A relatively small player in digital ads - for now.
Ads represent a small but growing piece of Zynga's business, the company revealed in its IPO filing today. That will surprise few, since the company's revenue from virtual products is known to be huge by comparison to its nascent ad business.
But that ad business shows signs of breaking into the big time, as the S-1 filing demonstrates in today's first official glimpse into the social gaming giant's operations.
In 2010, advertisers spent $22.8 million with Zynga on a range of ad types including premium brand integrations such as what the company has done with McDonald's, Bing, and Farmers Insurance. For comparison, that puts Zynga's ad sales at one-fifth that of Pandora, which also recently filed for its IPO.
Zynga's non-advertising revenue by contrast was $574.6 million last year - more than twenty times what it takes in for ads.
Interestingly, Zynga's ad revenue actually fell last year as the company's user growth skyrocketed. The reason: the social gaming giant decided to reduce the number of "in-game offers" in a bid to improve the user experience.
The decline in ad revenue seems likely to reverse itself this year. In the first three quarters of 2011, Zynga's ad revenue grew again compared to Q1 2010 - hitting $13 million, up $9.9 million over the $3.6 million in the year-ago quarter.
Zynga claims 60 million daily active users and 232 million monthly uniques in 166 countries. Its ad types include:
-Engagement Ads, in which players can field questions about brand preferences and purchase behavior in exchange for in-game currency. For instance, a user might answer questions about her American Express card.
-Branded Virtual Goods, in which a brand ties advertising deeply into game play. The best-known examples are Farmers Insurance in FarmVille, Bing, Coca-Cola, and McDonald's. Paramount recently launched a campaign in CityVille offering an in-game item to drive awareness of Kung Fu Panda 2.
-Mobile Ads, which are served into free versions of Zynga mobile games like "Words with Friends" and "Hanging with Friends." Advertisers have included Amazon, eBay, and HBO, while Zynga has used the space to cross-promote other mobile games.
What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!
Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects.
Singapore, 3-4 November
Hong Kong, 8-9 December
Hong Kong, 8-9 December
Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.
5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.
December 9, 2014
1:00pm ET/10:00am PT