Facebook’s ‘Car Town’ Gains Honda Ads in Games Shift

Aug. 23 (Bloomberg -- Honda Motor Corp.’s campaign for its new CR-Z car features the hybrid vehicle in some colorful roadside billboards that can’t be seen from a freeway.

The ads are on display in Facebook Inc.’s virtual game “Car Town,” as Honda advertises on the social-network site for the first time today. The game, which allows users to collect and customize cars, has 3.1 million users. It was released on Facebook two weeks ago by Cie Games Inc.

Brands are turning to social networks to reach an audience with leisure time on its hands and the patience to sit through branded messages. Walt Disney Co., Electronic Arts Inc. and Google Inc. have all bought games makers in recent months to benefit from millions of users signing up to play.

“You can have 200,000 people drive past a billboard on an L.A. freeway every day, but you don’t have the same level of engagement as when people select “Car Town,’” Steve Center, Honda’s vice president for advertising, said in an interview. “Marketers and game developers will discover they are building powerful channels and that there’s enormous property for sale.”

Dove Soap and Breyers Ice Cream are running ads on “TikiFarm,” while Energizer batteries are promoted on “Family Feud.” Microsoft Corp., Cascadian Farm Organic and 7-Eleven have all marketed themselves on “Farmville,” a game with more than 62 million users that lets users try their hand at farming. A player grows and harvests crops, purchases items like shovels tractors and rakes and raises livestock.

Farmville, Mafia Wars

Global advertising in social games and applications will total $293 million next year, a 60 percent increase from 2009, according to researcher EMarketer Inc. in New York. By comparison, expenditure on television advertising was $166.9 billion in 2009, according to ZenithOptimedia.

As ads move online and marketers follow consumers to the Internet, traditional advertising in print newspapers and magazines has suffered declines. Internet ads are forecast to make up 17.1 percent of the ad market in 2012 from 12.7 percent in 2009, ZenithOptimedia Group Ltd. a London-based ad buyer owned by Publicis Groupe SA, said last month.

Zynga Inc., the top maker of Facebook games whose titles include “Farmville,” “Texas HoldEm Poker” and “Mafia Wars Game,” said it’s in talks with numerous brands about advertising.

“We believe that advertising will play a larger role at Zynga by providing brands the reach of TV, the measurability of online and the most engaging ad integrations available,” said Manny Anekal, director of brand advertising at the company.

Microsoft’s Bing

“A lot of the growth around Facebook has been because people play social games so much,” said Simon Mansell, chief executive officer of TBG Digital, a London-based digital ad agency that also sells ads on Facebook. “Users spend so much time playing that during downtime in the game they can respond to offers.”

Microsoft Corp. gave virtual currency to “Farmville” users who became fans of the Facebook page of the Bing search engine, according to Lynn Rowe Girotto, senior director for Bing marketing. Users then received status updates linking Bing search results to “Farmville.”

The result was 425,000 new fans of Bing on Facebook and 70 percent of those fans visiting Bing in the next month, she said.

“As long as it’s done well, and it’s not overly intrusive, I think it’s a good thing,” John Schappert, Electronic Arts’s chief operating officer, said in an interview. “It does offset the development cost and provide an early revenue stream for these games, for which many people don’t spend a dime on now.”

Google’s Games

Earlier this month, Google bought Jambool Inc., a provider of virtual-currency software and Slide Inc., a maker of games and apps for social sites. Walt Disney snapped up Playdom Inc., the second-biggest maker of games on Facebook, in July for $563 million. Japan’s Softbank Corp. invested 13.5 billion yen ($158 million) in Zynga and Electronic Arts in November bought games maker Playfish Inc. for $400 million.

More than just advertising in games, brands are also spending money developing social applications to attract consumers. American Family Insurance created the “IamFam” game that allows a user to build an avatar, settle into a neighborhood, outfit a house and shop at a local store.

Nestle SA’s Purina PetCare Co unit created the “Friskies Wonderland Quest II’’ game, where users find hidden food ingredients like salmon and chicken to move onto higher levels.

‘Still Too Small’

“We’re running 20-odd campaigns now on Facebook with advertisers,” said Dave Madden, a vice president for ad sales at Wild Tangent, a games company that worked with American Family Insurance and Nestle Purina. Wild Tangent also developed an in-game ad platform where brands air short commercials in return for users receiving virtual currency and items.

“These ads have to add value and they cannot take away from the game,” he said. “We’ve seen solid growth in our ads business and to say they would triple is a relatively achievable forecast.”
Not everyone is embracing in-games advertising, including some of the developers. Bigpoint GmbH, one of the world’s largest online-game providers, sees the market as “still too small for it to be interesting for us,” Chief Executive Officer Heiko Hubertz said in an interview last week.

“For now we make more money from promoting our own games than by selling ads for the games,” he said, estimating that casual players of social games on Facebook spend 10 euros a month on value-added services versus hard-core gamers who can spend 40 euros.

Vital to Marketers

With total ad spending on Facebook estimated at $1.28 billion this year, according to EMarketer, social media is vital to marketers.

Companies view social media as a core part of their online marketing spending, and not an “experiment,” said Victoria Ransom, the founder of Wildfire Interactive Inc., which has helped Nestle SA, The Gap Inc. and PepsiCo Inc. build social marketing campaigns.

“One of the ways we’re going after younger folks is to be in the places they are,” Honda’s Center said. “Young people are online; they live online and communicate online. We want to catch people where their interests lie.”

Source;
http://www.businessweek.com/news/2010-08-23/facebook-s-car-town-gains-honda-ads-in-games-shift.html