Behind Twitch’s Transformation

“If you’ve never played a videogame before, Twitch is probably not for you,” he said. 

Twitch, the video streaming website, allows a fraction of users broadcast or record themselves playing video games with a global audience of millions watching live broadcasts has hit a big landmark recently. The site is a hotspot for gamers and other young people between 15 and 35.

How the company got to this point is an interesting story.

Despite being friends from Seattle prior, co-founders Emett Shear and Justin Kan first began working together as classmates at Yale University in 2005. While there they developed and launched a calendar startup known as Kiko. The startup, which aimed to combine the power of Microsoft Outlook with the modern web sensibilities of Google’s then-new email product Gmail, disappeared in less than a month, struggling to compete with Google’s release of Google Calendar.

Along with Google’s immense amount of clout and resources, the young co-founders realized something else that contributed Kiko’s dwindling – neither of them were heavy calendar users themselves and neither of them had the know-how to find any power users for feedback.

“One of the things I’ve learned the hard way over the years is that you should use your own product,” said Kan, now a full-time partner at Y Combinator.

14 months later Kiko’s scraps were (surprisingly) sold on eBay for $258,000.

“We thought we had hit the lottery,” Kan said, after reportedly expecting no more than $50,000 from the auction. “Maybe startups were not so bad after all.”

This kept the duo going until they came up with an idea that Y Combinator founder Paul Graham was willing to invest $50,000 to make happen: A reality show called Justin.tv, devoted to broadcasting Kan’s life on the Web, 24/7.

In early 2007 the show Justin.tv began broadcasting. The show immediately scored major headlines. Kan even made appearances on NBC’s The Today Show and ABC’s Nightline.

“If we had any success with Justin.tv, it’s because we were our own user,” Kan said. “We knew what was important because it’s stuff we wanted.”

The site opened up to other broadcasters in October 2007. Three years later, Justin.tv had raised $7.2 million in venture capital and was claiming some 31 million unique users per month.

In late 2010 the company tried to expand itself even further by working on two projects known as “skunkworks.” One project would spin off into an Instagram-for-video startup called Socialcam, which sold to Autodesk for $60 million in 2012. The other, a taskforce led by Shear to grow the audience for videogame content on the site, would become a new site called TwitchTV.

“It’s kind of counterintuitive, right ” Shear said. “You want to be as big as possible as a startup, why would you pigeonhole yourself in just one kind of content It took us a long time to realize that was a good idea.”

TwitchTV (now known as Twitch) has undoubtedly outpaced its predecessor, raising $35 million in VC funding over the past three years, and maintaining 45 million unique viewers per month by the end of 2013, up from about 25 million when the year began.

Justin.tv, however, has faded. According to Alexa, Twitch is the 249th most popular website in the world while Justin.tv is number 3,168. In February, Twitch became the name of both sites’ corporate parent.

As for what’s next, Shear said most of the company is heads-down on improving video streaming quality and speed.

Entertainment trade publication Variety has recently reported that YouTube may buy Twitch, the three-year-old video site, for more than $1 billion. Twitch declined comment on those reports for Re/Code.

 

Source: Re/Code

Airbnb Versus Cadillac

Airbnb Founder Brian Chesky recently posted an article on Medium about the most important piece of advice he has ever gotten when building Airbnb: Don’t fuck up the culture!

The advice Chesky got came courtesy of Airbnb investor Peter Thiel, after the company pocketed some $150 million from his Founders Fund. Why is this important advice for any growing business?

Chesky puts it this way: “Our culture is the foundation for our company… The culture is what creates the foundation for all future innovation. If you break the culture, you break the machine that creates your products.“

A clear and well communicated company culture speaks to how empowered the employees feel to innovate as well as how likable the brand is in the eyes of the consumers. This is where storytelling comes into the picture, because behind the logos are real people with real stories to tell. People that we can then chose to like or dislike. If the culture is strong enough, users will become fans and tell their own brand stories and do your marketing for you.

Airbnb have so far put community and usability front and center in their content marketing and hopefully they’ll use real hosts and guests in their future ads as well.

Sure, there has been a backlash to Airbnb’s business model, but it has enough fans to back them up for the long run and that’s why Peter Thiel invested in them.

A different school of thinking is represented by Cadillac in their recent ELR electric car campaign that ran during expensive Olympics spots as well as during the Oscars.

