FreshNetworks Blog

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Social gaming is a hot topic here at SXSW. The industry has been growing at an incredible rate and traditional gaming companies have been caught unaware by a flurry of new market entrants.

Playfish was one of the 2009 success stories. Within two years of starting the company, they are attracting 60 million monthly players and are selling 90million items a day (virtual goods and unlockable gameplay). It’s also been a huge personal success for the founders, who sold the business for £240 million last year.

I noticed that Sebastien de Halleux, one of the co-founders of Playfish, was speaking on a panel this morning so I went along. It has been one of my SXSW highlights so far. Here are a few notes (NB comments are paraphrased).

How are social games different to what’s gone before?

SdH: The design of the games is the main difference. Rather than an immersive story-telling experience designed for gamers it’s a social experience designed for non-gamers.

ET: Story’s have endings so are not as scalable or well suited to social gaming platforms.

OA: It’s like going back to how we used to play board games with friends. From faceless gaming back to connecting with real people. There’s also a massive shift for the gaming industry; the economics of gaming is driving business model changes.

JD: Social has brought gaming to the masses. Facebook has also had a profound effect on what people are prepared to share online. People are open about their identity and that’s helped drive the big shift.

ET: The difference is that games can now transmit themselves through invites and gifting. So the opportunity is for a game to pass through recommendation not through marketing. As a result you don’t have to be a big brand or established business to have success. Just focus on creating good games.

Lessons you have learnt and surprises

ET: It’s useless to predict what will work in the future (social gaming) from the past (traditional gaming). For example, who would have thought a game about farming would be a runaway hit. You have to try a wide variety of things. Find a success and then drive hard into it.

SdH: Speed of the industry has evolved. Don’t even think about a change from time cycle in years to months to weeks. We think in evolutionary cycles – EA has published 17 versions of FIFA in 17 years, and our Pet society game has already been through hundreds of evolutions. It is constantly evolving with continuous feedback into each step.

JD: We’ve learnt that social games are living, breathing services. They are not stand-alone games or products. If you launch one, you are committed to it. The volume  of feedback, and the emotion behind it, is incredible.

ET: We’ve learnt that gameplay is there as a delivery mechanism for the content, or as a facilitator for social interaction. It’s not the reason for being

SdH: Launch early. We launch at a 10% completion milestone. We launch unfinished products and that’s fine as early feedback helps you get the game right.

Monetisation of social games

SdH: In-game micro-transactions are key. The game is free and we create emotional incentives that make people want more of the game. Audiences are ready to pay for good games, but in small chunks. Just don’t get fooled into believing that you need large ticket transactions. Try not to think in terms of a business plan based on: Price x Quantity. Instead, think about Distribution x Engagement x Lifetime User Value.

ET: we’ve found that there are two things that can have a disproportionate impact on profitability:

• Creativity / self-expression – allowing people to be creators makes them care more and increases their life time value.
• Competition – player vs. player conflict drives a willingness to pay for competitive advantage.

What’s the place for gaming brands in social?

There was some disagreement on this one.

OA: brands will take over this space. For an example, look at the success of Dante’s Inferno, an average game that got traction thanks to the brand.

SdH: The value of brands in a retail world was huge. It helped them fight for shelf-space and increased trust at the point-of-purchase. But there is no shelf space in social games [not sure I agree with this as we all look at the “top 25”]

Social gaming is driven by invitations from your friends. Direct emails into your inbox from people you know, alleviate the need for brands as a purveyor of trust.

But brands will be have a role especially in their ability to make you care more about a game by mixing offline with online. E.g. FIFA. There is a huge opportunity to innovate here as we move towards games with 1Bn players.

When it comes to other brands taking part (e.g. Coke) advergames do not work well as people see through them. However it is possible to create engagement models where brands add to the experience.

How will mobile gaming integrate with social gaming?

SdH: mobile is difficult to integrate. There are so many issues to balance if someone starts a game on the web then wants to continue playing on a different platform like iphone.

