RockYou's Deal of the Day: High-Conversion CPE Ads for Social Games

RockYou are today launching their “Deal of the Day” (DOTD) ad unit, which gives flash game developers the ability to offer and monetize deals on virtual goods and services. This offering is part of RockYou’s ad network, which reaches 280 million people across most of the major social networks. Lisa Marino, Chief Revenue Officer at RockYou, in an interview with SocialTimes, provided a bit of insight.

DOTD is based on CPE, or Cost Per Engagement ads. RockYou says that DOTD is “social gaming’s first brand-sponsored” CPE in-game ad solution. Advertisers set an action to be completed — e.g., watch a video, download a coupon, fan a Facebook Page, complete a mini-poll, etc. — and successful users are awarded either virtual currency or a discount on virtual goods or services.

Lisa Marino — who gave a standing-room only talk about social game monetization strategies at GDC 2010 (Game Developers Conference) on Tuesday Mar 9th — said that RockYou can guarantee brands certain performance levels for various user activities because of the company’s cross-platform network reach.

Marino also said that DOTD, which was tested on RockYou’s own games, “Converts at an order of magnitude higher rate than anything in an offerwall.” She suggested that DOTD will work for games with any size MAU (Monthly Active Users). “Offerwalls are very lower-funnel. Our take on it is, lower-funnel only gets you so far because most people have to whip out their credit card. People want to level-up in games and they’re willing to do a lot in order to make that happen for themselves.”

DOTD, on the other hand, is “upper-funnel,” meaning users don’t have to pay anything to gain some benefit, such as extra points in a game or access to another level. So it tends to convert at an “unbelievably high rate.” RockYou found completion rates for their DOTD sponsored ad units as high as 50%. As a result, ARPU (Average Revenue Per User) for social games increased, and as much as 25% of a game’s user base converted, compared to a more traditional 3-5%.

Online deals are becoming a big thing, with major buzz being given to deals companies like Groupon and LivingSocialDeals, and also offered to social gamers through competitive networks such as Peanut Labs’ Cherry Deals Discounts.