“Why do we work so hard? For what? For this? For stuff?” asks actor Neal McDonough as he gazes out over his pool and then goes on to give his take on capitalism and the American Dream: “Other countries, they work, they stroll home, they stop by the cafe. They take August off. Off. We’re crazy, driven hard-working believers. Those other countries think we’re nuts. Whatever.”

If you’re in marketing, you’ve probably seen the commercial already, if not, here it is:

{video link marked as “private”}

Five Questions With Matt Bretz

There’s a new VP and creative director at Ayzenberg. We are pleased and excited to have Matt Bretz on board. Matt will be working closely with the [a] team on strategy, creative, digital, social, original content and paid media. Whew.

Matt comes to us from his former post of seven years as executive creative director at Ant Farm with work ranging from writing, directing and producing television ads, trailers and more for an array of clients like Disney, YouTube and Xbox. You may have seen his launch advertising work for Xbox’s Kinect Sports Rivals, ‘Deadliest Catch’ on the Discover Channel and ‘Fallout 3.’

We drilled Matt on his stance on Facebook, whether he prefers coffee or tea and just how excited he is to join us. You may just spot him around at Game Marketing Summit this week, too.

What is the most exciting thing to you about joining the ‘berg?

What’s most exciting to me about joining Ayzenberg is the visionary leadership and robust infrastructure. Eric Ayzenberg has always stood out to me as someone who can see into the future of advertising and the partners he has assembled are equally savvy. I’m really thrilled about teaming with Gary Goodman on creating video. Personality-wise, we’re discovering that we are kind of the same guy but our taste in games and strengths as storytellers are more complementary. Wonder Twin powers activate! With Stu Pope at the helm of the design team we’re being captained in the print and digital space by a true ad man in the best sense of the term. He has the classical conceptual training to tap into those basic human wants that drive consumption and he’s stayed at the leading edge of digital innovation, so he can make memes like a Mad Man. I’ve been crossing paths with Chris Younger at trade events for years and his poise and wisdom has always astounded me. For me, great creative is important — but it’s meaningless without even greater customer service. Chris has put together a client’s dream team of account managers.

To have Vincent Juarez offering media buying that is developed in synch with creative is just genius–  I don’t know why every agency doesn’t do it, but they don’t. Add Rebecca Markarian’s leading edge social marketing to the mix and there is just nothing else like Ayzenberg in the landscape right now. We are a nimble, economical and incredibly creative team that can help any client find their market and tell their story across the perfect array of media to sell product and add value to the lives of their fans. That’s what’s most exciting to me.

Are you a big gamer? What are you into right now?

I am a big gamer. For more than a decade now I’ve been playing every game I advertise. Of course, because I need to play them all, and still have time to play with my 11 year old daughter— as well as dance with my beautiful wife — I don’t get to complete a lot of them. So perhaps a survey of the ones I have completed is a good sign of what kind of gamer I am. I’ve played all the console releases of Fable top to bottom. Love ’em. Same deal with Alan Wake. Loves me some Remedy Games. Limbo— amazing! So proud to have beaten it. And right now I am addicted to the Telltale Games. I’ve played every chapter of Walking Dead and Wolf Among Us.  Let this be a heads up to publishers— if you want dads to play your games, deliver them in chapters that we can play after hours Scotch in hand without staying up all night.

 What is your stance on Facebook?

I love Facebook. I use it essentially as a templatized blog for friends and family. I’m very judicious about whom I accept as friends. I have to really know you or want to know you. Once we’re friends, I assume that we want to know what’s up in each other’s lives and I post regularly. I use it as a tool to share what I care about… what I’m thinking about… even just great deals if they pass under my nose. I set my news feed for chronological and just skim it all the time. I don’t get worked up about friends who use it for different types of postings— I just skim over and I hope people do the same for me. I also use Twitter regularly (@bretznikov) but this is a more public and professional forum to me. And my tweets tend to have clearer calls to action– “you should check this out or go here… see this.” That kind of thing.

Coffee or tea Netflix or Hulu? Okay, that’s two questions in one…

Coffee and Netflix for me. I grew up a coffee drinker. I could still drink a pot in bed at night with a good book and fall asleep when I’m done. I’m a big documentary fan. So I’ve gravitated to Netflix because they seem to have devoted more attention to aggregating indie movie content including— but not of course limited to, docs. Oh, and yes, I got hooked on House of Cards.

