Thursday, July 15, 2010

If you have money, then invest in Zynga right now

Zynga is starting to have their games (in particular FarmVille) branded. This means they are selling their virtual goods as ads. If you play Farmville and you need a new item to harvest your land, it might be sponsored by General Mills. At the same time if you go to 7eleven or Target you might buy celery which has a sticker on it to unlock General Mills celery in FarmVille.
This is one of the best moves I saw in the last twelve months of a company.
Not only does Zynga a lot of revenue by selling to players virtual goods but at the same time they are combing two things we like to do the most with advertising. Playing games and social.
Everybody is talking about that an user in average 29 minutes of Internet usage is spending in facebook. But almost everybody is ignoring that we spend more than a half of this time with playing games.
Zynga could get advertising space number one if they have the right longterm concept. No other method could give so accurate numbers about relationship of online marketing and in store buys. Nobody would have such a high reach and ad recognition than game embedded advertising like these games. Zynga has 30 million players daily cross platforms.
But FarmVille is only one of many Zynga games. In the top 10 facebook games are 10 Zynga games ( nobody can right now come close to Zynga. All top ten together are more than 60 millions players a day. If each player sees in day just 50 branded items and their message this would give an impression of 3 Billion impression. If Zynga is selling them for a $9 CPM then the daily revenue would be $27 million a day, which would be $9.8 billion a year plus the goods selling which Zynga does already target $1 billion this year. Google does right now around $25 billion a year revenue.

I believe if Zynga is smart enough and extend their games to other platforms and can keep the attraction they can be bigger in revenue than google.

If you did not already, keep an eye on Zynga, we will hear much more from them.
Zynga was founded in 2007 and did already $290 million in 2009. Zynga is a good example how a company can get big by being a subset of a bigger hype.

- Posted with My iPad

Location:Spinning Wheel Ln,Spring Hill,United States

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