Archive for November 2007

Casual Games=Engaged Players

November 28, 2007

The Casual Games Association released its 2007 report on the casual games industry this week. According to the release:

– Casual games are a $2.25 billion a year industry.
– The casual game market is growing at 20% a year.
– Over 200 million people play casual games each month over the Internet.
– Men make up 48.3% of casual game players, women 51.7%. However, women account for 74% of paying casual game players.
– Casual gamers who pay for a subscription and/or are community users average 7 – 15 hours of online play a week.
– Heaviest play times are right after dinner from 7pm – 9pm and during lunch from 11am – 2pm.
– The majority of online portals feature catalogs of over 1,000 games and add between 75 to 300 new games to their catalogs each year.
– Casual games are usually played for a short period of time increments, from five minutes to 20 minutes–though it’s common for people to play one game after another for many hours.

The Association further reports that the most popular casual games worldwide are:

– Solitaire (Microsoft Windows XP)
– Tetris (Tetris Holding, LLC)
– Bejeweled (PopCap Games)
– QQ Games Collection (Tencent China)
– Diner Dash Franchise (PlayFirst)
– Mystery Case Files (Big Fish Games)

A number or interesting articles have since appeared about the space. Jane Pinckard had a good industry overview at GigaOm. Despite these space’s diminutive size compared to the gaming enthusiast market (think World of Warcraft and Xbox Live) which takes in more then $20B a year, Pinckard’s analysis confirms that “casual gaming is an area of enormous potential for the gaming industry…if only the industry can avoid some potential pitfalls along the way.”

Meanwhile, Venture Beat writer Chris Morrison addressed some of the future technologies ahead in the space, including users’ ability to embed games on their social network pages, or to upload their own photograph or image into the game, and play the game with that image standing in for their character.

Troy Wolverton at the Mercury News (registration required) had a piece on new business models in the casually gaming industry.

I’ll focus on the advertising opportunities around casual gaming. Like the majority of other forms of “free” content on the net, causal gaming is subsidized by ad support. Much to our surprise, when we first launched SpotXchange a year ago, two of the earliest publishers to sign up were casual gaming networks. At least a dozen additional sites have since joined SpotXchange, carving out a strong niche in a field focused mainly on ad support for in-stream video. Implementations include “pre rolls” to the game starts, as well as “mid rolls” that are offered between game levels or rounds or deals of the cards.

In retrospect, it makes sense: casual gamers are on broadband connections, they are focused on the activity and engaged with the UI. Furthermore, they seem happy with the ad supported model. A Macrovision study conducted earlier this year confirmed that casual gamers themselves express broad support for advertising, finding that “8 in 10 are willing to view an ad in return for free play.”

Since video ads generally earn exponentially higher CPMs than their banner counterparts, it seems appropriate that the game publishers would pursue this newly-available, higher CPM ad unit. Happily, we’ve observed that the niche is likewise a win for advertisers. Casual gaming channels in our network consistently generate strong click thru rates, demonstrating that gamers not only support, but are engaged with the ads. More than one casual gaming channel last month had an overall CTR of greater than 5% for SpotXchange-delivered ads, which is extraordinary.

Breaking the market down further, analysis of our traffic numbers show that whether the games are played online or downloaded and played locally, the ads perform comparably. Gaming sites that require a user to complete a profile sometimes break their SpotXchange channels into male and female audiences. Based on our measurements, the female channels query our network for ads three times as frequently as their male counterparts, suggesting that the male/female split, at least in some channels on our network, is more heavily female skewed than the balance suggested by the Casual Gaming Association’s figures.

If you’re an advertiser interested in this engaged, largely female audience, log into your SpotXchange advertiser account and search the marketplace for casual gaming. You’ll then be able to review all the channels in that category and make your own selections. You’re sure to find an opportunity that meets your needs, and likely to enjoy a strong campaign performance when your ad runs on your selected sites. Alternately, you could target your campaign run-of-site against the gaming category, and it will run against all channels within the casual gaming category.


