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Cash = Community * Context * Content * Currency

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How to monetize your social app / game with sponsored or paid virtual goods and how measure and optimize your success.

How to monetize your social app / game with sponsored or paid virtual goods and how measure and optimize your success.

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  • http://andrewchen.typepad.com/andrew_chens_blog/2008/05/when-facebook-a.html
  • http://www.bretterrill.com/2008/10/game-design-lessons-from-evolutionary_20.html
  • http://www.socialtimes.com/2010/03/the-economics-of-facebook-games/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+socialtimes+%28SocialTimes.com%29&utm
  • http://www.insidesocialgames.com/2009/11/04/how-big-social-games-maintain-their-sticky-factors/
  • http://www.insidesocialgames.com/2009/11/04/how-big-social-games-maintain-their-sticky-factors/
  • Transcript

    • 1. Cash = Community * Context * Content * Currency Martin Szugat, SnipClip GmbH
    • 2. Tomorrow is Now. Sharing. Gaming. Web 2.0 Post Web 2.0
    • 3. Funware: Design for Fun!
    • 4. Agenda
    • 5. VIRTUAL GOODS
      • GOLD RUSH on the INTERNET:
    • 6. More with Less
    • 7. Definition
      • Characteristics of Virtual Goods:
      • Rivalry
      • Persistence
      • Interconnectivity
      • (Fairfield)
    • 8. Digital vs. Virtual Goods
    • 9. Business Models Non Branded Branded Sponsored Paid User-generated Farm- Ville Virtual Greats SnipClip Second Life
    • 10.  
    • 11. Example A: Nestle Toll House
      • Two week-long period
      • over 1.1 million gifts sent
      • 3% click rate – Facebook banner ads: 0.02% to 0.04%
      • 17% lift in purchase intent
      • Source: AdNectar, 2009
    • 12. Example B: Malibu Rum
      • Two week-long period
      • over 1 million gifts sent
      • 7% click rate
      • 9% increase in brand favorability
      • Source: AdNectar, 2009
    • 13. Users Love Brands.
    • 14. User-generated Targeting
    • 15. Value Chain (Paid Goods)
    • 16. CASH = COMMUNITY * CONTEXT * CONTENT * CURRENCY
      • SECRET FORMULA:
    • 17. 1) Community (Maslow)
    • 18. 2) Context Hedonic Functional Social
    • 19. Do you want to play a game? Social Context + Casual Gaming = Social Gaming
    • 20. 3) Content
    • 21. 4) Currency
    • 22. Payment Methods
    • 23. Virtual Goods Strategy
    • 24. Jumping the Shark
    • 25. 3R-Metrics
    • 26. Comparison of Virtual Goods Virtual Worlds Social Games Social Networks Average Revenues per Monthly Active User per Year $0.37 $3.56 $8.23
    • 27. ARPPU accross different genres
    • 28. ACQUISITION, ACTIVATION, RETENTION, REFERRAL, REVENUE
      • PIRATE METRICS for STARTUPS:
    • 29. AARRR!!!!! Acquisition Retention Referral Revenue
    • 30. Acquisition
    • 31. Activation
      • When is an user an active user?
      • Caution:
      • Facebook, MixPanel, Kontagent, etc.:
      • Active User = One-Time Visitor … WTF?!
    • 32. Retention
    • 33. Stickiness
    • 34. Referral k-Factor = Number of Invites * Acceptance Rate k-Factor > 1  Viral Growth 
    • 35. Invite Success Factors
      • Volume (# of friends invited): the more friends invited, the less success per invite
      • Pacing (time between invites): invitations that are more spread out in time are more likely to succeed
      • Repetition (# of invites to a friend): higher number of invites represent a higher chance of success
      • Selectivity (number of invites per invite session): users who invite friends individually tend to have a higher yield, possibly because they target their invitations to those who are more likely to accept.
      • Demographics : no correlation: influential inviters are distributed randomly across various demographics with the exception of age: we observe that being older does confer a bit more authority and influence.
      • Ego-network profile (structure of friends):high friend count means weaker connections and lower overall success rate
      • Gamer activity : the longer they play, the more invites they send
    • 36. Main Learnings
        • “ Just 10% of users account for 50% of successful invites.”
        • “ It is puzzling that the shape and density of one’s FB network has little predictive power. A possible explanation is that these networks can be largely static and do not reflect the level of interaction between friends.”
    • 37. Stickiness, Virality and Churn
    • 38. Revenue Age ARPPU 15 $2.65 18 $2.92 22 $2.82 25 $2.99 29 $3.33
    • 39. Most important:
      • User Acquisition Cost < Lifetime Network Value
      • [Approx.: 1/(1-k) * ARPU * User Lifetime]
    • 40. FUNNELS AND TESTS
      • TOOLS:
    • 41. Metric-Driven Design  Funnel Analysis  A/B Split Testing
      • Trial & Error
      • Copy & Adapt
    • 42. Viral & Engagement Loops Active User
    • 43. PRODUCT PLANNER
      • www.productplanner.com
    • 44. MIXPANEL
      • www.mixpanel.com
    • 45. KONTAGENT
      • www.kontagent.com
    • 46. Reading
    • 47. www.Helden-der-WM.de
      • http://sammelco.de/webinale
    • 48. Talk to me.
      • Martin Szugat
      • Email: [email_address]
      • Web: www.snipclip.com
      • Twitter: http://twitter.com/snipclip