This document discusses different types of in-game advertisements (ads) and their pros and cons. It begins by explaining that understanding ads will help game developers maximize revenue. It then covers various topics related to ads, including what drives internet revenue, the growing popularity of online video ads, and the US advertising market. The document also defines key players in the ads ecosystem like guaranteed and remnant inventory buyers. Finally, it provides a table comparing the pros and cons of different ad types like pre-game, click-away, and inter-level ads.

1. ALL ABOUT ADS!
Joe Gruender, Mochi Ads Guy
Mr. Shen, Game Developer / Player & Mochi Employee
JULY 26TH, 2011

2. WHY SHOULD YOU CARE?
“ALL I NEED TO KNOW IS I PUT MOCHI’S CODE IN MY GAME, AND I
EARN MONEY.”
KNOWING HOW IT ALL WORKS WILL HELP YOU UNDERSTAND:
! WHY CERTAIN ADS ARE BEING SERVED INTO YOUR GAME
! AD TERMINOLOGY & DEFINITIONS
! WHY THE AD MARKET FLUCTUATES
2

3. WHAT DRIVES REVENUE ON THE INTERNET?
! ADS
! SUBSCRIPTIONS
! E-COMMERCE (INCLUDING MICRO-TRANSACTIONS)
3

4. ADS DRIVING THE INTERNET
! ONLINE VIDEO ADS CONTINUE TO BE THE FASTEST-GROWING
FORMAT, WITH AN INCREASE OF MORE THAN 52% PREDICTED THIS
YEAR. SOURCE: HTTP://WWW.EMARKETER.COM/ARTICLE.ASPX?R=1008431)
! TO FUND ONLINE-VIDEO SPENDING, MANY PREDICT TO
CANNIBALIZE DISPLAY ADVERTISING AND SOME EXPECT TO MOVE
AS MUCH AS 5% OF TELEVISION BUDGETS.
SOURCE: HTTP://WWW.REELSEO.COM/VIDEO-ADVERTISING-FASTER-GROWTH/
! SOME 62% OF MARKETERS WILL MIGRATE TV AD DOLLARS TO
DIGITAL VIDEO, BASED ON THE BELIEF THAT THE MEDIUM
DELIVERS A MORE POSITIVE ROI, COMPARED WITH 47% OF
AGENCIES AS THEY ATTEMPT TO FOLLOW THEIR TARGET AUDIENCE
SOURCE: HTTP://WWW.IDGKNOWLEDGEHUB.COM/BLOGS/?P=8007
4

5. US ADVERTISING MARKET
Source: http://www.businesswire.com/news/home/20110413006052/
en/IAB-Reports-Full-Year-Internet-Ad-Revenues-2010
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6. GETTING PHILOSOPHICAL
DIFFERING PHILOSOPHIES AROUND ADVERTISING
! TWO CAMPS:
! Ads are evil and should be abolished.
! Ads make me money, so I can keep building the things I love.
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7. ADS MAKE ME MONEY…..
TWO TYPES OF ADVERTISERS WHO WANT YOUR BUSINESS
! BRANDING
! REMNANT
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8. WHO WANTS TO BUY YOUR INVENTORY
BRANDING ADVERTISERS:
! FOCUS ON EDUCATING GAME PLAYERS OF THEIR BRAND, PRODUCT
NAME ETC.
! GROWING ONLINE PRESENCE
! REPURPOSING EXISTING OFFLINE VIDEO CONTENT.
! HOST INITIATED VIDEO WITH HOST INITIATED VIDEO.
! HIGH BUDGETS AT GREAT ECPMS
! GREATER CONSUMER INTERACTIONS
! BrandBoost
! Watch&Win
8

9. WHO WANTS TO BUY YOUR INVENTORY
! REMNANT ADVERTISERS:
! Are looking for inexpensive, high volume opportunities
! Have growing budgets
! Don’t have long term commitments
! Ability to self manage inventory
! VAST (trusted partners only)
! Ad server integration
! Self-Serve Platform
More on Branding & Remnant advertisers later
9

10. MOCHI’S FOCUS
MAKING A GREAT AD PLATFORM EVEN BETTER BY:
! IMPROVING AD QUALITY
! LOCALIZING SALES EFFORTS
! IMPROVING ADS REVENUE
10

