Blue-Chip Clients Choosing Blockdot For ‘Advergaming’

“Advergaming”—the convergence of advertising and online gaming—is garnering new and bigger adherents, and a little shop in southeast Dallas is reaping the benefits.

American Airlines, Kimberly-Clark, DirecTV, Radio Shack and Nokia are just a few of the clients that have hired Blockdot Advertising in the past 18 months to develop customized games for online sites.

“More and more companies are beginning to understand advergaming,” said agency president Dan Ferguson, adding that he expects his business to double this year. He would not disclose billing figures.

In fact, the entire category is expected to explode in the coming years. Market researcher David Cole at DFC Intelligence expects revenue from online-game advertising to rise from the current $120 million a year to $500 million in 2009.

“The value [of advergaming] shows up in what the corporate sponsor pays the developer, which is a lot smaller than what a traditional game publisher would spend,” Cole said.

The category is attracting new players on both the client and agency side. Atlanta-based Studiocom last month announced it was creating an online-game development division to serve clients such as Coca-Cola and Twentieth Century Fox. Other major developers include Skyworks Technologies in Hackensack, N.J., Groove Alliance in Hollywood, and WildTangent in Redmond, Wash.

Whereas a large gaming company can charge upward of $500,000 for developing an advergame, Ferguson said Blockdot’s online games cost between $20,000 and $100,000. “We’ve talked to clients who were just blown away by what some of the other game developers were asking,” Ferguson noted.

Operating on the premise that most consumers are only going to be playing online games for seven to 10 minutes at a time, Blockdot keeps costs low by using a store of customizable game engines at its Kewlbox.com site, one of the top 50 gaming destinations on the Web.

The shop also develops new games for clients when requested. DirecTV, for example, wanted an all-new game to promote the Court TV channel and expand its marketing data on existing customers, explained Penny Finders, project manager in loyalty and retention for the satellite broadcaster.

“From the get-go, I was hugely involved in the design, often working with Dan and the others,” Finders recalled. “We went through it piece by piece. It was a complicated game.” While the promotional campaign for the story-based game—which involves solving a mystery through clues—cost DirecTV about $300,000, the game itself cost $70,000, Finders said.

At American Airlines’ promotional agency, DDB Dallas, account supervisor Emily Howard said the ad shop invented the game “Chair-iots of Flyers” and had Blockdot develop it for a sweepstakes promotion. The game served as a viral campaign by allowing users to compete with friends or to send links to others via e-mail.

“We found people spent a lot of time playing the game,” Howard said. “Overall, it would be considered a successful promotion.”