giftgaming is a patent-pending in-game ad service and startup supported by Accelerate Cambridge, Cambridge Judge Business School.
Ever get stuck on a game? Don't want to buy in-app purchases or watch annoying video ads? Introducing giftgaming.
Brands give powerups, extra lives, etc. (with coupons) to players and we deliver them as surprise gifts to you! We currently have a UK game company with over 12 million players who wants to trial our service.
Typical workflow of giftgaming:
1) You see a gift icon
2) You tap the icon when convenient
3) You receive a powerup from a brand
4) You optionally save a coupon (in-game)
5) You return to game.
giftgaming is built on Scala, the same technology used by LinkedIn, Twitter and Intel, and the Lift Framework (used by Foursquare).
With giftgaming, we hope to see an entirely new business model called "freebium" which combines freemium, advertising and freebies to preserve the gaming experience.
With giftgaming, we aim to put an end to intrusive in-game advertising that is destroying immersive gaming experiences. Right now they are being ruined by incredibly intrusive and irritating advertising (such as video ads). We will restore gaming to its former glory with our service.
In Peter Lorenz's words (Former Jagex VP of Business Development and Former WildTangent Director of Business Development EMEA)*, giftgaming "offers a non-disruptive, friendly and very nice way of actually monetising a game."
Ultimately, we hope to change how players see brands completely; adding value to the gaming experience, rather than being a mere intrusion. Also, players thinking better of the game companies who use giftgaming, as they have opted to use a service which gives players free in-game content.
* - Please note that all views and opinions expressed herein represent only the individual’s and not their previous or current employers.
Substantial accomplishments to date
OVERALL Winner of TechCrunch London Meetup
Private beta launched on Amazon and on the Thundrclap game
Trademark series granted for words "GIFTGAMING" and "GIFT GAMING"
- Brand emails us asking about trial partnership
- Game company with 12M+ players interested
- Former Jagex WildTangent VP of Business Development and Former WildTangent Director Business Development EMEA gives giftgaming his blessing
- Was a finalist in UK gov's Digital Innovation Contest: Smart tools for brand loyalty in partnership with Procter and Gamble:
- Alpha testing began.
- Filed patents
- Press coverage in DeveloperTech
- Won "Best Pitch Award" at Cambridge Startup Weekend 2013
- Secured a place at The University of Cambridge Judge Business School's startup accelerator, Accelerate Cambridge.
Currently we charge an advertiser (i.e. a brand) upfront for advertising impression credits. We take a commission percentage of whatever they pay and give back a certain percentage to the game company for each impression served.
An "impression" in this case is defined as each time the brand is displayed; this would happen each time a gift is "opened" i.e. when a gift button is clicked.
Later, game developers would also be able to advertise their own games (cross-app advertising) to drive installs.
However, impression-based is preferable for game companies, performance-based advertising is preferable to some brands we have been in discussion with (i.e. only charging for every coupon saved). We may be able to be flexible on this depending on the game company, but since the game is giving out freebies, the game company will most likely expect some payment for presenting the brand as generous to the player (rather than just giving them exposure).
Use of proceeds
In summary if we raise £10,000: - £9,000 for basic 12-month CEO salary - £1,000 for legal contracts.
The reason we are raising little in our first round is because we believe we are close to securing our first client. However, if we raise £25k, this will give us longer until our next funding round, at which point we should have a few customers and thus can fundraise at a much better rate.
Though we are close to securing our first client, it takes a lot of time to get a brand to agree to be a trial partner, especially with larger brands; it has to go through several departments and management members before a brand will make a purchasing decision.
Therefore we would like to use proceeds to pay our full-time CEO a small salary because we need the business to keep momentum in order to get to market fast enough and to stay ahead of the competition.
We have made great progress so far and we would like to continue performing.
Our target market is two-sided: global and upcoming brands who want exposure and consumer loyalty, and game companies who make “freemium” games (free-to-play games funded by in-app purchase and/or in-game advertising), with a focus on mobile and online browser-based games. Famous examples of these games include:
- King’s “Candy Crush”
- Supercell’s “Clash of Clans”
- Jagex’s “Runescape”.
However, it is the brands who will be paying.
Whilst we are bootstrapping we are aiming for B-title/indie mobile games rather than AAA-title/blockbuster mobile games as our servers can only support so many players at present.
