Archive for November, 2009

Fixing America, One Problem At A Time

Posted in Pointless Words of Wisdom on November 28, 2009 by themaroon

I was talking to a friend the other day about the future of our country. I mentioned that I was worried about what would happen to our deficits, and then our currency, once all of the baby boomers were in retirement homes on the taxpayer’s dime. She mentioned that in Japan this would never be a problem because apparently their society values the elderly and taking care of them is considered an honor. I realized she had hit on the perfect solution.

Let’s ship our senior citizens to Japan. Hear me out.

For one, the seniors will love it. They’ll get to go on nice two-week Pacific cruise, at the end of which they’ll be at a place where they can eat most of the food without bothering to put their dentures in. And we’ll just tell them they’re in Florida. I don’t know if you’ve ever been to Disney World, but let’s just say the demographics in Orlando and Okinawa aren’t far apart. Build one giant golf ball and nobody will be the wiser.

The Japanese will win too. Americans are bastions of productivity and get far more done in a work day, even in retirement, than the Japanese. They must anyway, because why else would our auto workers get paid three times as much? Also both groups, if you believe the stereotypes, are equally skilled at driving.

You’re welcome America. And Japan.

2 Comments »

Using Google Voice To Track Performance of Online Ads

Posted in bidness on November 17, 2009 by themaroon

At Blue Frog Gaming we spend a lot of time on metrics. One of the unique aspects of high-volume online businesses is that you have access to a wealth of data and ways to use it that a lot of traditional offline establishments don’t.

One of the best examples is the ability to track your advertising spend. John Wanamaker famously once said “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” He obviously wasn’t making websites. Giving customers who view ads a special URL, then using that to set a flag in the database and make special reports detailing exactly how much Revenue Per User (RPU) one gets is de rigueur online. You’d be hard pressed to find any web-based business spending more than $10 a day in ads that doesn’t know how much revenue they’re generating with that money to the cent.

But what about offline businesses who advertise online while doing all of their sales from a brick and mortar establishment? I was recently talking to the ad director of a local chain of tire shops who mentioned that they need to find ways of tracking the customers who click through their ads and end up buying tires from the store.

Customers who come in via email or the contact form on the web aren’t too hard. You’d simply track them up through the point of contact the same way any online business would, then make sure whoever handles them in store puts the appropriate flag in the user system. But what about the surprisingly large number of people who still make their first contact the old fashioned way, via telephone?

That’s where Google Voice comes in. Google Voice (formerly Grand Central, which I was an early user of) allows anyone to get a second phone number which forwards to their original one. It has great built in message handling and call tracking, which would help an offline business track customers through that portion of the sales funnel.

Here’s how it would work:

Bob’s Tire Shack gets one Google Voice number for each of their stores. Bob purchases Facebook ads pointing to a special URL which then stores a session variable indicating that the user came from a Facebook ad. When a user clicks through to the contact page, it gives them the Google Voice number, given only to customers who came to the website through the special URL, rather than the store’s normal number.

When someone calls to set up an appointment Bob can then tell which number they called, and therefore whether or not they came from a Facebook ad. It will be much more accurate than simply asking people “how did you hear about us?”.

This could work across a variety of channels simply by getting different numbers, which Google sells fairly cheaply.

3 Comments »

Random Brain Dump

Posted in Uncategorized on November 7, 2009 by themaroon

Random smattering of thoughts for you today:

Scamville

A lot of people seem to have misconstrued the purpose of my last article. It wasn’t to give anyone, be it the promoters of “scammy” advertisements, the offer systems who bring them to Facebook customers, or the apps they do so through, a pass. As I said in my entry, I agree it is a problem. The only acceptable number of scams is zero.

The point of that segment of the article (which seems to be the only one a lot of people read) was that Arrington was overestimating by a large margin the amount of dollars coming from scams. He specifically said “The games that scam the most, win.” and that is totally untrue, as they’re a relatively small portion of developers’ incomes, and thus the whole “ecosystem of hell” idea was overblown.

Spam vs. Ham

I’ve also noticed lately that many people in the software industry overlook the nuances of words like “spam” or “scam”. Everyone wants to eliminate these, but the problem is that one man’s spam is another man’s ham.

For instance I’ve read dozens of people calling Farmville and Farm Town invites spam. I can’t say I totally disagree, I hate those things. But my wife, when she was playing loved the free chickens. And overall the platform median acceptance rate nearly doubled to around 60% as a direct result of them. Clearly most do not consider them spam.

Someone also mentioned Free Credit Report as a scam. I’ve used that site and ones like it and never had a problem. I think we can all agree that loss leaders and free services given in order to advertise a premium service are a pretty standard and, assuming they are not misleading, ethical business model.

It says what it does pretty clearly on the homepage:

From what I can tell they had a settlement with the FTC back in 2005 (long before there were Facebook apps) about some deceptive marketing practices, but I had personally used them well before that when I was cleaning up my credit. They were very helpful in that, and while I’m not the sort of person who reads the fine print, I was aware that if I did not cancel within a few days I’d get hit with some monthly fee. If I remember correctly they made cancelling as easy as a phone call back then, and while I was fairly annoyed that I couldn’t simply do it online, I still got it done with just a few minutes of effort.

So despite the fact that clearly some people consider them a scam, some people clearly consider it a valuable free service. And to get some extra Farm Bucks too? Bonus.

The point I’m making here is that it’s not always so black and white what is good and what is bad, and to simply dismiss everything you don’t like or think unethical as such is intellectually lazy.