We are running a service. Running a service on the iphone is hard as they are built for application download. There are workarounds, but microtransactions in games are difficult (iphone does not allow individual item purchase, nor do they allow gifting). The factors that drive success on the web are difficult to replicate on mobile.

ET: The trick of getting social mobile to work will be hitting the union (think Venn diagrams) not the intersection of iphone and Facebook. There needs to be a synergy of multi-platform, not just a replacement.

Mobile is more like a way of making money out of what we already have.

Then it got controversial.

OA: we want Xbox and Facebook fully connected. Games will become fully transferable between the web, mobile and your TV screen.

ET and SdH: this has been forecast for years, but will not happen.

Things to watch

• The frictionless monetisation of Facebook credits is exceptionally powerful
• Location aware games like Gowalla and Foursquare.

Abbreviations:
SdH Sebastien de Halleux – Playfish co-founder
ET – Eric Todd, Playdom
OA – Omar Abdelwahed, Ubisoft
JD – Jon David, PopCap Games
GD – Gareth Davis, Facebook (moderator)

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Another day at SXSW, and a good seminar on crowd sourcing and not-for-profits. The ‘Crowd sourcing innovative social change’ session saw Amy Sample Ward, Beth Kanter and others talking about how to use crowd sourcing in a not-for-profit environment, not for fund raising or marketing, but for service and programme delivery. One interesting distinction was between a ‘crowd’ and a ‘community’ and how this impacts the model you use.

As with other SXSW sessions, rather than reproduce the conversations after the event, here are the hand-drawn notes taken during the session itself.

SXSW: Crowd sourcing innovative social change session notes

You can also see Amy’s presentation from the session here:

Read all our posts from SXSW

Day Two of SXSW and one of the most interesting sessions we’ve been to so far was ‘Can the Real-Time Web Be Realized?’ including Brett Slatkin from Google, Dare Obasanjo from Microsoft and Scott Raymond from Gowalla among others.

Rather than regurgitate the content of the session, we’ve included our low-tech hand-drawn notes from the session below.

SXSW: Real-time web session notes

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SXSW image by benjamin ellis

This week I’m going to be reporting from the South by South West Interactive (SXSWi) festival in Austin Texas. SXSW is World’s largest digital and interactive festival/trade-show/conference/party/event/get-together. Around 20,000 people will be joining me in Austin to uncover the latest thinking in digital and, I suspect,  to network like nutters.

I’ve been looking for an excuse to make it to SXSW for years. A few months ago my prayers were answered and FreshNetworks was picked by UK Trade & Investment (UKTI) to be one of 40 companies chosen to represent the UK at the festival. The grandly titled Digital Mission aims to help UK digital companies expand internationally and develop overseas business relationships.

The list of events is monsterous. It’s taken me a few hours to get my itinerary in order. I suspect I have fallen into classic SXSW-newbie mistake of trying to plan out a perfect route between each session to ensure a schedule that optimises my time here. I’ll probably find the plan goes in the bin half-way through day1 one.

Some frantic session planning on the plane

Here are just three of the sessions I am looking forward to:

• Time + Social + Location. What’s next in mobile experiences – Foursquare and Gowalla are hot properties inn the social media world at the moment. This session includes Naveen from Foursquare.
• Can the Real Time Web be Realised – a panel debate featuring some great speakers – Scott Raymond, co-founder of Gowalla, Marshall Kirkpatrick of ReadWriteWeb and Bret Slatkin from Google who created PubSubHubBub which you will hear a lot about in 2010.
• Banking 2.0 – financial services driven by people and emerging technologies – as a social media agency, FreshNetworks has always done a lot in the financial services sector, so I am keen to test some ideas we’ve been discussing back at base.

And finally, one of the delights of coming to SXSW as part of the Digital Mission is the opportunity to spend lots of time with other UK entrepreneurs. I have always found that spending time with peers not only gives me new ideas, but also (because I’m rather competitive) it tends to raise the level of my personal ambition.

