlines. 31 Nov. 2009. Web. 21 Apr. 2010.

Arrington2, Michael. "Scamville: Zynga Says 1/3 Of Revenue Comes From Lead Gen And Other Offers." TechCrunch. Nov. 2009. Web. 20 Apr. 2010. .

Axon, Samuel. "Who's Playing Social Games? [STATS]." Social Media News and Web Tips – Mashable – The Social Media Guide. 17 Feb. 2010. Web. 20 Apr. 2010.

Mack, Christopher. "For 25th Anniversary, Tetris Gets Social Via Facebook." Inside Social Games - Tracking Innovation at the Convergence of Games and Social Platforms. 12 Apr. 2010. Web. 20 Apr. 2010.

Mack2, Christopher. "Bejeweled Blitz Gets a Boost, a Price Tag, and Facebook Connect." Inside Social Games - Tracking Innovation at the Convergence of Games and Social Platforms. 8 Apr. 2010. Web. 20 Apr. 2010.

Terdiman, Daniel. "Why Zynga Ticks off the Games Industry | Geek Gestalt - CNET News." Technology News - CNET News. 12 Apr. 2010. Web. 20 Apr. 2010.

Growing the Magic Bean of Social Media Metrics

To gain competitive edge in the online social realm, companies adopt social media as part of their marketing mix. Social media analytics is available to assist companies learn from what consumers are saying online about their brand, products and competitors. Thus they can take proper actions to grow customer relationships and improve bottom line. Companies want to integrate social media data across the organization in business areas such as marketing and brand management, customer service, market research, and corporate communications. Thus they want to be able to measure the return on investment (ROI) of social media.

Today, there are ongoing debates about the ROI of social media, not only on how to measure ROI of social media, but also on whether ROI can be measured in the first place. Here are the two sides of the argument:

• Some people feel that it is impossible to measure ROI because social media represents the value of consumer conversations and relationship building on the web (which is intangible). Because we cannot measure the impact of a conversation or relationship between two people, it would be difficult to measure social media.

• Other people feel that social media insights are only valuable if they can be converted to data. This way, management can base their marketing strategy and decision on concrete statistic-based metrics.

To effectively measure the ROI of social media, a company must first define its business goals, and assign the right attributes for measurement. There are new attributes for social media such as authority, interaction, velocity, attention, sentiment, and actions. The company will have to benchmark its programs according to established goals and assigned attributes. Measurements of ROI can be both qualitative and qualitative in nature.

Qualitative data includes information such as corporation reputation, conversations or customer relationships. In order to measure how well a company is performing in these areas, it needs to:

• Determine specific area(s) it wants to measure (e.g. corporate reputation)

• Come up with the right benchmark (ask questions such as what consumers are saying about the quality of our product and service?)

• Take appropriate actions to achieve success (ask questions such as are we getting higher marks on how consumers rank our product and service?)

Quantitative data includes metrics such as network traffic, amount of sales, or SEO ranking. To measure the performance in these areas, a company needs to:

• Determine which metrics it wants to collect

• Use the right tools to capture the data (there are free tools available like AidRSS, Google Analytics, Feedburner, and Xinu)

• Analyze the data and make changes for improvement

According to Jason Fall, it is a waste of time to try to measure ROI in social media because we can never quantify human interactions and conversations. Katie Delahaye Paine claimed that the only way to measure is ROI is to assess whether we are getting what we want from the conversation.

The real question is: Is building customer relationship really that different between online and the traditional setting? It seems like traditional marketing measures success in terms of how many leads, proposals, presentations, and contracts are generated over a set period of time. Won't it be the same for online marketing as well?

Sources:

Falls, Jason. "What Is The ROI For Social Media?" Social Media Explorer. 28 Oct. 2008. Web. 17 Apr. 2010.

"Social Media FAQ #3: How Do I Measure ROI? « Web Strategy by Jeremiah Owyang | Social Media, Web Marketing." Web Strategy By Jeremiah Owyang: Web Marketing, Social Media. 26 Feb. 2008. Web. 17 Apr. 2010.

Spataro, Mike. "Understanding Social Media ROI." VisInsights. 29 Oct. 2008. Web. 17 Apr. 2010.

Uhrmacher, Aaron. "How to Measure Social Media ROI for Business." Social Media News and Web Tips – Mashable – The Social Media Guide. 31 July 2008. Web. 17 Apr. 2010.

Predictions on Social Media Trends

With the growing popularity of social media, it is conceivable that social networking sites will become more sophisticated, more niche specific, and more integrated. Specifically, some predicted social media trends are listed as follows:

• More televisions will be available through the Internet
  
  As evident in the recent March Madness NCAA Men Basketball Tournament, NCAA and CBS jointly announced the viewing of the games through the NCAA website. Other available sites include Hulu, Boxee, Apple TV and Netflix.