11. QUALITY
IN THE LAST 24 MONTHS:
! WE’VE SHUT DOWN THE MANY TYPES OF UNDESIRABLE, BUT
LEGAL ADS.
! WE’VE INSTITUTED BETTER QUALITY CHECKS
! Human review
! Roughly 10% of all submitted ads are denied.
! Challenges
! IP target
! Proxy servers
! Misleading landing pages
http://www.mochimedia.com/adv-guidelines.html 11

12. LOCALIZED SALES
MOCHI IS FOCUSED ON CREATING HIGH VALUE / HIGH REVENUE
GENERATING PARTNERSHIPS IN STRATEGIC MARKETS
! CURRENT SUCCESS
! US/UK/CA
! Western Europe
! North America / W. Europe / AU/NZ
! CONTINUING EFFORTS
! Latin and South America
! Asia (non-Chinese)
! China
12

13. IMPROVING REVENUE
THINGS WE’RE DOING TO INCREASE DEVELOPER
REVENUES:
! BETTER MONETIZE GLOBAL MARKETS (LEVERAGING NEW
PARTNERSHIPS IN W. EUROPE, TURKEY AND AUSTRALIA)
! LOOKING FOR PARTNERS IN LATIN AND SOUTH AMERICA
! EXPLORING NEW AD PRODUCTS
! Watch&Win
! BrandBoost
! ScoreAds
! Others soon in late Q3
13

14. MOCHI ADS PRODUCTS
! PRE-ROLL ADS / TIMED ADS
! SCORE ADS
! CLICK-AWAY ADS
! CUSTOM ADS
14

15. MOCHI ADS PRODUCTS, CON’D
PRE-ROLLS / TIMED ADS:
! CPM/CPC
! SKINNED VIDEO/VIDEO/FLASH/STATIC IMAGES
! 90% OF OUR INVENTORY
15

16. MOCHI ADS PRODUCTS, CON’D
CLICKAWAY ADS:
! CPC BASED ADS ONLY.
! NO VIDEO
! LOWER ECPM BUSINESS – SELF-SERVE PLATFORM
! 10% OF INVENTORY
! PROFITABLE EXCEPTIONS – OF COURSE.
16

17. MOCHI ADS PRODUCTS, CON’D
SCORE ADS:
! CPM/CPC
! FLASH / STATIC IMAGES
! OPT-IN
! FREQUENCY CAPPED 2 VIEWS EVERY X MINUTES
! ADDITIONAL REVENUE STREAM
17

18. MOCHI ADS PRODUCTS, CON’D
CUSTOM ADS:
! DEVELOPER SETS A MINIMUM ECPM BENCHMARK FOR MOCHI
TO SERVE PAID ADS, OTHERWISE DEVELOPER’S OWN STATIC
IMAGE RUNS.
! NO REVENUE
18

19. ECPM V. REVENUE
I GET A HIGHER ECPM USING “X”…ECPM != REVENUE
! ECPM IS A METRIC, IT ISN’T SOMETHING YOU CAN SPEND.
REVENUE IS SOMETHING YOU CAN SPEND.
! ASK YOURSELF: “AT THE END OF THE DAY, WHAT’S GOING TO
MAXIMIZE YOUR REVENUE?”
19

20. ECPM != REVENUE, CON’D
CPM? REVENUE? QUÉ?
! CPM VS CPC VS. CPA
! CPM favors the developer (and Mochi).
! CPC is middle ground.
! CPA favors the advertiser.
20

