NEW YORK Greystripe, which distributes and acts as an ad server for mobile games via its GameJump portal, has inked a partnership with Asian mobile community network myGamma.
The alliance combines myGamma's 1.5 million members with the San Francisco startup's 5 million gamers to create a global user base that brings Greystripe closer to its goal of building critical mass.
Such syndication gives advertisers the ability to target specific consumer demographics. MyGamma, which is owned by Singapore-based BuzzCity, targets mainly 18-34-year-old early adopters, the same demographic as GameJump's.
The deal also facilitates the viral distribution of marketing messages.
"Games right now on phones are very individual and insular," said Will Hodgman, CEO of mobile communications tracking firm M:Metrics.
Companies like Greystripe are aiming to change all that, and its point of differentiation stems from combining an ad network piece with a dedicated free mobile game distribution platform.
Greystripe's basic proposition is simple: Eliminating fees will boost the popularity of mobile games.
One clue, said CEO Michael Chang, is that only 15 percent of U.S. subscribers whose handsets support multimedia are willing to pay for games priced at $2-12, yet Greystripe reports downloads in the 40-50 percent range.
Chang is betting the business model will start to draw big advertisers in 2007 and make inroads into the $3 billion-a-year mobile gaming market. (The ad-supported mobile game market should reach $10.5 billion by 2009, according to The Yankee Group.)
An expanding universe of free games, the proliferation of compatible handsets and a growing consumer base will in turn increase the number of advertisers supporting free games, Chang said.
The company can expect heightened competition soon, with Google and Yahoo reportedly eyeing the sector and recent entrants like mobile in-content ad server Amobee Media Systems muscling in.
According to internal reports, GameJump's 350 games from 40 publishers fielded 1.4 million downloads during the last four months of 2006. Its adjunct ad serving platform supports 1,000 or so multimedia-friendly handsets on the global market, and distribution deals have brought the service to more than 100 countries.
As of November, 96 million U.S. subscribers had mobile devices with photo and video capabilities, up 70 percent from December 2005, per M:Metrics. Mobile multimedia content sharing doubled during that span.
Free mobile gaming among viral networks has "huge potential," according to Cindy Mesaros, marketing vp at mobile content provider Moderati. The company's Modtones brand began advertising on GameJump before its August launch to test click-through rates to the ringtone provider's site. It has since seen rates of 10 percent, Mesaros said.
Another Greystripe advertiser, Zagat Survey, has recorded less than half these click-through rates, about 4 percent. However, Dan Entin, the destination guide company's product manager for Internet and wireless platforms, partly attributes this to Zagat's older demographic.
Still, the 4 percent range is "an order of a magnitude greater" than Zagat has been getting on the Internet, said Entin, where 0.2 percent is the industry standard for banners. (WAP banners average click-through rates of between 2-3 percent, according to ABI Research.)
Zagat is running two ads, including one for its Zagat to Go mobile search application. For now, it is foregoing Greystripe's targeting capabilities, preferring instead to exploit the full game network until the user base significantly expands.
Mesaros observed that most mobile game play typically occurs when users have "five minutes to kill." Given that they're used to getting games gratis on the Web, "people can't justify paying" for them on the go, so they accept commercials as part of the bargain, she noted.
GameJump runs two five-second ads before and after each game session, though it says it will expand into in-game ads in upcoming months.
The ads fill the screen and require some form of action: click-to-call or click-to-mobile site, for example. This in an approach that Craig Daitch, director of interactive strategy at Omnicom Group's PHD, described as the "purely visual" nature of most mobile game advertising.
"One glaring issue in the mobile gaming space is that it's really more on an impression level," he lamented.
Yet, he doubted Greystripe's pre- and post-rolls are as effective as weaving product placements within mobile games, a multi-million dollar segment of the console game business. "Experiential interactivity within the games themselves—actually incorporating a brand's products—that's where I hope it goes," said Daitch.
The pre- and post-roll formula also finds a critic in Amobee svp, gm Roger Wood. He claims the practice, "predetermines the format of the inventory and its placement" in a way that may not maximize the advertising potential of mobile games. Amobee favors consulting with the publisher and carrier to decide what ads will look like, explained Wood.
For Entin, the problem isn't placement, but mobile media's inability "to track what happens after somebody clicks on an ad," as advertisers have come to expect online. The shortcoming is industry-wide.
Until mobile architects iron out such kinks, they'll have to wait before mobile content, including games, will attract significant spending from top tier advertisers, said Wood.