There are a few companies that I am especially interested in learning more about:

• oneDrum – embedding collaboration in Microsoft Office documents
• Silence Media – cost per engagement ad network for video banner ads
• Slicethepie – crowdsourced band/music funding

Let me know if you want me to bring you anything back from Texas.

Read all our posts from SXSW

I’ve just been playing with FourWhere. It’s a mashup of Foursquare location data and the Google Maps API. It has been built using the Sysomos social media monitoring tool

It is neither as fun as PleaseRobMe nor as useful as Wikitude, but it is mildly interesting to see what is being said at venues near me. And more features are promised in the future.

Most of all, this mashup reminds me of why I have been impressed with Sysomos recently. Sysomos is behind this mashup and they are  one of many Social Media Monitoring tools that we use. Over the past month they have really cranked up their PR efforts and seem to be emailing me with news every week. For examples see their analysis of Oscars buzz and their look at how people use YouTube.

In the next month we’ll be releasing a study of buzz tracking tools (subscribe to the blog to ensure you get to see it) and Sysomos have scored highly with many of our team. Their tool is very easy to use – especially good if you are likley to have multiple people from your company accessing your social media monitoring dashboard. They also allow for post-search filtering of results; essential for international or multi-segmented buzz tracking projects. And they also offer a simple influencer search.

There are drawbacks – for example,  I would treat the sentiment analysis with care. One test we ran on blog sentiment showed a 40% innacuracy in sentiment analysis (once you strip out neutral comments). But overall, it’s a good tool if put to proper use. They are definitely one of the market leaders and we look forward to telling you how they compare to Radian6, Neilsen Buzz Metrics, Alterian and many more over the next few weeks.

I’m a podcast fanatic. I listen in the shower, on my cycle to work (sorry mum, I know that’s not safe) and when swimming (using the excellent Speedo Aquabeat). I have tried hundreds of different podcasts to find some that are consistently good. I thought you might like to know my favourites I’d love to hear about yours.

Social Media Podcasts

1. Jaffe Juice and JJTV – author of “Join the Conversation”, Joseph Jaffe is a coherent and straight-forward social media commentator. Some of his podcasts are conversations with other industry leaders which can take occasionally random, but generally interesting paths.
2. For Immediate Release - by Neville Hobson and Shel Holtz. Recorded in the US and UK, this podcast provides a frequent deep dive into weekly events in the PR-focussed social web. I enjoy listening, but always do so at double speed – it’s very long and I feel they can spend more time on issues than necessary.
3. CMO 2.0 Conversations – Francois does an excellent job of securing some superb client-side interviews for these podcasts.  He has a very relaxed style that gets people talking, but sometimes I wish he’d push them harder for more detail or hold them to account on some of their statements

Marketing and Digital Podcasts

1. 3 Minute Ad Age – short and snappy. Often a video from a marketing conference. Wide subject area so it can be hit-and-miss, but great for filling that few minutes of a journey.
2. HubSpot TV – a digital marketing weekly TV show from the lovely people at Hubspot. The show is full of great guests and bristling with sexual tension. I often think I’d like to listen in double time, but being a video, I have not worked out how to do that yet.
3. DishyMix – I’ve been listening to Susan Bratton since meeting her during the Travelling Geeks trip to the UK. She’s an excellent interviewer – never lets her subjects off the hook with wooly statements. Some of the topics veer off into self-help and I do find myself having to fast through the adverts, but in general she gets strong guests and uncovers interesting insights.
4. NMA podcast – now only monthly. A useful overview of what’s been going on in the UK digital marketing scene

