zynga-ipo

Ad Insights From Zynga's IPO Filing

  |  July 1, 2011   |  Comments

A relatively small player in digital ads - for now.

zynga-ipoAds 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.

 

Tags:

ClickZ Live San Francisco This Year's Premier Digital Marketing Event is #CZLSF
ClickZ Live San Francisco (Aug 11-14) brings together the industry's leading practitioners and marketing strategists to deliver 4 days of educational sessions and training workshops. From Data-Driven Marketing to Social, Mobile, Display, Search and Email, this year's comprehensive agenda will help you maximize your marketing efforts and ROI. Register today!

ABOUT THE AUTHOR

Zachary Rodgers

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. 

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Media newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

BigDoor: The Marketers Guide to Customer Loyalty

The Marketer's Guide to Customer Loyalty
Customer loyalty is imperative to success, but fostering and maintaining loyalty takes a lot of work. This guide is here to help marketers build, execute, and maintain a successful loyalty initiative.

Marin Software: The Multiplier Effect of Integrating Search & Social Advertising

The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.

WEBINARS

    Information currently unavailable

Jobs

    • Interactive Product Manager
      Interactive Product Manager (Western Governors University) - Salt Lake CityWestern Governors University, one of the 20 largest universities...
    • SEO Senior Analyst
      SEO Senior Analyst (University of Phoenix (Apollo Education Group)) - San FranciscoSEO Senior Analyst   Position Summary...
    • SEM & Biddable Media Manager
      SEM & Biddable Media Manager (Kepler Group LLC) - New YorkAs an Optimization & Innovation Manager at Kepler Group, you will be on the bleeding...