Greg Sterling Interview

November 19, 2007

greg-sterling.jpgAs video advertising on the Web heats up SpotXchange President and CEO Michael Shehan talks to former Kelsey Group Analyst Greg Sterling about how local advertisers can leverage the channel.

Michael Shehan: Analysts are saying that local video ads should generate $5B per year by 2011 from the projected $371M in 2007. That would be going like from one to 100mph in one second, how does this happen?
Greg Sterling: Forecasts are often aggressive to get attention for the firms generating them. They tend to make the numbers touch the outer envelope of the credible and compress time frames accordingly. However, brand advertisers and even local businesses are very interested in video for many reasons. It performs better than traditional display advertising. And display advertising is the fastest growing online ad segment. So online video advertising will certainly grow. Whether it will reach the projected $5 billion in the time frame above is another question.

MS: Who are going to be major players bringing local advertisers into online video advertising? Yellow page companies, search engines, and/or smaller interactive shops?
GS: All the yellow pages publishers and some independent sites. Then there are also the direct-to-merchant vendors such as Spotzer and SpotRunner, among a few others. But mostly it will be existing sales channels that have SMB advertiser relationships.

MS: Are there certain local small businesses like plumbers, restaurants and auto dealers that are more appropriate for online local video advertising?
GS: I suppose that where visual information is essential to the consumer purchase decision that would make those categories of businesses better suited to video. However, the additional information that video conveys and the emotional impact of video makes it more effective than simply having a profile or text ad regardless of the category.

MS: As yellow page companies have proved, you have to make the business proposition very simple to small business advertising. So what business model will dominate for local online video advertising–cost per click, cost per impression, or something else?
GS: We’re in a period of experimentation and more than one model will exist in the marketplace. Citysearch uses a model that “throws in” video if an advertiser spends a certain amount of money. uses a flat-fee model and Superpages is using a per-stream, performance-based model. 

MS: Are there any lessons from the past in the yellow page space that can be applied here to this emerging space?
GS: You mentioned simplicity. That’s key for the sales rep and for the local business. That’s the primary lesson. Also having a cost-effective but professional way to produce these ads is critical. Syndication is another important lesson. This is what the yellow pages eventually discovered they had to do with their PPC ads and profiles in order to build more views and clicks–get the ads to where the consumers were rather than expecting all the traffic to come to their sites.

Case Study: 1408 Online Video Ad Campaign

November 19, 2007


12-day program
Start: 9/27/07
End: 10/8/07
Street Date: 10/3/07
Creative: Pre-Street, “Available Tuesday on DVD,” 9/27-10/2; Street, “Now Available,” 10/3-10/8

Total Video Impressions Delivered: 714,682
Total Companion Banner Impressions: 555,739
Click Through Rate: 1.51%

How did we do it? 
Matches were narrowed by publishers who accepted 15 second ads and 300×250 banners.
Data collected in the campaign’s early stages enabled optimization that powered the campaign’s success.

Campaign inventory
Casual gaming sites, pre-game ads
Video sites, in-stream ads


“Under a short timeline, SpotXchange delivered quality video and banner impressions for our DVD release campaign. Their targeting and optimization capabilities helped us drill down and reach an engaged and relevant audience.”   Michael Radiloff, EVP Marketing, Genius Products

It’s Time for a Back-up Plan

November 19, 2007

writers-strike.jpgThe WGA writer strike ended its first week with no signs of concession, leaving marketers wondering: How will this affect television viewing habits and their primary medium for reaching the masses?

In a Reuters article published Nov. 11, “Writers strike could mean big changes in advertising,” Lisa Herdman, vice president of network programming at RPA said, “I don’t know how long it will take, but viewers will start to go to other places, and we as advertisers have to follow them…Whether we will go back to TV is another question altogether.”

Network television is the long time media favorite for reaching the masses, but if television as we know it is forced into full-time reruns and reality programming, will its already fickle audience stick around?