In future though, we think with a large enough infrastructure and investment, integrating into mobile gaming giants' games is very much a possibility given our solution integrates naturally and reuses the game's existing infrastructure.
Game companies will want to outsource to us because they already have enough to worry about with developing their own games, let alone worrying about maintaining a scalable in-game advertising platform, and managing client relationships.
Creating custom branded items is not cost or time effective and is not particularly scalable as it involves negotiating what the item will be and how it will be used in the game. Moreover, for the brand it only offers exposure and not conversions - in today's marketing climate, return-on-investment is becoming more important.
We believe browser-based games could be targeted; there are many games on the browser-gaming services, which are part-funded by video ads played at the start of games. This can be frustrating to the player who has to watch it every time they want to play a game, especially if it is the same video.
In the future, we would like to reach console (PS4/XboxOne) games; companies like EA Games have started using in-game advertising in games such as Battlefield 4 and we think other companies may follow suit. Console gamers would much rather get free in-game content!
Characteristics of target market
The percentage of players who make in-app purchases is incredibly low: 1.5%, despite King’s success with Candy Crush and freemium. One way to compensate is with in-game advertising, an industry where spending is estimated to be $7.2 billion and is predicted to account for 78% of total game advertising revenue by 2016 (DFC Intel, 2011).
With Rovio's 2013 profits down by half, EA's Battlefield 4 players angry at in-game movie ads, and King dropping in-game ads for being "too intrusive".
there is high demand for a solution like giftgaming from both gamers and game companies alike.
Free games account for half of the European games market. On the App Store alone, there’s over 260k games and entertainment apps and an increasing trend of games with in-app purchase; 93% of apps use a freemium model.
In the UK today, non-gamers are now the minority.
Marketing will be a big part of our strategy; one common question the company got at Advertising Week Europe is “Have you heard of Kiip?”. They currently have a reputation for real-world rewards and innovative in-game advertising. Our pending trademark "GIFTGAMING" will hopefully change this soon. In comparison to our competitors, our company name is more descriptive of what we do (but abstract enough to be trademarkable) and we believe it will have strong associations with the idea of giving in-game gifts to players.
In-app purchases are the life source of freemium game companies and so our marketing will be heavily focused around this, emphasising our solution can work in harmony with them and potentially be the first in-game advertising network to increase in-game spending.
Focusing on rewards in the digital world (giftgaming) rather than real world (Kiip) is more likely to attract game developers based on companies we have spoken to. giftgaming gifts also work similar to Apple's in-app purchase system; we will highlight this to game developers to show how natural it is to integrate into their game.
As we have a two-sided market, there is a “chicken and egg” problem with acquiring sufficient numbers of brand customers and game companies whose games would serve those brands. One way to solve this is by making key contacts with those who are marketing/brand managers, at events like Advertising Week Europe and iMedia Summit. So far both have proved fruitful in making high-level contacts. After finding interested brands, we then try to find a suitable B-title/indie game company whose games would fit the brand's nature and target demographic.
Our competitors tend to have "a value exchange" i.e. the player must first watch an advertisement to receive an in-game item, etc. We however give the in-game item first and give it as a gift to the player, so the player develops a positive relationship (rather than negative) with the brand. This a selfless act of the brand; a welcome change for many players.
With giftgaming, a game company can deliver a gift at any time meaning brands can buy a lot of gifts, ensuring more money for game companies than moment-based competitors (MediaBrix & Kiip), who have to wait for high scores, etc. Surprise gifts are also the best way for customer loyalty (Barnes, 2001), which will make giftgaming the best solution for brand loyalty.
Allowing coupons to be saved in just two-clicks without asking for an email address or requiring the installation of another app should give our brand clients a much higher coupon save rate. We can also provide location-based coupon reminders; not only does this give our brand clients a better service, it also means players do not forget about their exclusive offers!
Supporting platforms other than mobile is one way we can exploit our competitors weaknesses. We feel our competitors focus too much on mobile and we believe there could be more innovative in-game ads on PC/console. We also feel more focus could be given to the needs of game developers; they want to boost sales as much as brands. Therefore there will be potential for game companies experimenting with what gifts are given. Patents will be used to help defend our business and prevent competitors who may have bigger funding or more resources from copying us.
We truly believe in keeping the most important customer happy: the gamer. The gamer keeps both the brand and the game company in business, so unlike competing solutions, we will never ask the player to do something we would not do ourselves, thus ensuring we are the best in-game advertising service solution in future.
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