Other good podcasts

1. David Maister’s Business Masterclass – everything you ever wanted to know about running a successful services business. I always listen to Maister in the week leading up to my board meetings because he gets me thinking. It’s a bit like having a virtual (and free) non-exec.
2. More or Less, Behind the Stats – Before FreshNetworks I started the research consultancy, FreshMinds. I suspect it’s my background in research that makes this my favourite podcast. Tim Harford, FT journalist and author of The Undercover Economist, brings an indepth analysis of every-day statisitcs and seeks to uncover dodgy analysis.
3. The Bottom Line with Evan Davis is another BBC Radio4 podcast. Some excellent business guests (usually UK CEOs) and gentle probing from Evan make this a good listen. For some reason I find this is always where  start with when going for a run in the park. I particulary enjoyed the recent argument about PR
4. Business Week – Behind the Cover Story – This is the best Business Week podcast. There is also a good innovation one and the Welch Way with Jack Welch. Sadly John Byrne, Executive Editor,  seems to have handed over his host role to others in the editorial team. That’s a shame as he had a wonderful style and eclectic music choice. But it remains a good topical podcast.
5. Economist podcasts – I never find time to listen to all of these. A great shame as The Economist’s journalists deliver sharp insight and a beautiful turn of phrase at every opportunity. Recently I have enjoying their new book of the month episodes.
6. Great Lives – Matthew Paris piecing together some womderful biographies of famous folk with celebrity guests
7. Harvard Business Ideacast – useful overviews of the books that HBR authors are about to publish.
8. TED talks – no list would be complete with out mentioning these amazing set of downloads. some of the world’s most interesting (and random) speakers on topics that range from global finance to microbiology. Ken Robinson is a must-listen.
9. Listen to Lucy – Lucy Kellaway of the FT taking an entertaining swipe at corporate bullshit. If you’re after something more heavy-hitting, Martin Wolf the FTs Chief Economics Commentator, is excellent. But you really have to concentrate. Sadly I’ve had to stop listening whilst cycling as I almost crashed twice trying to decipher his arguments.

That’s my listening list. What’s on yours?

There are many opportunites for the insurance industry in social media. Afterall, it’s the ultimate experience good – you can’t judge the quality of what you have purchased until you claim, potentially years after payment.

As a result, it’s well suited to storytelling and sharing of experiences. Ratings and reviews have the potential to be an especially powerful tool for the insurance industry.

But social media marketing isn’t the only game in town. The insurance industry has another opportunity – using social media as part of the actuarial process. Insurance firms prefer to cover people who are less likely to claim. Social media may provide ways of helping to qualify in or out some people.

Have a look at Please Rob Me. A site that aggregates people’s check-ins on Foursquare and their GoogleBuzz locations to tell you who is away from home. Right now.

It is just a bit of fun, but the site makes an important point and should provide food for thought for armies of actuaries up and down the land.

—  —  —
PS for an insurance-related social media case study, here’s an example of a research community that we built for a client

Trojan Horse from shutterstock

A post on the econsultancy blog this week told the story of Jason Calacanis’ iPad hoax. This is the most recent example of social media spreading lies at pace.

The viral potential of social media makes it a powerful tool for seeding and rapidly diseminating information. Sometimes that information is accurate and sometimes inaccurate. And it’s a sad indictment of human gullibility that messages originating from a seemingly respected source are too often believed first and questioned second.

There are also numerous examples which show that well-packaged information, shared on social networks, can make patently false statistics seem plausible.

Below are two videos that did the rounds last year. Thanks to good production skills, the videos appear to be professional and as a result they were believed by far too many people. The first video is pretty harmless – a riff on the Did You Know video mixed in with a little Social Media Evolution.

Did You Know 4.0

The second video is more worrying. It’s a politically motivated anti-muslim film that masquerades as balanced (it was apparently uploaded by “firendsofmuslim”). However it is highly charged and many of the key statistics are false.
Muslim Demographics

Sure, it’s the message, not the medium that is the real issue here. And social media ought to be capable of quashing the incorrect information, fallicies and hoaxes just as it lets them propagate in the first place. The online community from Snopes is a great example of social-media-driven crowdsourced fact checking.

And, I’m glad to say there were a few responses to the Muslim Demographics video that tried to set the record straight. For example, BBC Radio4’s More or Less team probed (as they always do) the claims in more detail and posted the following response to clarify inaccuracies.