In the Reuters piece, Jack Myers, television industry vet and editor of said, “The fact that so many new prime-time shows are struggling to find an audience, and now you’re going to take them off the air for who-knows-how-long, the odds are that even the audiences they generated for the last several weeks are just not going to come back.”

Daily Variety’s article, “Late night tout is out,” reports that nearly eight percent of the television audience vanished during the five-month 1988 writers strike, never to return. The article also says that 2007 fall television viewership is down.
Without the late night talk shows the studio publicity departments have lost a primary media outlet for stars to talk up their latest movies. Currently all five shows are on hiatus. Staff at “The Tonight Show with Jay Leno” and “Late Night with Conan O’Brien” were given two weeks notice of pending layoffs. These shows are a key ingredient to marketing films as stars are given the opportunity to engage the viewers. The article says, “So there were fewer opportunities for the all-star Cruise-Redford-Streep team to persuade the public that “Lions for Lambs,” which opened Nov. 9, is as engaging as it is cerebral. Should the strike last, Tom Hanks won’t have as many outlets to explain to filmgoers why they should become emotionally involved in “Charlie Wilson’s War,” yet another war film.”

Hollywood movies are not the only marketers that use late night talk shows to engage audiences, politicians, musicians and charity organizations also leverage this platform.

Daily Variety’s, “Networks go to backup plan,” published on Nov. 9 reports, “…a few months ago, as a strike became more and more likely, pilot development kicked into overdrive. Nets started handing out put pilot commitments, and even series orders, like they were candy.” Fortunately, there are lots of scripts ready for production and in a worst-case scenario, the studios can re-shoot old television series, but will the television audience still be around to watch?

The other less-talked about challenge is the June 30 expiration date on both the Screen Actors Guild and the Directors Guild contracts, so even though scripts are in the bag, there may not be enough time to shoot them all before a next round of strikes hit and there are no thespians, directors or crews to work the shoots.

With the networks and studios now implementing their “back-up plans” marketers are still left bearing the risk of underperforming television buys. When a show underperforms, networks generally offer make-goods to cover the deficit and make a media buy whole in terms of audience reach, but what if those underperforming shows are only followed by more underperforming or worse, lackluster shows? Combine this with the fact that most networks boasted increased advertising rates during the 2007 upfront season and that 2008 is an election year and we may see the makings for the perfect marketing storm. How? If ad rates are up, then marketers are paying more per ad, thus increasing their per unit risk, politicians are known for paying extremely high rates to ensure premium ad placement, further driving up rates and marketers are faced with the possibility of lackluster television programming.

 If it is time to hedge bets in the marketing world, then now is a great time to start seeking out alternate advertising avenues to television, and by that I do not simply mean reallocating ABC’s network television commitments to That is ridiculous because theoretically marketers are reaching the same audience. Rather, shave some money off of the overall ABC commitment to try out different, measurable outlets. For example, the ad networks, but not just any ad network, use the one or few that make the most sense for the brand.

Marketers need to get comfortable with the long tail. Just like cable television in the early 1980s, the Web’s vast array of channels offer marketers endless opportunities to engage with consumers, via DIY videos to World of Warcraft cheats to user-generated content. There are some far reaching corners of the Web that when aggregated deliver a diverse, yet untouched audience. Many ad networks, SpotXchange included, do a great job of making those corners of cyber space readily and easily accessible. Keep in mind that not every guy is an NFL fan and not every little girl likes Hannah Montana, so don’t be afraid to engage the audience that veers away from the mainstream.

Commentary: SpotXer Justin Ehly Comments on Performance of Video Ads vs. Banner Ads

November 11, 2007

jman.jpg With all the talk last Friday about the Google-MySpace partnership and the fate of Facebook’s ad program, I want to comment on an online ad platform that is not only underused by current media plans, but also under realized in terms of effectiveness, streaming video.