What’s on your hidden Spotify playlist?

Well first of all, I’m Pandora. I have Spotify. And I will use it when I’m in search of a specific artist. But generally, I’m looking for music discovery. And I love Pandora’s algorithm. I can’t tell you the number of times I’ve found great music new and old by starting a playlist with one artist and having Pandora push me another. I don’t hide much about myself so I’ll just tell you — there’s a ‘Naughty By Nature’ channel there.

TV’s Digital Anxiety

Most of the current institutional broadcast powerhouses will not move easily into the new digital paradigm. We’re seeing that everyone from the cable companies to the established networks are using their mighty capabilities of lobbying, extensive financial resources, slanted news stories to name a few, to delay what is the inevitable shift to online distribution.

However, their reluctance to change this model is not unwarranted. The TV business model has worked exceptionally well as a bold revenue driver for these media companies. TV advertising was a $74.5 billion business {link no longer active} in 2013, but recent numbers show that digital advertising surpassed Broadcast TV for the first time in 2013, with $42.8 billion in revenue compared to $40.1 billion.  Times are changing and TV is getting with it.

Vince McMahon wants to place a bet on “over the top,” or “OTT” TV. OTT being the industry term used to describe a network that doesn’t use intermediaries like cable companies and satellite operators to distribute. They use such avenues as iTunes, the Google Play Store, Xbox, PlayStation 4, Netflix and Hulu to name a few. Take the immense power of the digital media — the same one that lets every person be a media company — and give it to a risk-taking juggernaut and looks to innovation as a way of bypassing existing standards and conventions. McMahon is known as the pay-per-view pioneer, making a fortune off an innovative new way to distribute content on TV, so it makes sense that for him, a swift adaptation to OTT was a given.

The WWE Network now lives on a site these days. It costs $9.99 per month for a 6 month membership and provides access to all 12 yearly pay-per-view events, a library of all past matches available on-demand, new shows and 24 hours of daily programming. According to their latest reports, the WWE Network has 667,000 online subscribers just 42 days after launch, earning $40 million for a 6 month period. They need about 1 million subscribers to break even on the project and they are certainly on their way. While not stellar, it’s a strong launch. By comparison WWE’s Raw show yields a weekly 4.37 million viewers. Historically, television rights fees approach $170 million annually, a high figure that WWE is unafraid to cannibalize by going OTT.

Consumers are adopting a myriad of expanding OTT video options: solutions that are provided by new entrants into the market like Netflix and traditional media companies hedging for a foothold in the new video consumption ecosystem such as Hulu, NBC, ABC, and Crackle and a disparate number of technology companies like Apple, Google, Amazon and others. In addition, a report from Business Insider {link no longer active} estimates that 53 million US households will own connected TVs by 2016, accounting for 43 percent of households. Streaming notables Netflix ended 2013 with a total of 44 million subscribers and Amazon Prime currently has 20 million subscribers.

The big TV networks and video focused digital companies are already providing consumers multi-platform viewing options. Viewers can install apps from NBC, ABC, CBS, Crackle, Funnyordie and Hulu and take “TV” on-the-go.

Mobile is a key player in the disruption of the TV business and the push to programmatic TV. Business Insider’s Mobile Video Content {link no longer active} report shows that 15 percent of all online video hours occur on a mobile device. The infamous YouTube Channel Machinima sees 50 percent of its video views come from mobile devices while 5 percent of Netflix’s traffic comes from mobile devices and YouTube sees an overall 18 percent.

A particularly disruptive technology is currently being heard in a Supreme Court case. Aereo is being sued by big broadcasters because of the method by which the company distributes TV signals. Paying no rebroadcast fees to the TV networks whose content they distribute, Aereo uses clusters of tiny antennas that stream signals into the cloud for storage. Paying subscribers, one hundred thousand currently in New York, are sent the TV signal. If Aereo wins the case, Les Moonves, CEO of CBS, stated his intention to stop over the air distribution and instead focus more on internet distribution methods. Certainly other networks would follow suit.

