Q&A: Double Fusion Goes Casual, Talks Future Of In-Game Ad Models

As in-game ad firm Double Fusion partners with casual portal owners Spill Group, Gamasutra quizzes Double Fusion CEO Jon Epstein on the future of in-game advertising and the possibilities -- and impossibilities -- for purely free to play, ad-supported gam
In-game advertising provider Double Fusion has announced a partnership with casual game portal Spill Group, to serve casual games on Spill's U.S. portals and Spill Group owns more than 30 casual portals globally, and claims 60 million unique visitors per month among them. The partnership with Double Fusion, which includes sales of pre- and post-roll advertising, will bring Spill's U.S. userbase into the reach of DoubleFusion's ad network. When Gamasutra spoke to DoubleFusion president and CEO Jon Epstein, he parsed out the North American numbers. "On the casual side of our portfolio, this really propels us to a leadership position -- these sites have roughly 5 or 6 million in audience, according to Google Analytics," he noted. Segmentation In The Casual Space One element of the partnership that both companies highlight is that many of the portals owned by Spill Group target a more refined demographic within the broader casual space --, as an example. Epstein feels this speaks to increased segmentation among the casual games part of Double Fusion's portfolio -- he highlighted how his own young daughters, upon finding out about, preferred it over other, more generalized casual gaming sites. "To us that's interesting," Epstein says. "It allows us to offer advertisers, as this segmentation trend continues to evolve, very highly targeted audiences based around a site's content. So this continues our approach to have a broad portfolio, and it extends us into the Flash casual space all the way up to the high end consoles, and adds significantly to our overall reach and allows for more targeted ad buys." We also took the opportunity to ask Epstein about the recent skepticism expressed by Sony Group CEO Howard Stringer and Activision Blizzard CEO Bobby Kotick about the potential for in-game advertising growth -- and he doesn't necessarily disagree with them. Ads Can't Completely Fund Console Games Epstein agrees with Stringer that there are "far too many" businesses in the broader digital media spectrum that believe they can survive solely on an ad-supported basis. In response to Stringer's quote that "there is a limit to the amount of money available," Epstein said, "I don't think anyone would ever expect that ads would pay for the tremendous investment that Sony has made in the supercomputer-powered PlayStation 3 platform." Elaborated Epstein, "The industry believes Sony will embrace in-game ads, so it's really just a question of balance, and serving up ads in an appropriate manner -- whether that's inside of the PS3 games themselves, or on the PlayStation Network service." "I don't take issue with his comment that ads wont bankroll the PS3," Epstein added. "All [these companies] have developed a tremendous business based on, up until now, a retail sales model and on royalties, and I don't expect that to significantly shift -- although we are starting to see the beginning of ad-supported games on the consoles." Diversifying Models Activision's Kotick had commented, "young people don't like advertising very much," and Epstein agrees with that also -- with the exception of sports titles, where ads, which are a large part of the actual sports industry, enhance realism. Epstein's solution to that kind of consumer resistance -- and the unlikelihood of creating free console gaming -- is broadening the focus across a variety of arenas. "We are also focused very strongly on enabling the new free-to-play models, whether that's high-end MMOs or downloadable casual games, or Flash casual games. It's our position that, alongside the digital item model, we're in a position to double the worldwide audience by enabling free gameplay across those types of games." On the subject of Electronic Arts' recently-announced free to play shoot-'em-up Battlefield Heroes, Epstein feels it's a great sign of shifting business models, commenting, "For one of the world's largest publishers to visibly embrace an advertising and item-supported game with a very significant piece of IP sends a huge message to the market that times are changing." He added, "To do so in the Western world is even more significant. EA has tested these models in Asia where they are more prevalent. So I think it shows the foresight of John Riccitiello and the team at EA that they are trying these new models, and not afraid to speak about it." The Asia Effect It's also worth noting that EA's Battlefield Heroes is quite different in genre from the majority of online free to play games, which predominantly come from Asia where that business model was forged. How does Epstein think what could be perceived as a market saturation for these titles might affect the onward march of the free to play model? "Certainly, I'm seeing behind closed doors games that aren't coming from Korea or China that bring together the best of the ad-supported and item supported models," he said. Despite the success of some Asian-import online games, Epstein notes that many of them have not been successful, due to game style and what he calls a "lack of cultural remapping." He added, "To a certain extent, many of these companies have not followed the marketing practices that might be essential to drive a game's success in the Western world." But he stresses that he sees free to play taking hold for a broader variety of online games in the future. "Just like with retail games, not every free to play game is good, or great, perhaps. And people don't want to play a dozen games at the same time. they tend to coalesce their play around one to three games, perhaps. So I think it's just a matter of a little more time -- and the signs are there." As Epstein says, of a large amount of Western venture capital currently being invested in the game sector, much of it is in alternative business models, as opposed to much investment in traditional retail publishing models. Concluded Epstein, "In terms of the growth of sales in the field across both retail games and free to play games, we are seeing very significant up-ticks in advertiser interest and order size. And we have multiple titles for which we've now generated more than seven figures of revenues. So this market is progressing, and progressing well."

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