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Offerpal Media Inc. Confidential

Monetizing Social Games: A Step-by-Step Guide

Nick TalaricoDirector of Publisher Development, Offerpal Media, Inc.

First, a bit about Offerpal Media…

Management Team:

• Anu Shukla, Co-founder & CEO• Mitch Liu, Co-founder & VP• Bill Lonergan, CFO• Naghi Prasad, VP Engineering• Shannon Jessup, VP Sales

Quick Facts:

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

o Northbridge Venture Partners

o D.E. Shaw Ventures

• Launched October, 2007

• Publishers: 2,000+

• Global advertising offers: 5,000+

• 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.”

The Leading Social Advertising Platform

• More than 150 million user accounts created since October 2007

• 2,000+ publishers across multiple platforms and environments

• 5,000+ advertising offers in 80+ countries

• 30+ billion virtual points issued

Platforms

Applications

Worlds

Games

Offerpal’s turnkey payment platform allows online gamers to earn virtual currency for taking part in targeted, personalized advertising offers (or buy it through global payment options).

– Integrated within game play of social applications and web sites

– Deepens user engagement

– Increases stickiness and pageviews

– Improves virality

Top Social Monetization Solution

User Flow

1 2

3

2

4

UserEngagement

>$150 eCPM

<10¢ eCPM

CPM Banners

CPC Adsense

Monetization for Virtual

Currency and Digital

ProductsMonetization

<$1 eCPM

Card Games $400

MMORPGs

Tamagotchi Games

Racing

Owning

Pets

Green

$225

$200

$175

$150

$100

$75

eCPM

Category

• Network-wide eCPM: $150 – 200

• Average publisher payout: $75/day/1,000 users

• Conversion rate: >5% (40x better than traditional CPA)

• Revenues per completion: >$5.00

Virtual Currency Payouts

10 Steps for Monetizing Social Games

Tip #1(A): 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.

Tip #1: Define Your Sinks

Types of Sinks:

• Functional Goods• Decorative Goods• Behavioral Goods

Tip #1: Define Your Sinks

Types of Sinks:

• Functional Goods• Decorative Goods• Behavioral Goods

Step #1: Define Your Sinks

Types of Sinks:

• Functional Goods• Decorative Goods• Behavioral Goods

Step #2: Assign Currency to Your Sinks

• Use “in-game” currency to engage

• Use “RMT” currency to monetize

• Assign currencies to each sink or set of sinks

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

Step #3: Define Sources for Your Currencies

Types of Sources:

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

• RMT currency– Cash payments– Ad offers

Step #3: Define Sources for Your Currencies

Types of Sources:

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

• RMT currency– Cash payments– Ad offers

Step #3: Define Sources for Your Currencies

Types of Sources:

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

• RMT currency– Cash payments– Ad offers

Step #3: Define Sources for Your Currencies

Types of Sources:

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

• RMT currency– Cash payments– Ad offers

Step #4: Get them hooked

Balance engagement with monetization:

• Crack dealer: Engage first, monetize second

• Cheater: Allow all to play, but let people pay to cheat

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

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

=

Step #6: Launch Game

vs.

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

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

and social competition

Step #9: Maintain a Balanced Economy

Tips for a healthy economy:

• Try upping exchange rate for a day• NEVER flood your RMT currency• Don’t keep the economy too tight –

remember, it’s free to play• If they aren’t complaining, you

aren’t monetizing.

Step #10: Test, Measure, Optimize

What to test?

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

Attribute Graphs

Trend Graphs

Case Study: Mousehunt

Case Study: Mousehunt

Social websitesMMOGsDigital merchants…

About Mousehunt

• 481,643 MAUs on Facebook

• Developed by HitGrab, Inc.

• You are a hunter, hired by the king to trap the mice that infest his kingdom. For each mouse you catch, you'll receive a unique reward, with the aim of being the best in the land!

Mousehunt: Sinks

Social websitesMMOGsDigital merchants…

• Cheese– Varies by price

– Some better at attractingmice than others

• Traps– Varies by price

– Some better at catchingmice than others

• Travel to new locations– Different types of mice in

different locations

Mousehunt: Sinks

Social websitesMMOGsDigital merchants…

• Cheese– Varies by price

– Some better at attractingmice than others

• Traps– Varies by price

– Some better at catchingmice than others

• Travel to new locations– Different types of mice in

different locations

Mousehunt: Sinks

Social websitesMMOGsDigital merchants…

• Cheese– Varies by price

– Some better at attracting

mice than others

• Traps– Varies by price

– Some better at catching

mice than others

• Travel to new locations– Different types of mice in

different locations

Mousehunt: Sources

Social websitesMMOGsDigital merchants…

Earn Gold by…

• Catching Mice– The heavier the mouse, the more gold

you earn

• Accepting gifts from the King

• Picking up “loot” dropped by mice when they are trapped

• Returning surplus cheese, traps and crafting materials for a refund

• Or by…

Mousehunt: Sources

Social websitesMMOGsDigital merchants…

Completing Ad Offers

Questions?