The last time we spoke with RockYou’s Lisa Marino, she’d just been made CEO after a wild ride from chief revenue officer to chief operating officer in a two-year period. Now that some of the dust has settled and RockYou is releasing games again after an empty 2010, Marino is ready to reveal the developer’s new role as a social games publisher and ad platform.
In a way, neither role is “new” to RockYou. In 2011, the company announced a publishing deal with John Romero and Brenda Brathwaite’s Loot Drop studio for its new game, Cloudforest Expedition. The company’s also been selling ad inventory as far back as 2008 when RockYou didn’t really have a games portfolio. Now, however, the company’s different components have gelled in a way that allows RockYou to formalize a publishing partners program that leverages its ad platform and social games experience gleaned from Zoo World, Zoo World 2, Gourmet Ranch, and now Cloudforest Expedition.
Inside Social Games: So how’s that CEO position working out for you?
Lisa Marino: Well RockYou is never short of surprises, but things in general are going quite well. We’ve got four game launches in about four and a half months, so we’re busy little bees. In addition, we’re in the process of launching our ad platform and working on case studies with Gourmet Ranch. Those will be done in the next six weeks or so. At that point, not only will it be integrated in all of our games, but we’ll be able to work with third-party developers to help them monetize better through brand advertising.
ISG: Gourmet Ranch has been going through a lot of changes lately. We’ve seen it spike on our growth charts against after falling off sometime after the royal wedding campaign ended. Can you talk about what’s going on there?
Marino: We were marketing it pretty aggressively through June, took a bit of a break to work on a couple of key new feature launches that we had — one of them will be out on Thursday; it’s exotic animals. We tested a variety of new features and functionality in the last 30 days and what came out of that was some really interesting user engagement and a really stable player base. So now we’re actively marketing the game again as of about three weeks ago.
ISG: And the ad platform you mentioned? How has that evolved into something you plan to integrate with Gourmet Ranch?
Marino: [Brand sales] have been core to our DNA for a very long time. Previously we were selling inventory on our reach apps — but it wasn’t until we started getting game inventory with Zoo World and now Gourmet Ranch and Zoo World 2 that the ad platform was able to make its full migration from reach apps to core gaming executions.
So we’re just finishing up a lot of new products for that platform and we’re integrating them into our games. We definitely still have Deal of the Day — Facebook is rolling that out with TrialPay, it did such a good job on tests we’re doing with them. So we’ve got that unit, we’ve got standard display… But the difference between [then] and now is, when you think about display in-game, it’s not just an ad for Toyota, it’s not just an ad for psychic reader network. It’s very much a strategy around how we cross-sell, how we promote and merchandise in our game.
Let’s say Gourmet Ranch was running their Beach Party [campaign] — which ended last week — we could do a lot of merchandising through the display units with the ad platform in addition to serving brand impressions, in addition to doing cross-sell. [There are] all sorts of things we can build channels around and communicate to our user base. What we’re testing right now is how to optimize those experiences. So, is there a difference between paying users and non-paying users? Do certain types of placements respond better than others? Like, if I show an impression for merchandising through virtual goods five times and they don’t click on it, maybe I shouldn’t show it again, maybe I should show a Toyota ad, maybe I should show them a cross-sell opportunity? We’re going through all that optimization right now, but it’s going to be a really powerful ad platform. We’ve seen in Zoo World, in each space, an [average revenue per user] of 25%. When you’re talking about the [lifetime value] of a user that’s very substantial.
We haven’t put the platform in Zoo World 2 yet. That’ll definitely be by the end of August. Right now, Gourmet Ranch is going to be the guinea pig, for lack of a better term. We’re going to go through the pain with them to get it right.
ISG: Will the platform also be in Cloudforest Expedition when it launches this summer? How did you work that in as part of the publishing deal with Loot Drop?
Marino: [Yes.] Loot Drop’s game is in the process of being brought in-house. We’re not acquiring them, but once the game is done, we’re going to run the live environment. The game is getting close enough that some functions are beginning to come over. As part of the things that we can take care of early on are the message center, integration to the analytics, working through the ad platform and what types of integrations we want to do — so that work’s all being done right now while those guys are finishing up the game.
