Instagram, Snapchat, and the new age of game marketing

Game marketing has evolved in a lot of ways in the past few years. We thought it was time we asked an expert gaming analyst about where everything is going.

Mike Vorhaus, the president of Magid Advisors, founded Frank N. Magid Associates‘ Internet practice in 1995. He’s been analyzing the game industry since 2001, and he leads Magid’s operation, advising investment firms on media and technology assets. Vorhaus has been a columnist in Ad Age and is quoted regularly in mainstream publications. His latest data shows that you can reach gamers through new social networks like Vine, Pinterest, Instagram, and Snapchat. You can also reach the old folks like me through networks such as Facebook.

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Vorhaus will speak at the Game Marketing Summit in San Francisco on April 22. I caught up with him for an interview on game marketing. Here’s an edited transcript of our conversation.

Above: Instagram’s menu

GamesBeat: Do you have a particular talk outlined for the Game Marketing Summit?

Mike Vorhaus: I’m doing a specific session: “Social and Mobile Convergence in a Wireless World.” I’m just going to present some of our recent social network data. It’s not limited to gaming. That’ll include all the traditional social media sites we’ve been tracking, their progress and waxing and waning. The visual ones – Instagram and Vine, new ones like Periscope – those are on the rise. Facebook is down a bit with teenagers, which we’ll talk about.

GamesBeat: What does your research show about social networking and how things get passed around?

Vorhaus: We show a big increase year over year in Instagram usage, Vine usage, Pinterest usage. It’s obvious. It’s all going more toward the visual. If you look at Facebook – realizing that most users don’t know that Facebook owns Instagram – it’s about static in terms of penetration of users, but you see a small decrease, a measurable one, in teenage penetration. I think that’s going to continue. They’re picking up a lot of those people off Instagram, so Facebook incorporated is not losing those people.

GamesBeat: So old people are on Facebook and young people are on something else?

Vorhaus: Young people have been heavily gravitating toward the new visual social media and the advanced messaging services, Snapchat in particular in the U.S.

Gamesbeat: What do you notice as far as differences by region?

Vorhaus: This study is just a U.S. study, but it’s pretty well-known where WhatsApp is dominant versus where WeChat is dominant. In the U.S. WeChat is not that strong. Snapchat is the strongest one. This is all based on work we did late last year, so it’s almost current.

I don’t think there’s any question that you’ll see more and more teens using those services and sticking with them as they become adults. These advanced messaging services are becoming direct competitors to Facebook and Twitter.

Above: Facebook CEO Mark Zuckerberg at F8, March 2015.

Image Credit: Facebook livestream

GamesBeat: I went to the F8 conference, where Facebook talked about making Messenger into an applications platform, opening it up. It had 40 apps, but only one game — Talking Tom, which isn’t really a game. It said it did not want to do what the Asian services do, which is open up its messenger service to game spam. Services like Line and Kakao do a great job of getting games noticed, but they’re constantly spamming people. Is there something in the U.S. that’s more appropriate as far as how you get the word out to people?

Vorhaus: First of all, whether or not something’s truly spam depends on how interested you are in a game. So many Chinese users of WeChat have tried so many of the hundreds of games that WeChat promotes. I suspect some of them see that more as discovery than spam. I’d imagine American gamers would feel roughly the same way.

The big challenge for Facebook–If they’re not going to use Messenger to promote gaming and drive installs of games, what’s the business model? It may be that they don’t need one, because they have the whole Facebook advertising business. But for WeChat it’s been really important. The games and the payments they get for downloads are their main business model. Messenger, in the United States, is going to have a rough run for its money.

GamesBeat: It says that it’s OK with user-generated content being shared on the Messenger network for things like Talking Tom. If there are games that embrace UGC, that’s the way it would be able to get them distributed virally.

Vorhaus: Facebook and Mark Zuckerberg clearly have super high levels of consumer happiness concern. They’re even more sensitized to it as the privacy issues have been bouncing around the press. But that’s great. If you can afford to dial back the advertising in certain pieces of your service, good for you.

Above: Talking Tom from Outfit7

Image Credit: Outfit7

GamesBeat: When you think about the state of game marketing, are you happy? What do you think about how it’s evolved?

Vorhaus: On console, most of us in the industry are pretty happy. It’s a bit more expensive than it used to be. Maybe a lot more expensive for the big titles. TV has gotten to be a bigger piece of these really huge games. On the other hand, TV advertising works really well for the huge games. The console guys think they have a good opportunity with traditional mass media for the big games, and a much better opportunity today than five or 10 years ago for viral and social-driven discovery of smaller games.

The big guys, whether they make PC or console games, have found the whole YouTube platform wonderful for their trailers and TV ads and user-generated stuff about new games. A game comes out and on day one, hundreds of people have already filmed themselves playing the game and put it on YouTube. That’s basically free advertising for game-makers. YouTube has also been a good platform for mobile games and web games. People have been happy with the viral opportunities there.

Myself included, people are worried about the high price of some CPIs. If it’s really true that people are out there paying $20 or $25 per install for non-commerce, non-gambling apps, does that just price everyone else out of the market? The reality is you can still go and get $1 and $2 CPIs. It’s just a much broader audience. But everybody I talk to who isn’t spending $20-25 is worried about this. If all CPIs cost that much, most people won’t be able to do any install marketing. It would be entirely dependent on the lists and viral.

The other thing in the marketing world of the last couple of years is that consumers and companies are happy that there’s not as much list manipulation as there used to be. It used to be that it was relatively easy to go trick your way into the top lists, which drive so much traffic. People are glad that’s not as bad as it used to be.