• More companies will establish and enforce a social media policy
  
  In order to protect itself from reduced productivity and increased security risks, a company will have to define specific policies and procedures for governing its employees on the use of social media.
  
• Social media will become more exclusive and less general
  
  New social media will be less general and more niche-based, targeting specific group of audience or special interest groups (sports, jobs, music, etc). User behavior will change as more people will look for quality and efficiency rather than quantity.


• Businesses will leverage social networking tools to satisfy more business areas
  
  Besides marketing and advertising online, companies will use social media for customer support, recruiting and collaborating.
  
• Companies will rely more on web analytics for performance measurements
  
  Besides using web analytics to measure the effectiveness of its websites, business will also use such information to determine how well its staff (or which staff particularly) is supporting its customers and what competitive advantages it has over its competitors. Rating on websites by customers will also be more common.


• Mobile technology will be more integrated with social media
  
  Individuals will be relying on their mobile phones to connect to the web, and perform the internet functions via their mobile devices. The use of traditional emails as communication will become obsolete.


• More content aggregation in social media to improve efficiency
  
  Search engines will return more content and less links, thus reducing the time in locating information. An example is the partnering of Yahoo and Twitter to deliver Yahoo’s content into Twitter’s stream.

With these growing trends in social media, the questions are (1) Will the increased in demand of TV via Internet cause a more serious bandwidth issue? (2) Will the investment cost in social media grow exponentially due to demand for high-power equipment and the need for more secured information?

Sources:
Social Media Band Wagon Image.

Armano, David. "Six Social Media Trends for 2010 - The Conversation - Harvard Business Review." Business Management Ideas - Harvard Business Review Blogs. Web. 12 Apr. 2010.

Cashmore, Pete. "10 Web Trends to Watch in 2010 - CNN.com." CNN.com - Breaking News, U.S., World, Weather, Entertainment & Video News. Web. 12 Apr. 2010.

Diaz, Sam. "Yahoo and Twitter Partner to Mesh the Content from Both Worlds Between the Lines ZDNet.com." ZDNet Technology News. 23 Feb. 2010. Web. 12 Apr. 2010.

Tobin, Jim. "5 Predictions on The Future of Social Media Ignite Social Media." Ignite Social Media -- the Original Social Media Agency. 28 July 2008. Web. 12 Apr. 2010.

Tapping into the Power of the Crowd

The phenomenal growth in the popularity of social networks has expanded its user base from individuals to include businesses of various sizes. Millions of people spend hours eacy day on multiple social networking sites such as Facebook, Myspace, Twitter, and LinkedIn. Contemporary businesses quickly respond to this trend by integrating social networks into their marketing strategy to gain visibility, connect to their customers, promote their products and services, and improve their bottom line.

While knowing how to tap into these social networks effectively can greatly benefit smart businesses, the adoption of social networking tools into the workforce can also pose major concerns such as lowering productivity and raising security threats. Some potential benefits and threats associated with integrating social networks into a business include the following:

The Benefits:

• Expand online contacts by establishing an impressive profile, thus minimizing costs associated with advertising and marketing efforts.
• Reach out to people personally by encouraging them to connect and become friends. This also extends connections to their network of friends as well.
• Present an online image of a business that is innovative, reputable, and reliable.
• Implement market campaigns such as special promotions, important announcements, and directed web links.

The Concerns:

• Reduce overall productivity when employees spend too much time on social networks during work hours.
• Lower company morale when some employees have to cover the workload for those who are addicted to social networking sites.
• Create problems for IT administrators to deal with high level of bandwidth usage when employees visit those sites with audio/video interfaces.
• Introduce spams and infecting malware when using third party applications within the social network sites. E.g. Koobaface worms associated with messaging software.
• Damage the company's reputation when disgruntled employees make derogatory comments about the company or when they are found to view sites with offensive and illegal content.

Faced with the dilemma of embracing this new way of online communication and confronting major security threats, companies have to decide how much access, if any, to grant their employees. Is it better to ban access to all social networking sites altogether, or grant full and unmonitored access, or settle somewhere in between? It appears that the option favored by most companies is to strike a balance by offering their employees restricted access and setting limits on Internet use. In doing so, they must also equip themselves with the following measures:

• Install current anti-virus software in all computers
• Set up a company firewall to guard against unauthorized access
• Establish and enforce company's security and Interney usage policy
• Monitor Internet usage by the employees and monitor social networking sites
• Grant employees restricted access and monitor access using web filtering software
• Conduct web security awareness training to all employees

The scary thing is that recent Facebook's privacy changes allows sharing of its users' information with other pre-approved third-party applications so that our friends would know about us, not just through Facebook, but through other sites that have alliance agreement with Facebook. Even scarier is that government agencies including the FBI and IRS also use social networking to piece together information as part of their clues to chase down criminals.