At SpotXchange ( ), we work with a variety of clients and like many a new media we do our share of direct response and performance based ad campaigns. I read a snippet in Friday morning’s trades that quoted a BusinessWeek article with, “the truth about online ads is that precious few people actually click on them,” and went on to discuss the industry average CTR on banners is less than .2%, and one thing really jumped out at me, SpotXchange on a bad day delivers a 1% CTR, that is 5x the industry’s average banner CTR! Now we obviously don’t work in a vacuum, but it appears we deliver a more effective ad unit, and that translates into engaged consumers!

We deliver in-stream video ads that are only played when a consumer (a person sitting a computer) tries to watch some type of video asset or is taking a break during a casual online video game, i.e. Solitaire or Diner Dash. Our ads are front and center, cannot be skipped and albeit somewhat intrusive, we are in and out of the consumers life in about 15 seconds. To sweeten the prospect of our video inventory, most of our video is pushed into cyberspace accompanied by adjacent banner ads, so anything that is not covered by the :15 second spot can be made-up in the banner, i.e. local market specials for national retailers and concert promoters. Since banner creative can often be edited faster video creative, if a campaign neglected to include a call to action in the video ad, banners can be quickly edited and deployed across our network.

We recently worked with one of the Hollywood studios to promote a DVD release and in order to prove the power of the SpotXchange network we agreed to run a cost per click campaign. Through real time optimization and content targeting, we delivered a bottom line CTR of 1.5%, but the client did not have any call to action in either the video or the banner, so we [SpotXchange] were left to the online savviness of consumers who saw the ads and clicked on the video and/or accompanying banner. By call to action, I am referring literally to verbage saying “click here for more information,” or, “click here to order,” rather the video creative was repurposed from the client’s television campaign. Overall, we performed on par or better than the other online outlets the studio used and we only ran the spot on a handful of our publishers. Moving forward we are working with the studio to capitalize on unrealized campaign effectiveness by using calls to action and we are looking at going broad and deep by blitzing the entire network then using the SpotXchange controls to optimize campaigns for maximum CTR efficiency. By optimizing, I literally mean picking off the publishers and/or publisher channels that do not meet a minimum CTR threshold established with the client.

An advantage to the SpotXchange network is the casual gaming community. Companies such as Neoedge develop systems to push video ads into natural breaks in game play, i.e. when you start a new game of Solitaire, before the cards shuffle the consumer is asked to watch a :15 commercial from a sponsor. Think about this audience, this is an audience that is simply wasting time! Sure they are having a good time playing a game, but if something more interesting pops along, they are very likely to check it out and because of this we have exceptional CTRs with our online casual gaming partners. Even more interesting is that this audience is very active from 8a-2p, tends to be heavily female skewed and has a high propensity to have children in the home. Any advertiser looking to reach a female skewed audience in a family friendly environment should make great use of this inventory. This includes the studios, grocery store chains, packaged consumer goods and cosmetics. Further, the SpotXchange tools allow for day and time specific advertising, so campaigns can be set up to run heaviest during the 8a-2p time frame.

Now, there are still those advertising professionals that feel that pre-roll video ads are intrusive and annoying to the consumer. So how do we combat this? There are a number of things that need to happen. As an industry we need to remind consumers that nothing is free, not even all those fun user generated videos on Metacafe and YouTube. At some level, someone has to pay for storing and serving all those videos and more importantly, protecting all the personal information that users openly give to such sites. In order to offset such costs, advertisers are invited to the table to buy sponsorships, promotions and creative ad inventory.Creative needs to enhance the online experience. In fact, last week there was an article in the trades where the author suggested that advertisers need to look at their creative as an extension of the online user [consumer] experience. For example Budweiser and Bud Light commercials ( or ) are some of the most memorable ads in existence! Remember the frogs back in the early 90s or the, “I love you man,” series in the mid-90s? Or the most recent ESPN promos featuring the notorious college football rivalry between Ohio State and Michigan ( ), this creative is not only memorable, but it’s fun and entertaining and at the same time it makes the consumer want to engage with the brand. In fact, the ESPN Commercials were viewed 83,069 times when I wrote this blog and those impressions were not only gratis, but consumers actually sought out the video, talk about engagement!

