Population Statistic: Read. React. Repeat.
Thursday, November 09, 2021

The Web 2.0 tech boom is underway, and the wunderkinds are doing their thing on shared servers and shoestring budgets, much to the consternation of venture capitalists with money to burn.

Some have gone without venture capital altogether or have raised far smaller sums than venture investors would have liked. Many were sold for millions before venture capitalists could even get in. That has been a challenge for venture capitalists, who have raised record amounts in recent years and need places to put that money to work.

“V.C.’s hate it; they want you to take big money,” said Jay Adelson, who is the chief executive of two start-ups, Digg and Revision3. Digg took some venture money, but far less than backers offered, and Revision3 has been running on about $850,000 raised from a group of angel investors.

Which means VC firms need to write smaller checks, just to get their foot in the door:

Several venture firms are seeking to adapt. Just last week, Charles River Ventures announced it would offer loans of $250,000 to entrepreneurs as a way to gain access to promising start-ups. Other firms are also giving out small loans, albeit not as a part of any formal program.

For its part, Mohr Davidow Ventures has increased the number of “seed” investments — small sums given to embryonic companies — to about 10 a year from 5. And Union Square Ventures, which was formed in 2003, has made nearly half of its investments at $1 million or less, a departure from its initial plan to make first-round bets of $1 million to $3 million, according to its Web site.

“I think there is in the V.C. community a sense that the rules have changed or are changing,” said John Battelle, a journalist and entrepreneur, who is a host of a technology conference in San Francisco this week that will include a panel on the subject. “How does the V.C. who is set up for a model that requires millions, if not tens of millions, revamp for a different scale?”

Assuming they want to stay in the Web game, this operating environment practically screams for a sort of microloan-style investment structure. That would require a volume-based funding strategy for VCs, instead of selective engagements in search of Google-like homeruns.

- Costa Tsiokos, Thu 11/09/2021 11:38:13 PM
Category: Internet, Business | Permalink | Feedback

Along with the Web, videogames are supposed to be the chief media alternative to traditional television, radio and print gazing. So, naturally, advertisers are looking to insinuate themselves into the gameplay landscape — and thus, in front of those young consumer eyeballs.

How’s that effort going? Phoenix Marketing International sought to find out with its inaugural Video GAMERS (Game Advertising & Measurement Evaluation Research Syndication) study, which found that 42 percent of active gamers recalled the product-placement instances they were exposed to.

As for which brands stood out, and where:

So which brands topped the list? In no particular order: Nike, Adidas, Reebok, Coke, Pepsi, Mountain Dew, Gatorade, Ford, BMW, Samsung, McDonald’s, KFC, Burger King, and Axe.

Perhaps not surprisingly, gamers who played sports games and racing games were more likely to remember in-game ads. After all, games in those genres are far more conducive to product placement than other titles. The study found that 54 percent of gamers who played a sports title recalled some form of advertising. In fact, four out of five of the top games for in-game ad recall were sports titles—FIFA World Cup, NHL 2K7, Madden NFL 07, NBA 2K7. The one non-sports title to make the top five was GTA: San Andreas.

The effectiveness of the sports titles as advertising conducers is curious, because it indicates the same dynamic as in television and in-stadium ad placement. Given that sports games are virtual mirrors to their real-life counterparts, including in their camera angles, that means that the engagement of viewers/players with the medium is so strong that marketing messages are more likely to get through.

And that might be the problem, especially given this caveat:

The study examined advertising recall in seventy of the top video games available for current generation systems. However, David Pluchino, senior research manager at Phoenix Marketing International warned that the term “advertising” should be taken loosely, since gamers were not asked about what advertising they saw while playing specific games, but rather if they recalled seeing any real products within the game. If so, they were asked what they remembered seeing.

That sports games, with their rather traditional ad placements, should outdo lifestyle games wherein, for instance, characters routinely sip from Pepsi cans, tells me that videogames don’t work as well as you’d assume for advertising. The idea of inserting recognizable brand-name products into videogame storylines is to forge an indelible link in the mind of the gamer. If that doesn’t work, what’s the point of bidding for integration into the storyline of a multi-player gamescape? If the audience isn’t going to distinguish a specific product from a generic/fictional one, then it’s not worth pursuing.

I’m assuming that non-sports games have bigger and broader audiences than the sports spins. So advertisers might find all those fantasy, action, etc. game genres to be less-than-lucrative territory, while the sports games represent niche opportunities. Going forward, it doesn’t make for a full-fledged alternative to traditional media advertising.

- Costa Tsiokos, Thu 11/09/2021 11:10:42 PM
Category: Advert./Mktg., Videogames | Permalink | Feedback

A snippet of collaborative conversation I had at the office today:

Her: …So we need to position ourselves as the center of the story, not just a silent partner.

Me: That’s just it, we’ve come across as a minor player so much in the past.

Her: And we need to not be anymore. We’ve played that role too many times now.

Me: Yeah — always a bridesmaid, never the bride, right?

Her: Well, we don’t need to be the bride, but we should be the matron of honor.

Me: (mockingly) Hey, hey — you’re getting way too technical for me. I’m not attuned to all this wedding jargon.

Her: Hey! With all the sports metaphors that men use in the office, I think the women should hit back with wedding-speak!

So, if you soon notice an uptick in wedding-planning terms during your conference calls, you’ll know why. It’s a business-speak conspiracy!

- Costa Tsiokos, Thu 11/09/2021 09:38:44 PM
Category: Business, Women, Wordsmithing | Permalink | Feedback