21. BEHIND THE SCENES: ADS ECO-SYSTEM
THE PLAYERS:
! GUARANTEED INVENTORY BUYERS
! REMNANT INVENTORY BUYERS
THE INFRASTRUCTURE:
! SALES (SOMEONE HAS TO DO IT)
! AD APPROVALS
! ADS ARE CALLED
! ADS ARE SERVED
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22. THE PLAYERS: GUARANTEED INVENTORY BUYERS
GUARANTEED INVENTORY BUYERS
! DEFINITION: PARTIES THAT BUY A GUARANTEED IMPRESSION GOAL
BETWEEN A START AND AN END DATE. TYPICALLY, THESE ADVERTISERS
ARE INTERESTED IN SHARE OF VOICE (SOV), REACH AND FREQUENCY.
! TYPES
! “Branders” – agencies
! Driving consumer awareness. Think McDonalds, X-Men movie trailers
! WANTS TO REACH A TARGET AUDIENCE
! At Mochi, we use game categories as a proxy for user demographic
information. For example, we know from comScore that puzzle games skew
towards mature women (e.g. Moms), while Fighting games tend to attract a
more male audience.
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23. THE PLAYERS: REMNANT INVENTORY BUYERS
REMNANT INVENTORY BUYERS
! DEFINITION: PARTIES WHO BUY INVENTORY WITH A FOCUS ON
PRICE. START AND END DATES, DEMOGRAPHICS ARE NOT AS
MUCH A FOCUS AS PERFORMANCE.
! TYPES:
! “Arbitragers”
! Customers who make a living on the thin margin between the buy rates and sell
rates. These players need cheap inventory in huge amounts. Think
Gamevance.com downloads.
! Traffic Drivers”
! Customers, who have their own website, typically game portals or iphone apps
developers, and need to drive eyes as cheaply as possible.
! Video Ad networks
! Ad networks who look to buy inexpensive inventory to run video banners
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24. INFRASTRUCTURE: SALES
SALES DEALS ARE DONE BY
! MOCHI SALES FOLKS
! MOCHI AUTHORIZED REPRESENTATIVES
! MOCHIADS SELF-SERVE
! PREFERRED AD NETWORK PARTNERSHIPS
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25. INFRASTRUCTURE: GETTING ADS IN YOUR GAME
ADS ARE SERVED INTO YOUR GAMES VIA:
! MOCHI SITE SERVING
! AN XML CONNECTION TO BRANDERS’ AD SERVERS
! CUSTOM AD SERVER INTEGRATION
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26. DIFFERENT TYPES OF ADS: PRE-LOADER AD
PROS:
• Great for guaranteeing an ad impression for a play of your game
• Coupled with LiveUpdates is a great technology for updating your game
across the internet as well as encrypt it for security
• Easy to implement 26

27. DIFFERENT TYPES OF ADS: PRE-LOADER AD
CONS:
• From a player standpoint, it does force an ad impression for a play of your
game and some ads have a required time limit
• If the game is hacked in any way and LiveUpdates is removed, then the
advertisement will also be removed.
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28. DIFFERENT TYPES OF ADS: CLICK-AWAY AD
PROS:
• Excellent alternative for Pre-Game Ad
• Unobtrusive – player is not forced to wait for anything
• Even if LiveUpdates are removed, these advertisements are not tied into the
code and will stay inside your game
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29. DIFFERENT TYPES OF ADS: CLICK-AWAY AD
CONS:
• 300x250 ad space required that cannot be rotated, skewed or obstructed in
any way
• Lower eCPM as higher, richer media based ads are not passed through
Click-Away Ad displays
29

30. DIFFERENT TYPES OF ADS: INTERLEVEL AD
PROS:
• Excellent alternative for Pre-Game Ad
• Even if LiveUpdates are removed, these advertisements are not tied into the
code and will stay inside your game
30

31. DIFFERENT TYPES OF ADS: INTERLEVEL AD
CONS:
• Player will be forced to wait a period of time (like a Pre-Game Ad) before
being able to progress with the game
• A bit more obtrusive than a Click-Away ad as it takes over the screen
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32. MR. SHEN’S SUMMARY
Ad
Type
PROs
CONs
Pre-­‐Game
Ad
• Richer
media
ads
capabili3es
(ex:
• Hacked
games
removing
Flash,
video,
etc.)
meaning
higher
LiveUpdates
also
removes
eCPM
the
ad
• Compa3ble
with
Mochi
Media’s
• Forces
a
predetermined
LiveUpdates
Service
wait
3me
for
each
3me
the
• Easy
to
implement
(one
line
of
game
is
loaded
code)
• Takes
over
whole
game
stage
Click-­‐Away
Ad
• Unobtrusive
• Generally
lower
eCPM
than
• Can
be
integrated
into
the
game
pre-­‐game
ads
stage
how
the
developer
sees
fit
• 300x250
minimum
space
• If
LiveUpdates
are
removed,
Click-­‐ required
for
ad
Away
Ads
will
s3ll
work
Inter-­‐Level
Ad
• Placed
at
natural
breaks
of
the
• Forces
a
predetermined
game;
does
not
force
an
ad
when
wait
3me
for
each
3me
ad
the
game
starts
is
shown
• If
LiveUpdates
are
removed,
Inter-­‐ • Takes
over
whole
game
Level
Ads
will
s3ll
work
stage
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33. FIN
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