Troubled relationships between cable companies and content providers have affected the end consumer’s TV viewing experience. These challenges abound in a time where cable companies are getting increasingly worried about losing favor to online distribution. In August 2013, Time Warner Cable sparred with CBS {link no longer active} over broadcast rights and carrier fees. While the deal was negotiated, 3 million subscribers in Los Angeles, New York City, Chicago, Detroit, Denver and Dallas lost all CBS channels, including Showtime and CBS Sports Network for about a month.

Time Warner Cable recently paid the Los Angeles Dodgers $8.5 billion in a 25 year deal to carry the Dodger-owned SportsNet LA.  Competitors DirectTV, Cox, AT&T, Verizon and Dish have not agreed to terms with Time Warner Cable, who all claim the high cost of carriage is out of line.  As of Dodger’s Opening Day an estimated 70 percent of Los Angeles’ TV market cannot watch their home team from home.

Image from Ad Exchanger

All this change in media delivery and consumer viewing habits will change the way advertisers do business. Enter programmatic TV.

The programmatic approach uses data on a scale that humans can’t handle and turns it into actionable ad serving decisions. We are talking about synthesizing billions of data points daily among ad impressions, clicks, revenue, audience behavior, audience profile data and more.  The programmatic approach is redefining advertising. This new operational aspect of advertising is one of two main paradigms forming the new world of media activation. The other is the native advertising/content marketing/influencer marketing construct where highly customized and ultra-high value ads are crafted in a very high touch process.

The key to this entire endeavor — applying the programmatic approach to TV buying — are 2 points: first, TV media needs to be redefined, and second, it needs to look and act more like digital media. It’s these new distribution methods that lead into the second point. The guts and operational aspects of these new channels are built on digital media systems. The same delivery, data, tracking and analysis methods that web publishers use will become the de facto method of operating an OTT channel.

Editorial Note: This piece is part of a 4 part series from Director of [ion] and [a]list contributor Robert Brill. The series intends to look at the future of programmatic and data-infused TV buying as well as its connection with influencer marketing with predictions about how this will change the media landscape. To read last week’s piece, go here.

An Influencer’s Empire

Editorial Note: This piece is part of a four part series from Director of [ion] and [a]list contributor Robert Brill. The series intends to look at the future of programmatic and data-infused TV buying as well as its connection with influencer marketing with predictions about how this will change the media landscape.

These Days, Everyone’s An Influencer

At Ayzenberg Group, we look carefully at the sphere of influencer marketing among the larger set of opportunities surrounding content marketing and native advertising. We see that individual users– not just channels, networks, companies or multi-national media conglomerates can now wield significant power. There are no longer the kinds of insurmountable obstacles like unattainable distribution channels or costly equipment to keep you out. In fact, it’s arguable that these former power holders are now bowing control in tiny increments to influencers and their networks. All kinds of evidence of this can be seen now from Warner Bros’ investment in Machinima to Disney’s purchase of Maker Studios and this piece about the top ten YouTube stars. It is all wrapped around the democratization of media that has been enabled by technology.

Here’s How it Happened

Inexpensive consumer technology paired with a rapidly expanding communications system resulted in today’s always on and always accessible media environment. With the likes of YouTube, Facebook, Twitter and other social platforms, the end user has a built-in distribution network. Computer, mobile and video tech allows for low cost content creation, and subsequent collaboration and editing of that content.

Anyone with ideas has the ability to create content in their own voice. These users become akin to individual media companies and can build significant media empires earning millions of dollars per year. Even B, C and D-list web celebrities are enjoying success in an environment that couldn’t possibly have existed even 20 years ago.

Compare this current landscape to the one that was once controlled by media moguls. It was only the media moguls and those with significant backing who were capable of launching media channels – TV networks, magazines, newspapers and radio stations. The creators of media companies are synonymous with wealth – Bloomberg, Oprah, Turner and Murdoch. These people had earned riches for multiple lifetimes before they launched their media empires.

If the average guy from Sweden with a name like PewDiePie can become a hot property whose channel is bought by none other than Disney, then anything is possible. Any person becomes the media company and their success is not limited by technology, nor distribution, but only creativity and their ability to amass an audience.

Now, take this idea of an individual’s influence and amplify it with a lifetime worth of business savvy, a fortune and a degree of risk taking. You get the new WWE Network.

Next Tuesday, look for Robert’s next piece on the WWE Network and the future of programmatic TV buying.

Mobile Is Not Coming — It’s Already Here!

