Games Player

Facebook’s launch of a new set of games, called Instant Games, available for play both on the core Facebook platform and its spun-off Messenger app, is a new step but also a bit of a throwback for the social network.

Facebook beta-launched 17 games, including old school titles like Pac-Man and Space Invaders, which can be played in app, whether the user is on a desktop, laptop or, more likely, a mobile device.

While Facebook’s sharing and communications utilities are what made it the cultural juggernaut that it is, gaming has played an outsized part in its history, contributing a significant amount of its revenue in the early days, when it was still experimenting with ways to unlock the advertising potential of the platform.

A survey by AYTM suggests that game-playing is still a widespread activity on Facebook. AYTM found that almost half of social network users said they played games on social platforms at least occasionally, and half of those said they did so regularly. While the survey didn’t ask about gaming on specific platforms, Facebook users predominated the survey group—92% of those who said they used social networks were on Facebook.

The AYTM survey suggests that, at least at the moment, user interest in playing games on a social platform is not likely to change much. When asked if they were likely to play a social game in the next year, 38.7% said they probably wouldn’t —almost the same number who said they had never played a social game.

Some 15% of the time users spend on Facebook is devoted to games, according to a report in the Wall Street Journal, and games generate $45 million in monthly revenue, down from $65 million in December 2011, according to a Piper Jaffray estimate.

At that level, games make up only small slice of Facebook’s overall revenue. Most gaming revenues are accounted for in Facebook’s financials as “payments and other.” eMarketer estimates that such revenues will make up less than 3% of the company’s total this year. That revenue mix is not projected to change much over the next two years.

E Marketer PRO of Reviews

For decades, TV advertising time has been valued and transacted on the basis of delivering the standard age and gender audience segments, such as adults ages 25 to 54. But richer, more descriptive advanced targets are emerging to form the basis for secondary audience guarantees, supplementing the primary benchmarks.

Advanced targets are created by combining first- or third-party consumer purchase data with TV viewing information, resulting in TV ratings that better reflect advertisers’ targets as opposed to the standard age and gender descriptions.
In the 2017–2018 TV season, secondary guarantees made on advanced target delivery could account for as much as 10% to 15% of the inventory sold by those network groups that are leaders in data-driven targeting.
The variety of advanced TV offerings introduces new complexity to the marketplace. Differences in the data sources used to create these targets make it difficult for media agencies to evaluate offerings vs. their own in-house TV investment models. Third-party verification of network-produced advanced TV ratings will be inevitable as advanced targeting scales.

Advanced TV offerings will eventually include targeting capabilities across both TV and digital—which currently make up more than 70% of spend for a typical media plan. TV and digital targeting is a longer-term prospect, given the networks’ primary focus on selling just TV inventory. The undertaking also requires integration of TV and digital audience estimates within a closed system.
TV networks have begun to work more directly with advertisers, many of whom are providing networks with first-party customer and transaction data to develop more precise TV targeting and gauge ad effectiveness on network properties.

TV Merger Moves Forward

21st Century Fox finalized its deal to acquire Sky, the largest pay TV service in Europe, the latest combination in a global wave of consolidation in the TV industry, which is responding to rapid changes in the way that consumers watch video programming.

From the perspective of overall market growth, the pay TV sector hardly seems like the most attractive investment, with many researchers foreseeing slim growth in users or revenues this decade.

Ovum estimates that pay TV revenues for the region as a whole will grow only 12% from 2015 to 2021—a mere 1.88% compound annual growth rate.

Data from other researchers paints a similar picture. According to a report from Digital TV Research Limited, the total number of pay TV subscriptions in Western Europe will barely edge higher in coming years, reaching 175.2 million in 2021, up from 172.2 million in 2016—a compound annual growth rate of less than 1%.

Pyramid Research says that pay TV penetration at the household level will grow to 60.2% in Western Europe this year, up from 58.6% in 2015.

Whatever the growth of pay TV, overall video consumption is growing rapidly, and Sky is a key provider of a particularly compelling content format—sports. “Despite the fact that pay TV subscriptions are dwindling, the Sky acquisition makes sense since pay subscribers are willing to pay for sports and entertainment content that is unavailable elsewhere,” said eMarketer analyst Gerard Broussard.

That highly compelling content is valuable however consumers end up viewing it—whether OTT or some other digital format, and whether it is monetized via advertising or subscription payments.