Social gaming ad spending soaring to $220M

Ronny Kerr · August 11, 2010 · Short URL: https://vator.tv/n/1115

By 2011, advertisers will be spending $293 million on social game marketing, says eMarketer

Ad Spending on Social Games and Applications, 2009-2011

Everyone knows the social gaming sector gets a little bigger everyday, as 2010 increasingly looks like the year that playing games on social sites and platforms truly went mainstream. One easy way to determine the market's success is to look at how much advertisers are willing to spend to tap into that market.

This year alone, businesses will pay $220 million to advertise on social games and social applications, according to eMarketer, which admits that its figures may actually be conservative. By 2011, marketers might be spending $293 million on social game advertising.

eMarketer did not take into account mobile applications.

Facebook COO Sheryl Sandberg said recently that advertisers have increased spending on the social network by at least tenfold in the past year. Seeing that Facebook has over 500 million users, a statistic that climbs significantly with each passing quarter, no one should be surprised at advertiser spending.

Zooming in on social games and applications specifically, Zynga, the largest social gaming company, registers 230 million monthly active users playing its games. Playdom, which was recently acquired by Disney, gets about 38 million monthly active users. And Playfish, acquired by EA late last year, says its games have been installed 200 million times. Even SGN, a mobile social game developer for iPhone and iPod Touch, says it has registered 18 million downloads of its games. And we haven't even begun to look at the countless smaller startups and businesses designing games for social networks.

In fact, I wouldn't be surprised if it had been the rise of social gaming on Facebook, above and beyond all other kinds of applications, that forced Google to realize that the formerly immature collegiate network had transformed into an indomitable online force overnight. As Google pulls in most of its profits from advertising, the triple-digit figures in social gaming advertising could not been left overlooked for too long.

The real question is how high can social gaming advertising spending soar.

Ronny Kerr

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Related Companies, Investors, and Entrepreneurs

Zynga

Startup/Business

Joined Vator on April 14, 2009

Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users. Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist. The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel. Zynga is headquartered at the Chip Factory in San Francisco. For more information, please visit www.zynga.com.

Playfish

Startup/Business

Joined Vator on April 30, 2008

Playfish is a social games company that creates games for people to play together.

Founded in October 2007 by casual and mobile games veterans and backed by $3M in seed funding, we believe games are more fun when played with friends and family. So we are working on combining the best elements of casual games, social networks, MMOGs and virtual worlds to create entirely new, more social ways of enjoying great games together.

Traditional computer games focus on standalone game play on consoles, your PC or on your mobile. Games that do allow you to play together with others online normally require you to buy the game, go online and try and find like-minded new friends who are also playing the game. This is something that usually only the most dedicated gamers are prepared to do.

Our social games are different. Social games allow you to play together with real-world friends and family using the infrastructure built by social networks. This is in some ways a return to the roots of games. You play with the same people you would play cards, board games or go bowling with in the real world. Sharing the game experience with friends makes it more compelling and fun.

At Playfish we believe social games are a big part of the future of the video games industry, and are working hard to be the leading company in this emerging sector.

Playfish is headquartered in London, UK with offices in Beijing, China and Tromsø, Norway.