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Slide title goes here… Offerpal Media Inc. Confidential Nick Talarico Director of Publisher Development, Offerpal Media, Inc. www.facebook.com/ntalarico @nptca Monetizing Social Games: A Step-by-Step Guide

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Ten Tips on How to Best Monetize Social Games

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Page 1: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Slide title goes here…

Offerpal Media Inc. Confidential

Nick TalaricoDirector of Publisher Development, Offerpal Media, Inc.

www.facebook.com/ntalarico

@nptca

Monetizing Social Games: A Step-by-Step Guide

Page 2: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

First, a bit about Offerpal Media…

Page 3: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Management Team:

• George Garrick, CEO• Mitch Liu, Co-founder & VP• Bill Lonergan, CFO• Mihir Shah, CRO• Naghi Prasad, VP Engineering• Shannon Jessup, VP Sales

Quick Facts:

• 100+ million Unique Visits / mo.

• 4+ million transactions / mo.

• Venture capital funded: June, 2007, and February, 2009o Interwest Partners

o Northbridge Venture Partners

o D.E. Shaw Ventures

• Launched October, 2007

• Headquarters: Fremont, CA

Company Background

“Offerpal Media is built on the science of inserting scientifically targeted and relevant advertising offers into the virtual economies of social web sites, games and applications.”

Page 4: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

In 2007, Offerpal Media launched the first platform to give consumers a way to earn virtual currency for free – whether by participating in targeted ad offers, completing online surveys or shopping at brand-name retailers.

Today, we have:

• 165 Million User Accounts

• 4,000 Advertising Offers

• 2,000 Publishers/Developers

• 750 Billion Virtual Points Issued

• $19.6 Million in Venture Funding

Pioneer in Virtual Currency Monetization

Page 5: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

User Flow

1 2

3

2

4

Page 6: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

First, some things to consider…

Page 7: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Not All Games Monetize the Same

DeVitoSchwarzenegger

Page 8: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

UserEngagement

>$150 eCPM

<10¢ eCPM

CPM Banners

CPC Adsense

Monetization for Virtual

Currency and Digital

Products

Monetization

<$1 eCPM

Card Games $400

RPGs & MMORPGs

Resource Management Games

Owning

“Trivia”

$225

$200

$150

$25

eCPM

Category

Consider:• The Type of game – compelling theme & mechanics? (below)• The Demand for Virtual Currency• The Balance of Sources & Sinks (+ Non-Monetizing Sources)• The Promotion of the Monetizing Sources• User Engagement & Retention (DAU:MAU)

All of these things, when optimized, will improve monetization.

Not All Games Monetize the Same

Page 9: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

First of all, Make It Fun

Before you do anything, ask yourself:

• Is your game fun?

• Will users come back?

• Will they invite their friends?

If not, go back to square one. Monetization mode comes AFTER your game is engaging and viral.

Page 10: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

And now…

10 Steps for Monetizing Social Games

Page 11: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Tip #1: Define Your Sinks

Some Types of Sinks:

• Functional Goods• Decorative Goods• Behavioral Goods

Page 12: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Tip #1: Define Your Sinks

Types of Sinks:

• Functional Goods• Decorative Goods• Behavioral Goods

Page 13: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #1: Define Your Sinks

Types of Sinks:

• Functional Goods• Decorative Goods• Behavioral Goods

Page 14: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #2: Assign Currency to Your Sinks

• Dual Currencies:– Use “in-game” currency

to engage users– Use “RMT” currency to

monetize

• Assign currencies to each sink or set of sinks

• The decision to use multiple currencies may be one of the biggest decisions you make.

Happy Harvest uses “Game Coins” for its engagement currency and “Credits” for RMT currency.

Page 15: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #3: Define Sources for Your Currencies

Types of Sources:

• In-game currency– Missions/Quests– Logging in

• RMT currency– Cash payments– Ad offers– Shopping– & more to come…

Page 16: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #3: Define Sources for Your Currencies

Types of Sources:

• In-game currency– Missions/Quests– Logging in

• RMT currency– Cash payments– Ad offers– Shopping– & more to come…

Page 17: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #3: Define Sources for Your Currencies

Types of Sources:

• In-game currency– Missions/Quests– Logging in

• RMT currency– Cash payments– Ad offers– Shopping– & more to come…

Page 18: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #3: Define Sources for Your Currencies

Types of Sources:

• In-game currency– Missions/Quests– Logging in

• RMT currency– Cash payments– Ad offers– Shopping– & more to come…

Page 19: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #3: Define Sources for Your Currencies

Types of Sources:

• In-game currency– Missions/Quests– Logging in

• RMT currency– Cash payments– Ad offers– Shopping– & more to come…

Page 20: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #3: Define Sources for Your Currencies

Types of Sources:

• In-game currency– Missions/Quests– Logging in

• RMT currency– Cash payments– Ad offers– Shopping– & more to come…

Page 21: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #4: Get them hooked

Balance engagement with monetization:

• Engage your users first & monetize once engaged

• Allow all to play, but let people pay to advance more quickly

• Focus on constant balance between sources and sinks (the sinkhole must always be slightly larger)

Page 22: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #5: Set Your Exchange Rate

Tips on setting the exchange rate:

• Too low = low perceived value• Too high = high inflation

• Find the sweet spot by using Offerpal’s Multivariate Testing Platform (free like all Offerpal products)

=

Page 23: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #6: Launch Game

vs.

Users of Facebook games expect them to be alive… constantly evolving and improving. Release games when they’re not 100% finished and iterate with improvements as new features.

Page 24: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Promotion = Monetization

• Add a tab to “Add Credits”

• Include balance in a status bar

• Use newsfeeds, notifications, banners and other messaging opportunities

Step #7: Promote Your Virtual Currency

Page 25: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #8: Keep Demand for Currency High

What drives demand?

• User psychology– Self-expression– Collection– Achievement

• Limited edition goods• Level-specific goods• Perishable goods• New, fresh content • Global leaderboards &

social competition

Page 26: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #9: Maintain a Balanced Economy

Tips for a healthy economy:

• Try upping exchange rate for a day & promoting it to users.

• NEVER (ever) flood your RMT currency. Ever. Seriously.

• Don’t keep the economy too tight – remember, it’s free to play

• If your economy is too loose (if it’s too easy to acquire currency), then you’re missing out on monetization.

Page 27: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Step #10: Test, Measure, Optimize What to test?

• Exchange rate• Price points• User Interface options• User patterns

• Use the Offerpal Virtual Currency Analytics System(free like all Offerpal products)

Attribute Graphs

Trend Graphs

Page 28: Offerpal Media  - Ten Tips For Monetizing With Virtual Currency (Nick Talarico, Facebook Developers Garage - Taipei)

Questions? Sign ups?

www.Offerpal.com

@Offerpal

http://myofferpal.wordpress.com

www.facebook.com/ntalarico

@nptca