Going forward, we’re probably going to work with them on a lot of design and feature elements for the first several months after launch, and a lot of the tuning. But we will definitely be the ones largely responsible for the game and it’ll finally shift.
ISG: Do you plan to model the publishing partners program after your interactions with Loot Drop? Will all developers eventually have to shift their games over to RockYou’s care?
Marino: Absolutely not. We’ve got a couple different levels of opportunity. Something like a Cloudforest is an extreme version of publishing for us. There’s a lot of other games that are already complete, or getting close to completion and the developer wants to leverage RockYou’s distribution capabilities and still wants to run the game themselves. Other developers say “Hey, I just want to build games, I want to leverage not just your distribution, but your analytics platform, your Q&A, your community support.” All the infrastructure that we have for games. So it really depends on the partner that we’re talking to and what makes sense from a deal perspective for both of us.
ISG: The publishing model is definitely picking up speed in 2011. Why do you think more developers are seeking out partners now than they were a year or so ago?
Marino: Distribution is incredibly difficult and expensive. We’re going through four game launches in four months and fortunately we had a war chest in the bank. Had we not had that and a strong infrastructure around analytics, and the ad network, which provides additional distribution for us, we’d be in a similar position to a lot of developers. That’s been a really core area of focus for us in the last 90 days now that we’ve got some games coming out. A big focus for us is acquiring users that we don’t have to pay for. If you read the Zynga S-1 they were really clear that the majority of their users, they don’t pay for. That said, they’ve got a very large marketing budget as well.
So [publishing] is definitely more of an art than a science in terms of how we can creatively go after users — not necessarily in the viral capacity but in the organic capacity. Part of it’s how you optimize Facebook channels. Part of it is things that we can do as RockYou on our own ad network — we still serve almost 300 million impressions a day. Some of it is that we still have reach apps [to bring new players into the network]. At the end of the day, in the Rock You network, the games are incredibly important. The quality of them needs to be extremely high and competitive.
ISG: Are there any concerns from potential developer partners that RockYou might steal ideas for its own in-house game development?
Marino: Our philosophy on publishing is, we want to bring what we know how to do well to the publishers. We’re pretty open and transparent. We also look at these deals, we want to treat them like our own owned & operated. It wouldn’t make sense for us to sign a publishing deal that we don’t want to actively promote from an ad spend perspective. I don’t see us publishing 20 games a year, I see us publishing four to eight. And the four to eight for me means that we’re actually going to be spending money on those and supporting them just like we would an owned & operated game.
For me, it’s a much more compelling model not just for us but for the developer as well. And there’s just as much secret sharing from RockYou to the dev as there is the other way around. Every one of our publishing partners is getting a product manager. We’re going to teach them what works in message center, we’re going to teach them how to optimize virals. We’re going to teach them, potentially, game mechanics. We’re going to give them access to our analytics so they can see “Hey, users are falling off at level 4, how do we punch through that?”
ISG: When do you expect to see RockYou’s first official publishing partners game release?
Marino: We haven’t announced any [partners] yet. We’re currently building the pipeline. We’ve got about eight to 10 that we’re looking at. We just started talking to developers in earnest about this opportunity about four weeks ago. Whenever you’re talking any sort of deal execution — whether it’s an acquisition or brand sales, it does generally take 90 days to work through it. So, we’re optimistic that we’ll have a game published probably late this year, maybe a little earlier. Our goal internally is Q4.
For us, this year was a big [release] year. We didn’t get any games out in 2010 which was somewhat challenging for our company… that’s an understatement. Because games are always late, we ended up with a lot of games coming at once. We didn’t intend for that to happen, but it’s [good] that it is happening because we’re able to build out the player network and the scale particularly in a demographic around 40-year-old moms this summer very aggressively. We’ve got Gourmet Ranch, Zoo World 2, we’ll have Cloudforest… and a fourth game that’s in that demographic, but not the same genre, that’s coming out in about October.
ISG: 40-year-old moms and it’s not about pets, huh? Does that mean it’s a puzzle game?
Marino: Possibly. We’re not talking about it.