The question is: Is our life becoming public just because we joined social networking sites?

Sources:

Internet Addict Image.

Diaz, Sam. "Facebook Fan Pages Get Boost with 'Social Engagement Hub'" ZDNet Technology News. 10 Mar. 2010. Web. 9 Apr. 2010.

Dignan, Larry. "Facebook's Privacy Changes: When Will It Go Too Far (and Will You Even Notice)?" ZDNet Technology News. 29 Mar. 2010. Web. 9 Apr. 2010.

Dignan, Larry, Sam Diaz, and Andrew Nusca. "FBI, Feds Collect Facebook, Social Media Data; Why Are You Surprised?" ZDNet Technology News. 17 Mar. 2010. Web. 9 Apr. 2010.

Kelleher, David. "5 Problems with Social Networking in the Workplace." Information Management. 6 Oct. 2009. Web. 9 Apr. 2010.

Online Marketing with Web Analytics

Recent web trend suggests that businesses need to adopt a more interactive and responsive web strategy in order to attract visitors and convert them into customers. The change in search engine methodology (such as Microsoft Bing) is requiring companies to have more contents in their websites in order to be searched. It is important for a business to understand how its users interact with its web application so that it can develop effective strategies for expanding its users interact with its web application so that it can develop effective strategies for expanding its user base and engaging its users.

Web analytics is becoming a crucial methodology and tool for companies to analyze their websites' performance and optimize them to achieve business success. Regardless whether the goal is to raise revenue, reduce sales expenditure, or increase visibility, a typical 5-step analysis process includes:

• Defining goals for what you want your website to accomplish
• Defining metrics for measuring these goals
• Collecting data to assess your current performance
• Analyzing the data to review the weaknesses and strengths
  
• Making changes to improve performance

Different types of business may collect different metrics for their measurements. Yet metrics are only good if they can be used for decision-making. The more valuable metrics are those capable of tracking the area of the application that the users spend the most time in. For optimizing sales, metrics such as pageview (which only approximate value) are less useful than the comprehensive ones like the average revenue per user (APRU) and customer lifetime value (CLV). Other frequently used metrics for measuring performance include bounce rate, visitor acquisition, trend of basic parameters, and search analytics.

Businesses often use evaluation methods to analyze its users' web behavior and improve conversion rates. These methods include:

• Perform 'split testing' to create different versions of your site and measure how user behavior is affected by the difference.
• Conduct a 'conversion funnel analysis' to calculate conversion rates across multiple steps of user engagement (e.g. from accessing the front page to the pricing page to the account creation page)
• Perform 'Click Tracking' to record every click made by a visitor and identify important links and buttons
• Conduct 'Event Tracking' to measure what the users do on your site
• Measure relevancy, not your ego so that you can focus on what is important to your business

AOL, in its effort to promote quality and increase sales, has incorporated web analytics into its marketing strategies. All of AOL's news editors have computers with analytics tools, social network feeds and Google's trend tracking service. This allows them to collaborate virtually and produce news remotely. AOL also monitors the web traffic in its site aggressively to determine popular articles so that it can focus on writing about subjects on demand. If its users seem to favor news about Hollywood celebrities and sports stars over the much valued "investigative news", then AOL would likely to make changes to meet its customers' need.

Imagine in the future, if web analytics reveals that more people prefer gossip columns and celebrities' drama over world news, then would that be all we get from the web? Further, as web technology continues to evolve, the effectiveness of existing metrics might be greatly reduced and new metrics would be needed for performance measurement. Does this mean we would have to continuously reinvent ourselves?

Sources:

Kirkpatrick, Marshall. "Anatomy of a Blog Post Well Received." ReadWriteWeb - Web Apps, Web Technology Trends, Social Networking and Social Media. 03 June 2009. Web. 03 Apr. 2010.

Lavenda, David. "Getting Started With Online Marketing." FastCompany.com - Where Ideas and People Meet | Fast Company. 2 Mar. 2010. Web. 03 Apr. 2010.

MacMillan, Douglas. "AOL Moves to Build Tech 'Newsroom of the Future'" BusinessWeek - Business News, Stock Market & Financial Advice. 21 Feb. 2010. Web. 03 Apr. 2010.

Sullivan, Laurie. "MediaPost Publications Microsoft Bing Sends Web Analytics Scrambling." MediaPost Home. 4 June 2009. Web. 03 Apr. 2010.

"The Death of the Pageview." ReadWriteWeb - Web Apps, Web Technology Trends, Social Networking and Social Media. 17 Mar. 2010. Web. 03 Apr. 2010.