Muslim Demographics: the truth

Yet there is still reason for concern. Over 11million people watched the sensationalist version and only a few thousand saw the responses. I think the makers of this video have achieved their aim. They successfully used social media marketing to spread anti-muslim feeling and distrust.

Traditional v’s Social Media
But we live in a world of dodgy dossiers. Just because social media can spread lies, does that mean we’d have been better off sticking with traditional media?

Traditional mass media does have a reputation to protect: newspapers may have built up their brand equity over decades, they face a higher risk of lawsuits and have to answer to ombudsmen, shareholders and advertiser pressure.  Compare that to an upstart video-jockey with a good idea for making a splash and you can see that there is a lot less to lose.

The Economist on social networking - world of connections

What joy. This week,  The Economist, every Capitalist’s favourite magazine, has published a special report on on social networking.

A World of Connections, provides an excellent overview of the current state of social media for those still trying to get to grips with it. You can download a free pdf of the report here. Or check out my summary of key highlights below.

Introduction: A world of connections

1. “Online social networks are changing the way people communicate, work and play”
2. Facebook users post over 55m updates a day. 70% of users live outside the US.
3. Social networks are superb tools for mass communication [NB the report is a bit light on their strategic use as a driver of 1-to-1 customer-to-company communication]
4. “the most avid online networkers are in Australia, followed by those in Britain and Italy”
5. Social Networks have “become important vehicles for news and channels of influence”. Indeed, they “played a starring role in the online campaign strategy that helped sweep Barack Obama”
6. To sceptics all the “talk of twittering, yammering and chattering smacks of another internet bubble in the making“. Social networks still “need to prove to the world that they are here to stay”

“This special report … will argue that social networks are more robust than their critics think … and that social-networking technologies are creating considerable benefits for the businesses that embrace them, whatever their size. Lastly, it will contend that this is just the beginning of an exciting new era of global interconnectedness that will spread ideas and innovations around the world faster than ever before.”

Facebook’s growth: Why social networks have grown so fast—and how Facebook has become so dominant

1. How the network-effect can drive lightning fast growth on a relatively modest marketing budget.
2. An openness to external developers helped create thousands of apps. These apps provide part of the service and additional reasons to spend time on Facebook.
3. Social networks have been beneficiaries of a fall in the cost of data storage and have also been “able to use free, open-source software to build systems that scale quickly and easily”
4. In a feat of technical wizardry, Facebook’s engineers “quintupled the performance of an open-source memory system called memcached, which allows frequently used data to be retrieved faster than if stored in a database.
5. Facebook Connect is one of the firm’s most important innovations as it allows members to take their social graph wherever they go on the web.

Twitter’s transmitters: The magic of 140 characters

1. A key difference between Facebook and Twitter comes from the nature of relationships that underlie them. “On Facebook, users can communicate directly only if one of them has agreed to be a “friend” of the other. On Twitter, people can sign up to follow any public tweets they like”
2. The most prolific 10% of Tweeters account for 90% of all tweets
3. Another big difference between Twitter and Facebook is in the kind of content that gets sent over their networks. Facebook allows people to exchange videos, photos and other material, whereas Twitter is part-blog, part e-mail [I disagree with this. On the surface Twitter looks like a text tool, but many tweets link to videos, photos or other media].

Social Networks making money: Profiting from friendship

1. When it comes to turning users into profits, social networks face two issues. Firstly, users are taking part to spend time with friends, so they do not pay attention to ads. Secondly, brands are nervous about appearing alongside unregulated comments and other content.
2. Click-through rates are low, but the amount spent on adverts is increasing despite the recession.
3. In part this may be because Marketers recognise the value that personal recommendations can have on buying behaviour. And social networks provide an opportunity for viral marketing.
4. During 2009, Facebook turned cash-flow positive on revenues thought to be in the region of $500m.
5. Games, virtual gifts, premium services and search rights are becoming an important part of some social networks’ revenue streams

Social Media for Small Business: A peach of an opportunity

1. They cover the well known Kogi BBQ social media success story and mention that according to Razorfish 44% of people follow brands on Twitter  for deals [NB the methodology used in this research was rightly brought into question by Susan Braton in a recent DishyMix podcast]
2. Social networks can provide a great launchpad for startups thanks to their reach.
3. This article then randomly veers off into social gaming. A subject that deserves it’s own dedicated piece. But you can’t have everything.