Jon Steinberg, President, BuzzFeed, recently said: ”Mobile-first is not enough. Mobile should be all you care about!”

Really

As I’m getting up to speed here at the Ayzenberg Group (we’re a full service ad agency), I’m pulling all the latest data from our [a]list in-house publishing platform (website, email newsletter and social channels).

Today between 20 and 30 percent of our readers are using mobile or tablet devices to access the [a]list newsletter and website on any given day and 70-80 percent are still accessing our website and newsletter using desktop computers.

So that means that our readership is still heavily desktop-based and that’s where we should spend our technical and design resources

Not really.

First of all, our [a]list mobile traffic is growing the fastest (up 55 percent as compared to 42 percent for overall traffic). Secondly, I have a feeling that it would be growing even faster if we did a better job of publishing specifically with a mobile-first strategy. Last, I think we are missing a lot of traffic from people who would like to consume our media content when they have the time, rather than just when they happen to be in front of a computer screen.

But what if we add a lot more heavy video content over the coming months? Turns out, in spite of mobile data caps on many cellular plans, the average American is also streaming more and more video to their mobile phones and tablets every day.

Video platform Ooyala’s data shows {link no longer active} consumers are adopting mobile online video even faster than previous forecasts, driven, in part, by live events like the Winter Olympics in Sochi and March Madness, which both showed huge gains in mobile share. Add to that the upcoming Soccer World Cup in Brazil this summer and it’s pretty clear that 2014 is poised to be a record year for streaming.

Ooyala believes the time viewers spend watching video on mobile devices will double by the end of 2015 to 37% 2016. Another recent forecast from ABI Research show that mobile video viewing will increase more than 65 percent by 2019, with consumers watching online video 21 hours a month, up from 12.7 hours per month in 2013.

So, while people might say that “mobile-first” is just the catchphrase du jour in the publishing industry, the data doesn’t lie. As Wayne Gretzky famously said: “I skate to where the puck is going to be, not where it has been.”

Now, here comes the real problem with any mobile-first publishing strategy: What will happen to ad revenue It’s the old analog dollars versus digital pennies debate all over again.

The fact of the matter is that either publishers nor advertisers have kept up with the growth in mobile. Pre-rolls, pop-ups and tiny little banners at the bottom or top of the screen, is this the best we can do as an industry No, Facebook and Twitter have shown us that we have an alternative that is really working and it’s called native.

But we have to scale this up and make it the center of our universe. Publishers and advertisers need to realize that they are in the same boat and we need to work together or the user will pay the price in terms of bad mobile experiences and turn to other platforms that get this right.

Barry Lowenthal, President, The Media Kitchen, put it well in a recent column:

“I love this business, and I believe that some of the smartest and most innovative people work in this business. But I’m a little worried that we’re not moving fast enough to create meaningful mobile advertising experiences and we’re not trying to solve the attribution and measurement challenges fast enough.”

 

Image Source: Sports Illustrated

On Leaving Facebook

Last week, another notable brand aside from GM very publically pulled advertising dollars out of Facebook. The folks at Eat24 concocted a saucy “Dear John” letter that had social media workers everywhere nodding in agreement. Would this be the the beginning of the first wave Facebook expats to break through the cruel nature of EdgeRank’s hedges

Eat24’s letter resonated so much because they made a few points that made a whole lot of sense. After all the emphasis on gathering page likes and then the time, money and wit spent on creating engaging content to reach them, those hard-earned likes are now virtually useless.

In a world where operating on most social sites is basically free, aside from time and know-how, it is getting increasingly difficult to justify paying for a social network that teens, the bona fide arbiters of tech taste, are leaving. Moreover, Facebook’s constant war waged with fake likes has not yet been won. How disappointing to discover that those virtual votes of confidence are actually very low quality! Click farms continue to pop up around the world— it’s a big business.

After all, there’s still Twitter, a place where finding quality follows and engaging with your community is done with relative ease. That’s exactly where Eat24 saw their engagement go when they decided it was time to shutter their Facebook page, a move that made perfect sense since Twitter was already a better performing platform for them.

Social analysts at Ayzenberg were interested to know what would happen to Eat24 after they made the big jump away from Facebook. From the major surge of buzz generated by leaving Facebook, it makes sense that there would be a huge spike in mentions. The conversation for Eat24 quickly dissipated on Facebook, effectively abandoning what ostensibly was a major investment in the creation and maintenance of such a page.

