See a sample reprint in PDF format. Order a reprint of this article now

ADVERTISING AUGUST 8, 2010

Dow Jones Reprints: This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients orcustomers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com

Brands Friending Social Gaming Amid New Web CrazeMarketers Follow Growing Number of Computer Users Taking Up Residence on Sites Like 'Car Town' and'Farmville'

By SUZANNE VRANICA

(Please see Corrections & Amplifications below.)

Honda Motors Co. and McDonald's Corp. are making a push into social gaming to promote their brands, asMadison Avenue begins to take notice of the latest Web craze that is drawing growing numbers of people togames on social networks.

Honda is kicking off a campaign Aug. 23 for its new sporty hybrid CR-Z on "Car Town," a recently launchedsocial game on Facebook aimed at car enthusiasts. The game is from Cie Games, a company that is backed inpart by Rick Thompson, the co-founder of Playdom Inc.

McDonald's, meanwhile, has signed an ad deal with "Farmville,"the hit farming game on Facebook from Zynga Game NetworkInc., according to people familiar with the matter. Aspokeswoman for the fast-food company says it is in discussionswith Zynga but declined to provide details.

Marketers are increasingly looking at social gaming as a viablead environment to reach the legions of people spending moretime on social-networking sites. A new report from Nielsen Co.says Americans spend nearly a quarter of the time they are onthe Internet via their computer on social-networking sites andblogs. Moreover, gaming just passed email as the second-mostpopular activity online, behind social networking.

Some marketers and ad executives say games offer a better way to pitch products on social networks rather thanjust have people sign up to be friends with a brand. Gaming allows Honda "to be more commercial than we canbe on Facebook," says Tom Peyton, Honda's brand manager.

As part of its campaign, Honda will have in-game ads on "Car Town," including billboards embedded in thegame that pitch its CR-Z. It will also have a custom Honda showroom in the game, with a screen inside the roomplaying Honda commercials. "Car Town" is based on car collecting, with players using credits to buy virtual carsto customize their own garage.

Mr. Peyton declined to comment on how much the ad push cost. Ad executives say that in-game placements costless than $1 million.

Advertising on social games so far hasn't been a big business. It has taken a back seat as game developers such asZynga have largely generated revenue from selling virtual goods to gamers. The virtual-goods business is expected to generate approximately $920 million in the U.S. in 2010, up from $336 millio n in 2008, according toThinkEquity LLC, a research firm.

Honda

Honda is kicking off a campaign for its new hybridCR-Z on the new social game 'Car Town,' above.

View Full Image

Popular Brands Friend Social Gaming - WSJ.com http://online.wsj.com/article/SB10001424052748704657504...

1 of 2 26/08/2010 3:24 PM

Copyright 2009 Dow Jones & Company, Inc. All Rights ReservedThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by

copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visitwww.djreprints.com

But advertising is beginning to "gain steam," says Debbie Williamson, an analyst with eMarketer Inc., a NewYork research firm. "Advertisers still want to reach big audiences and they are noticing just how many people areplaying these games," adds Ms. Williamson.

In June, "Farmville" had 9.4 million unique visitors in the U.S. who spent an average of 36 minutes on the site,according to Nielsen. "Car Town" says it had 500,000 users in its first week of operations and has over twomillion users since launching the game two weeks ago.

Ad spending on social games and social-media applications is expected to increase 20% this year to $220million, according to eMarketer.

"We have dabbled" in advertising but "now we are starting to see some heat" in that part of the business, saysVish Makhijani, Zynga's senior vice president of business operations.

Analysts and ad executives say advertising is likely to play a bigger role as established media companies such asWalt Disney Co. jump into the space. Last week, Disney said it would buy online social network Playdom, ownerof titles such as Social City and Sorority Life.

Companies such as Microsoft Corp., the Cascadian Farms unit of General Mills Inc. and General Electric Co.'sUniversal Studios Home Entertainment have also been experimenting with advertising on social games.

In March, Microsoft gave away free "Farm Cash" to "Farmville" gamers who became a fan of their search engineBing on Facebook. More than 425,000 new fans joined Bing's Facebook page in one day and 70% of them visitedthe search engine within the next month, Microsoft says.

Some of the early ad plays have come under scrutiny. They include so-called offers marketing, when free virtualgoods are offered to gamers in exchange for accepting certain marketing offers such as signing up for asubscription or filling out a market-research survey.

The practice has been criticized as deceptive advertising because some of the offers appeared to trick consumersinto signing up for subscriptions. A spate of lawsuits followed.

Gaming companies will have to tread lightly to avoid oversaturating games with ads, ad experts warn. In thepast, ads cluttering online games have been met with complaints from gamers. Dustin Johnson, a creative mediaexecutive at Interpublic Group's Mullen says: "Social-media games are a natural phenomena and the moreadvertising, the less likely the games will be successful, so it's a fine line that media companies will have tonavigate."

Corrections and Amplifications

"Car Town," a recently launched social game on Facebook, is owned by Cie Games Inc. A previous version of thiscolumn incorrectly identified the company as Cia Games.

Write to Suzanne Vranica at suzanne.vranica@wsj.com

Popular Brands Friend Social Gaming - WSJ.com http://online.wsj.com/article/SB10001424052748704657504...

2 of 2 26/08/2010 3:24 PM