Politics

I was watching last week’s elections intently, as Ohio had a casino issue on the ballot that looked pretty promising. It passed, and soon there will be legalizing gaming an hour from my house. Presumably they will have a poker room as well, so I may actually visit occasionally. Welcome to the 21st century, Cleveland.

I made the mistake of reading general political articles and blogs around the same time and had forgotten how dumb they are. Most tended to focus on what the Republican Party winning a few key spots means for Obama and the Democrats. The answer is, of course, nothing. Chris Christie (a name I could never vote for, regardless of competence) beat the extremely unpopular Jon Corzine. All of the political blogs are talking about how Obama’s inability to get one of the least liked Governors in the country reelected means he is losing political clout. If anything the fact that someone that incompetent got 44% is impressive. Without Obama it may have been a blowout.

But regardless, as always, it came down to the independents. Republicans want to paint Obama as some vapid cult of personality, and it’s easy to do because so many of his supporters are obviously drinking the Kool Aid. But in the end he won, like Bush before him, because he captured the independent vote. He convinced them he was the more competent candidate, as did a couple Republicans last week. That really says nothing about national trends.

Obama

Love him or hate him, you have to admire the guy for his balls of steel. He’s dealing with an economic meltdown, a growing environmental crisis, winding down Iraq, a worsening quagmire in Afghanistan and everything else that comes with the War on Terror, and he’s still trying to get health care legislation pushed through. Most Presidents are afraid to tackle that in good times. You might argue that the proposals he supports there on a mistake, and I’d even somewhat agree with you, but you have to give the guy credit for trying. It’s a stark contrast when compared to the laziness (intellectual and otherwise) of his predecessor.

Also Word 2007 tries to correct Obama by changing it to Osama. That may explain half of what’s been said on Fox News in the last two years.

Health Care

Just kidding.

Scamville? Not Exactly.

Posted in Startup on November 4, 2009 by themaroon

TechCrunch wrote an article this weekend entitled Scamville: The Social Gaming Ecosystem of Hell that’s stirred up a lot of controversy, and even some changes, in the social gaming industry. This is an area I know a little something about so I thought I’d comment.

Arrington’s not entirely off-base here, but he’s not entirely on either. For one, he’s probably off by an order of magnitude as to how much of the money flowing through these platforms comes from scams. In our time running games, we’ve generally seen direct payments make up somewhere between 50-60% of total revenues. That’s counting banner ads (which are low, maybe 5%) and offers. This is pretty typical from what I’ve gathered in talking to other developers.

Of the offers, most of the money comes in from the legitimate pay ones like Netflix and Blockbuster (the two biggest), Free Credit Reports, Credit Cards, DirectTV, Gamefly, etc. Customers may be scamming those a bit, but that will just cause them to reduce payouts a proportional amount, ensuring developers get paid about the same regardless.

And then of the free offers, many are legitimate, albeit very low-paying. There definitely are some that will get you on the hook for $10 per month on your cell-phone bill if you’re not careful, but there aren’t that many of them and they haven’t paid out excessively well for months now, so as an overall percentage of platform revenues they’re not very significant. Trust me, there aren’t many offers me and my coworkers have not tried, and only once has one of us fallen for that. I’ve seen a couple pop up myself but was smart enough not to receive a code in a text message and then type it in, or to give a real phone number.

Mike also seems to be confused about who does what in the whole ecosystem. He says “Game developers, desperate to monetize, then search for ever more questionable offers to make up the difference.” Game developers don’t ever search out offers as far as I know. Rumor has it that one big developer is testing their own offer platform, but that’s the only case of it I’ve heard of.

Offer providers search for new and better offers, game developers simply display an iframe. And offer providers, like any sane business, don’t look to replace revenue, they look to maximize. They’re not like “hey Netflix dropped from $25 CPA to $20 CPA, we better find something scammy that’s $25.” They simply look for what pays the most and put that at the top at all times. It’s a state-based effect, and having Netflix’s rate change doesn’t make them any more or less hungry to find other high-performance offers.

“And recent moves by Facebook to shut down application spam only make the problem worse in some way – game developers have to spend more money on advertisers to get users now that the viral channels are shut down. That means the games have to monetize even better. Which means more scams.”

Yes and no. Yes the new changes may impact virality, which may in turn drive Facebook’s ad sales, which as I mentioned in my last post is probably not an unintended consequence. But no amount of ringtone hucksters are going to make up for that. The new platform will be all about engagement. Game developers will strive to get higher RPUs not by doubling their revenue from adding more bullshit PC Doctor DVDs, which aren’t doing that much for us anyway, but by making games that customers want to play more frequently for longer. Also new Facebook ad rules (along with Arrington’s post)have prompted many offer providers to remove hundreds of low quality ads.

On the other hand, I agree with Arrington in that the number of scammy free offers is still far too high, in that it is not zero. We personally use two offer providers. One of them (Peanut Labs) I use largely because they have the most reliable free offers, and scams are almost nonexistent. The other one allows me to block offers I don’t like, and I do this whenever we get complaints about specific ones. That’s not easy because often the customer doesn’t even remember the name of the offer that sucked them in, but I do my best to hunt them down and make sure they’re never seen on our games again.

We as game developers hate the idea of someone scamming our customers. Even discounting the ethical issues, which we do not, it’s just plain not good for us. The scammy offers are a low percentage of revenue, but a high percentage of support requests, and are probably why a lot of people quit playing our games, and therefore quit paying us money. The math just doesn’t work out. Even if we really didn’t care if our customers got ripped off (which they always blame us for, by the way, even to the point of threatening lawsuits) it still just wouldn’t make sense on our part to knowingly sponsor these.

7 Comments »

Follow

Get every new post delivered to your Inbox.