As for those ad professionals that are proud of being rebellious and closing pre-roll video ads, I like to ask them how many different websites they have to visit in order to find what they are looking for [video-wise] without having to watch a pre-roll ad. If they have to visit 10 different websites to watch whatever video they are after and all 10 of those sites use pre-roll, do they keep going on to site number 11, do they give up and not watch the video, or do they give in and watch the ad?

Attention SpotXchange Publishers: New Enhanced Channel Management Tools – Pushed November 8

November 10, 2007

We just completed some new functionality that will enhance your visibility among advertisers in our network and allow you to provide additional information about the specific advertising opportunities your properties offer.

You will notice these enhancements when you create a new channel or edit your existing channels.

  • Media Kit – You can now upload a media kit—advertisers will have direct access to this document to help them make more informed decisions about your offering.
  • Channel Image – You may likewise upload a thumbnail logo that will be used to graphically represent your properties in the SpotXchange marketplace.
  • Enhanced Demographics – We have made the demographic profiles more comprehensive for advertisers. Publishers can now provide detailed demographic information about their audience, and designate which 3rd party measurement service (e.g. – comScore, Quantcast, etc.) provided the information. While this field remains optional, you are encouraged to complete it to the extent that you have user demographic data available—we have found that advertisers frequently turn to this type of information to guide their purchasing decisions.
  • Ad Filters – There are several new content filters that you can apply to your channels to exclude additional unwanted ad categories: sweepstakes, religion, land based casinos and dietary supplements.
  • InStream Ad Slot Position – To further help advertisers target their campaigns, you may now specify if you are showing instream ads in “pre”, “mid”, “post”, or multiple positions.
  • InGame Ads – We have separated “casual gaming” advertising opportunities out into a distinct ad type, to better call attention to this growing niche in our marketplace. If you are a casual game publisher or network, you will want to update your profile to reflect that your channels represent casual gaming opportunities.
  • InnerStream Ads – Publishers can now apply to serve our new overlay ad, called InnerStream, that we plan to launch later this year. Stay tuned.
  • Network Bids – Finally, you are now able to set minimum CPM limits to ads targeted across network, separately from the minimum CPM you set for ads targeted specifically to your channels. By way of example, while you might want a $10 CPM minimum for ads specifically targeting your SpotXchange channels, you may be willing to accept an ad targeted to Wisconsin that runs across our network, at a CPM of only $5. This lower value ad would only be shown to your users from Wisconsin.

I encourage you to login and update all these new fields in your channel profiles at your earliest opportunity. Feel free to ping me if you have any questions.

SpotXchange CEO to discuss paying for performance in online video advertising at OMMA Video in Hollywood

November 5, 2007

What: Michael Shehan, president and CEO of SpotXchange, the first online video advertising platform to allow advertisers to leverage the power of broadcast advertising on the Web will present at OMMA Video in Hollywood on November 14, 2007.

Shehan and fellow panelists will present, “Paying for Performance” a discussion about how performance is reviewed and measured in online marketing and how those metrics will be used to translate success in the world of online video advertising.

SpotXchange representatives will also be available in the expo hall during show hours to discuss the issues surrounding online video advertising. SpotXchange demonstrations and interviews with Shehan can be arranged prior to the event.

Where: OMMA Video
Roosevelt Hotel
7000 Hollywood Blvd., Hollywood CA 90028

Who: Michael Shehan Founder, President, Chief Executive Officer, SpotXchange

When: Paying for Performance
Wednesday, November 14, 2007
2:45 p.m.

Contact: Valerie Quintanilla

About SpotXchange
The SpotXchange patent-pending platform is the Internet’s first self-service exchange for online video ads. The company is wholly-owned by Colorado-based digital marketing and technology company, Booyah Networks. In 2006, Booyah Networks ranked 23rd on Inc. magazine’s list of 500 fastest growing companies. The company has offices in Westminster, Colo., Los Angeles and New York. Clients and partners include ClipSyndicate, Voxant, Blinkx,,, NeoEdge, Visible World and others. Visit SpotXchange online at