It appears this breakup might be short-lived after all. When reached for comment, Eat24 replied with something interesting.

“We will be meeting with Facebook sometime this week and, out of respect for our relationship, we have no comment at this time.”

Does this mean that Eat24 and Facebook are back on How could Eat24 take Facebook back after putting such major stress on the demands of their relationship

Why all this attention paid to Facebook anyway, when brands are (or should be!) rolling out social strategies that make use of so many platforms Only because Facebook is still the largest social network in the world.

Executive Director of [ion] and [a]list daily contributor, Robert Brill makes a case for continuing to work with Facebook despite the struggle. Is the anger about Facebook’s bait and switch drowning out the fact that Facebook is still a viable platform

“Advertising has existed on Facebook, but the problem for brands is that what was once ‘free’ now doesn’t exist. Social amplification on Facebook was free because the site’s algorithm simply promoted the brand’s content to the end user.  However, there was still cost to build that fan-base and fund the cultivation of those brand-to-consumer relationships,” said Brill. “Teams were paid to create content for Facebook, other teams were paid to respond to interactions on Facebook, and yet other teams of strategists were paid to create the overall tone and direction of that content.  So, the reach was free, but a business model was born out of maximizing the EdgeRank algorithm.”

That model now needs to be arranged to consider the rising costs to administer content to Facebook users. The mantle must now be moved from building fanbases at Facebook’s urging to ensuring it shows up in their newsfeeds.

When it comes to the ultimate decision of whether or not brands should consider leaving the social site, Brill is skeptical.

“I don’t think brands should simply forgo all that hard work and massive intellectual property that is their Facebook presence because amplification is no longer free. Continue to advertise to Facebook users. Give them the same great content you’ve been giving them before.”

Introducing Jay Baage

We have a new member on the [a]list team. Everyone—meet Joakim “Jay” Baage.

We’re very excited to have him apply his expertise and vision at a time when [a]list daily is seeing great growth. Jay will be overseeing day-to-day operations at [a]list in additon to programming and producing the [a]list summits, Ayzenberg Group’s invite-only industry event and working closely with [ion] Influencer Outreach Network.

He comes to us with over 20 years of experience in both media and marketing, previously having been President of Viking Digital Media and Vice President of Content and Business Development for Digital Media Wire. He is a seasoned journalist and a veteran of several positions at news organizations in Sweden.

We turned the tables on Jay and asked him a few questions for your entertainment below.

[a]list: What are you most excited for this year now you’re aboard [a]list?

Jay: This is a very exciting time to be in online editorial! The mobile revolution is giving users the ability to consume more content more frequently and engage with it better, which in turn is increasing the demand for even more editorial and paving the way for a new wave of branded content and native advertising.

It’s now up to both publishers and advertisers to get this right if content marketing is going to remain relevant and successful part of the marketing mix.

[a]list is providing real value for its audience by serving up quality editorial content with an entertainment marketer’s insider perspective on a daily basis on the digital and social media channels that matter.

I look forward to figure out how we can also provide that kind of value through new versions of our [a]list summits, as well as make sure that we also cover more about what is going on in the fast growing online video ecosystem.

[a]list: What do you consider to be the most important piece of news to affect the industry this past year?

Jay: Probably King’s Candy Crush Saga. Once the ugly ducking of the gaming industry, mobile game companies are now sizzling hot with revenues through the roof, proving that the medium is truly the message (even though many worry that some of these mobile game companies are one hit wonders as the King IPO proved).

[a]list: Attempt to describe yourself within the confines of Twitter’s 140 character limit.

Jay: I can do better than that. In spirit of providing value for our readers, I can give a music recommendation in less than 140 characters instead: #SELFIE by The Chainsmokers. With lyrics such as “What a fake model! She definently bought all her Instragram followers. WHO goes out on Mondays ” What is not to love for a content marketer

 

 

‘Bergs Align

Mark Zuckerberg, Chairman and CEO of Facebook, Inc., announced the acquisition of Ayzenberg Group on his personal page today, a deal valued at $10 billion in cash, stock and Bitcoin.

“I’m excited to announce that we’ve agreed to acquire Ayzenberg Group, the leader in creative advertising for gen now.”