Internal social networks: Yammering away at the office

1. Social networks are being used to break down internal barriers in the corporate world.
2. Informal conversations they allow can be a catalyst for creativity and new ideas.
3. “The networks are also a great way to capture knowledge and identify experts on different subjects within an organisation”

Recruitment in a social world: Social Contracts: the smart way to hire workers

1. Social networks, such as Linkedin and Xing help firms cut search costs
2. Business social networks help improve the efficiency of the labour market
3. They have also made recruitment more transparent as recruiters go onto social networks to check up on candidates ahead of making an hire

As an aside, if you’re interested in social media for recruitment here are a few relevant posts from our sister company, FreshMinds Talent:

How to use Web2.0 for recruitment
Social Media and the forefront of the job market
How to imporve your Linkedin profile

Privacy in social media: Privacy 2.0

1. Privacy could be the Achilles heel of social networks. Users could decide to start reducing what they are prepared to share with the world online.
2. Social networks have been developing privacy controls that give users the ability to edit what can and cannot be seen. However these are often hidden away within sites and social networks are making blatant attempts to encourage more sharing of data not less.

The Future of Social Media Towards a socialised state

1. Social connectivity could become ubiquitous
2. Mobile adoption will fuel future growth in social networking
3. Facebook says that mobile users of the site are almost 50% more active than regular users
4. Geo-networking apps may be the next big thing [unsurprisingly, the Economist can't resist a fleeting mention of Foursquare, the social network tipped for big things in 2010]

Conclusion

It’s great to see social media and social networking getting reported in such depth by mainstream media. This Economist report is not exactly cutting edge when it comes to social media insight or analysis. However it does provide a great base level for the 99% of the business world who do not spend their days glued to Tweetdeck.

Even if the above is not new to you, I recommend you read the report purely for a lesson in good business writing. As ever, The Economist delivers on elegant prose that neatly and efficiently flows from point to point.

Was there anything in the report that leapt out at you?

FreshNetworks, Social Media Agency

You may have noticed we’ve just rebranded, launched a new identity and redesigned our site. I thought it might be worth giving a quick explanation. I also wanted to take the opportunity to mention what it is we do (just in case you only know us for our blog).

Back in 2008, FreshNetworks was primarily a provider of social media technology. Whilst we always had a range of social media agency services wrapped around the tech (Community Management, Social Media Strategy and Social Media Monitoring), we led on being a technology provider – a builder of online communities.

The change in brand and design reflects our progression from being primarily a developer of online communities that happens to offer supporting social media services to a full-service Social Media Agency with in-house community building capabilities.

On it’s own that flex in emphasis was perhaps not worthy of a rebrand. However, as most entrepreneurs can attest, you often kick off with a brand and identity that you’re only 80% happy with because it’s more important in the early days to focus on your attention on delivering some great results for early clients. Thus the change in emphasis to a Social Media Agency was an opportunity to rethink our identity.

What are the services of a Social Media Agency?
Our services cover three areas: Listening, Planning & Execution and Technology

Listening
We use a range of different social media monitoring tools to carry out one-off Social Media Audits and on-going buzz tracking and reporting.

Planning and execution
These cover both consulting and on-going agency services. From helping organisations tie down their Social Media Strategy to providing ongoing Online Reputation Management and Community Management support.

Technology
We use our Online Community Platform to embed social tools (e.g. blogs, video sharing, ratings and reviews) into exisitng websites. And we also create standalone online communities. Some communities are closed (e.g. research communities or VIP advocacy communities) and others are open to all to help encourage search or directly increase sales by activating Word-of-Mouth.

We’re very keen on our new design. And we’d love to get your feedback.