This document provides a 10 step guide for monetizing social games through virtual currencies. The steps include defining currency sinks and sources, assigning currencies, balancing engagement and monetization, setting exchange rates, promoting currencies, maintaining demand and balance, testing and optimizing the system. The overall approach emphasizes making the game fun first, then introducing monetization elements like virtual currencies once users are engaged.

1. Slide title goes here…
Monetizing Social Games:
A Step-by-Step Guide
Nick Talarico
Director of Publisher Development, Offerpal Media, Inc.
www.facebook.com/ntalarico
@nptca
Offerpal Media Inc. Confidential

2. First, a bit about Offerpal Media…

3. Company Background
Quick Facts: Management Team:
• 100+ million Unique Visits / mo. • George Garrick, CEO
• 4+ million transactions / mo. • Mitch Liu, Co-founder & VP
• Venture capital funded: June, • Bill Lonergan, CFO
2007, and February, 2009 • Mihir Shah, CRO
o Interwest Partners • Naghi Prasad, VP Engineering
o Northbridge Venture Partners • Shannon Jessup, VP Sales
o D.E. Shaw Ventures
• Launched October, 2007
• Headquarters: Fremont, CA
“Offerpal Media is built on the science of inserting scientifically
targeted and relevant advertising offers into the virtual
economies of social web sites, games and applications.”

4. Pioneer in Virtual Currency Monetization
In 2007, Offerpal Media launched
the first platform to give
consumers a way to earn virtual
currency for free – whether by
participating in targeted ad offers,
completing online surveys or
shopping at brand-name retailers.
Today, we have:
• 165 Million User Accounts
• 4,000 Advertising Offers
• 2,000 Publishers/Developers
• 750 Billion Virtual Points Issued
• $19.6 Million in Venture Funding

5. User Flow
1 2
3 4
2

6. First, some things to consider…

7. Not All Games Monetize the Same
Schwarzenegger
DeVito

8. Not All Games Monetize the Same
Consider:
• The Type of game – compelling theme & mechanics? (below)
• The Demand for Virtual Currency
• The Balance of Sources & Sinks (+ Non-Monetizing Sources)
• The Promotion of the Monetizing Sources
• User Engagement & Retention (DAU:MAU)
All of these things, when optimized, will improve monetization.
>$150 eCPM
Card Games $400
RPGs & MMORPGs $225
<$1 eCPM
Resource Management Games $200
<10¢ eCPM
Owning $150
Monetization
for Virtual
Category “Trivia” $25
Monetization Currency and
CPM Digital
CPC Adsense Products
Banners
User eCPM
Engagement

9. First of all, Make It Fun
Before you do anything,
ask yourself:
• Is your game fun?
• Will users come back?
• Will they invite their
friends?
If not, go back to square one.
Monetization mode comes
AFTER your game is
engaging and viral.

10. And now…
10 Steps for
Monetizing Social Games

11. Tip #1: Define Your Sinks
Some Types of Sinks:
• Functional Goods
• Decorative Goods
• Behavioral Goods

12. Tip #1: Define Your Sinks
Types of Sinks:
• Functional Goods
• Decorative Goods
• Behavioral Goods

13. Step #1: Define Your Sinks
Types of Sinks:
• Functional Goods
• Decorative Goods
• Behavioral Goods

14. Step #2: Assign Currency to Your Sinks
• Dual Currencies:
– Use “in-game” currency
to engage users
– Use “RMT” currency to
monetize
• Assign currencies to each
sink or set of sinks
• The decision to use
multiple currencies may
be one of the biggest
decisions you make.
Happy Harvest uses “Game Coins” for its engagement
currency and “Credits” for RMT currency.

15. Step #3: Define Sources for Your Currencies
Types of Sources:
• In-game currency
– Missions/Quests
– Logging in
• RMT currency
– Cash payments
– Ad offers
– Shopping
– & more to come…

16. Step #3: Define Sources for Your Currencies
Types of Sources:
• In-game currency
– Missions/Quests
– Logging in
• RMT currency
– Cash payments
– Ad offers
– Shopping
– & more to come…

17. Step #3: Define Sources for Your Currencies
Types of Sources:
• In-game currency
– Missions/Quests
– Logging in
• RMT currency
– Cash payments
– Ad offers
– Shopping
– & more to come…

18. Step #3: Define Sources for Your Currencies
Types of Sources:
• In-game currency
– Missions/Quests
– Logging in
• RMT currency
– Cash payments
– Ad offers
– Shopping
– & more to come…

19. Step #3: Define Sources for Your Currencies
Types of Sources:
• In-game currency
– Missions/Quests
– Logging in
• RMT currency
– Cash payments
– Ad offers
– Shopping
– & more to come…

20. Step #3: Define Sources for Your Currencies
Types of Sources:
• In-game currency
– Missions/Quests
– Logging in
• RMT currency
– Cash payments
– Ad offers
– Shopping
– & more to come…

21. Step #4: Get them hooked
Balance engagement
with monetization:
• Engage your users first &
monetize once engaged
• Allow all to play, but let
people pay to advance
more quickly
• Focus on constant
balance between sources
and sinks (the sinkhole
must always be slightly
larger)

22. Step #5: Set Your Exchange Rate
Tips on setting the exchange rate:
• Too low = low perceived value
• Too high = high inflation
• Find the sweet spot by using
Offerpal’s Multivariate Testing
Platform (free like all Offerpal products)
=

23. Step #6: Launch Game
vs.
Users of Facebook games expect them to be alive…
constantly evolving and improving. Release games when
they’re not 100% finished and iterate with improvements as
new features.

24. Step #7: Promote Your Virtual Currency
Promotion =
Monetization
• Add a tab to “Add
Credits”
• Include balance in
a status bar
• Use newsfeeds,
notifications,
banners and other
messaging
opportunities

25. Step #8: Keep Demand for Currency High
What drives demand?
• User psychology
– Self-expression
– Collection
– Achievement
• Limited edition goods
• Level-specific goods
• Perishable goods
• New, fresh content
• Global leaderboards &
social competition

26. Step #9: Maintain a Balanced Economy
Tips for a healthy economy:
• Try upping exchange rate for a day
& promoting it to users.
• NEVER (ever) flood your RMT
currency. Ever. Seriously.
• Don’t keep the economy too tight
– remember, it’s free to play
• If your economy is too loose (if it’s
too easy to acquire currency), then
you’re missing out on
monetization.

27. Step #10: Test, Measure, Optimize
What to test?
Attribute Graphs
• Exchange rate
• Price points
• User Interface options
• User patterns
• Use the Offerpal Virtual Currency
Analytics System
(free like all Offerpal products)
Trend Graphs

28. Questions? Sign ups?
www.Offerpal.com
@Offerpal
http://myofferpal.wordpress.com
www.facebook.com/ntalarico
@nptca