Earlier this year Ayzenberg congratulated Mark Zuckerberg on dodging a bullet with Snapchat.

Coming on the heels of Facebook’s surprise acquisition of Oculus VR, Zuckerberg, in an exclusive follow-up interview with the [a]listdaily, breathed a sigh of relief as he said “I’ve finally cornered the market on the future.”

“Creative advertising tightly integrated with social media was once a pipe dream. But you know, the internet was also once a dream, and so was the ability to Poke someone thousands of miles away with the touch of a button. The future is coming, and Facebook and Ayzenberg have a chance to build it together. I can’t wait to start working with the whole team at Ayzenberg to bring this dream to the world.”

Facebook’s social media department, however, was less than pleased with the deal.

“I just don’t see how it’s possible that they know more about social media than we do,” said Ethan Whiner, Facebook’s self-proclaimed ‘Social Media Guru.’

But the numbers don’t lie, as Ayzenberg’s Social Reporting Team noted that organic reach on brands managed by Ayzenberg Group increased by 206 percent after the acquisition.

The acquisition also reveals the true nature of Ayzenberg Group’s recent expansion. When asked what the incentive was to make the move down, Zuckerberg eagerly discussed plans for his “super cool” office next to Eric’s in the new building in Pasadena, CA. “I want to be closer to the action. And, their ping pong table is way better than ours.”

When asked what was next for Ayzenberg Group, CEO Eric Ayzenberg said he will reveal the plans for 2015 and beyond “live posting as Grand Marshall of the Rose Bowl Parade. Look for me on the float designed by Mark Ryden.”

The Winklevoss twins, who in recent weeks have been telling anybody who will listen that they “invented Ayzenberg Group,” were unavailable for comment.

 

The Future Of Game Advertising Is Data, Data And More Data

How are you building social currency Jesse Divnich of the game research firm EEDAR asked that question to the audience of game developers and professionals. Many of the other talks and panels at GDC this year discussing trends in game marketing and monetization touched upon that important question.

One of the take-aways from many of the marketing and monetization sessions at GDC 2014 is that Facebook remains a critical tool for virality and discovery. Especially for mobile games.

While Jesse Divnich presented research showing that Facebook has dropped from being the #2 source of mobile game discovery in 2012 to #5 today (behind different forms of word-of-mouth as #1, featured in store front as #2 and top charts as #3), Facebook is still the undisputed leader in mobile game promotion.

In the company’s own session on Wednesday, Facebook’s Dan Morris showed some impressive figures to back up its continued relevance for game developers and marketers. For example, Facebook is now driving 735 million clicks to games every day and that number keeps on growing.

“The growth of casino games over the last year is probably no surprise to anyone here, but we are seeing growth in many other categories as well,” he said. “Our native ad feed stories is something we are particularly excited about growing in 2014 in
and we have served 245 million mobile game app install ads to date.”

In separate sessions on Wednesday and Thursday, Dimitri Williams of Ninja Metrics as well as Jesse Divnich of EEDAR pointed to the need to focus on the 1 to 5 percent of game users referred to as “whales,” users who convert and monetize much better than the majority of players.

 

Game Developers Conference in San Francisco

So how do you make sure that you get as many whales as possible to play your game Getting demographic and psychographic targeting right is no doubt key to success here. Especially when it comes to mobile games. Going too broad with your advertising is expensive and techniques like paying for your advertising on an install basis (CPI) rather than reach (CPM) can be much more effective.

But even if you manage to convince your advertising partners to pay on a CPI basis, how can you make sure you are getting the right users who will monetize.

Music service Pandora’s Andre DeRussy‘s talk focused on just that, the importance of tracking post-install behavior so that you’re not just buying “dumb installs” for your game, but make sure that they are actually spending something and interacting with the downloaded app. At Pandora they have a lot of active mobile app users, so they pride themselves on being able to predict user behavior well, which is the message they wanted to get across to game developers.

Bottom line: The real advantage going forward will be to use data to drive your marketing and user acquisition tactics. Look at what is performing and who is converting, in real time. Then change your tactics accordingly. The Facebook platform is just so powerful here because they have the most data and a huge audience of 1.2 billion users. Many other publishers are also trying to copy their sponsored updates and in-stream app install ad format, but not doing it as well. At least not yet.