Zynga explains why it is suspending offers in its games and why offer quality control is lacking

Mark Pincus, chief executive of Zynga, said in a blog post today that his company is suspending the use of offers as a monetization option in the company’s games until a better way to police them is found.

The decision stemmed from the launch of Zynga’s new game, FishVille, which had a couple of thousand users before it was shut down this weekend by Facebook. The social network put a halt to the game after scam-like mobile offers appeared in offers. Offers are special ads that users can participate in when they don’t have or don’t want to spend money with a credit card. These are offers like Netflix subscriptions, but a percentage of these ads are scams that wind up billing users for services they don’t realize they’ve signed up for. The issue generated a lot of publicity and controversy after a videotaped verbal fight between Techcrunch editor Michael Arrington and Offerpal chief executive Anu Shukla at the Virtual Goods Summit.

Just last week, Pincus said that Zynga had committed itself to police bad offers and remove them. He noted that offers are a small minority of revenue at the time. Tonight, in an e-mail, Pincus confirmed that less than 20 percent of revenues come from offers. Techcrunch dug up a video from months ago where Pincus joked about doing “every horrible thing” to generate revenue for Zynga, including using spam-like offers.

But, in spite of Pincus’ publicly stated commitment to improving the quality of offers, the problem arose again with FishVille. Techcrunch discovered that questionable mobile subscription offers had creeped back into the offer system which Zynga used. The social network suspended the game until it could be properly vetted.

So Pincus said in his blog post today at his company was suspending all cost-per-action (CPA) offers. Those include the offers that the startup DoubleDing was supplying to Zynga for the FishVille game. Zynga also uses other offer companies such as Offerpal. It’s worth noting that Shukla, who was replaced as CEO last week at Offerpal, told us in an interview that her tools allow publishers to review every single offer in the system and remove those that the publisher doesn’t think are proper. Super Rewards also has the same kind of offer removal feature.

But those systems evidently haven’t been implemented in the most intelligent way. At any given time, Offerpal has more than 5,000 offers in its system. It is hard to use the tools to weed out the bad offers and make sure that those eliminated offers stay out of the system and don’t creep back in, Pincus said. I asked Pincus why those tools weren’t adequate to ensure offer quality. He sent the following e-mail reply:

Yes, some of our offer vendors provide tools that allow us to take down specific offers if and when we discover they are noncompliant.

Offerpal is in fact one of those partners.   These tools however are reactive and not proactive and do not prevent offers from entering into the system prior to approval, nor are they effective in 100 percent error checking to make sure offers that were removed do not inadvertently make their way back into the system.

With thousands of offers streaming through our games it is difficult to completely police after the fact.  We learned that painful lesson this week as technical glitches or human error on the part of our partners can unwittingly put offers that are non –compliant into our games.

The only way we can commit to 100 percent compliance is to take complete control over the process and approve each and every offer that goes live. Currently no partner offers a work flow that we can be completely confident in and that is why we chose to remove the offers till we can put it in place.

We do not have an estimate as to when that will happen but are working with our partners to insure a superior user experience where our users can avail themselves of high quality offers, each of which has been vetted by us for compliance and quality.