How many times have you heard the old adage that the internet isn't
about selling, it's about communication and entertainment? If you're
mixing in the right circles, then it should have been about a million
times, yet it seems that in the storm that's battering the online
advertising market, even online gaming isn't sacred or safe.
Gaming has always been lauded as the most sticky content for internet
sites, but the section has seen a series of dotbombs of late. Perhaps
the most prominent was Freeloader, owned by the games development
company Pure Entertainment, which announced that both it and Pure would
be winding down over the next few months.
At the final count, Freeloader had more than 750,000 unique users and in
January it recorded 9.3 million page impressions. The dotcom's business
model, which allowed users to play games online or download them to play
offline, was based entirely on advertising and sponsorship revenue.
Brands could advertise on banners within the games themselves or using
various pop-up online technologies.
Freeloader, like everyone else, suffered a lull in its ad revenue during
January and February but according to a statement, the business was back
in line with profitability by March. It spent a mere pounds 500,000 on
its entire ad campaign and so can't be accused of frittering its funding
away on marketing. Harry Holmwood, the executive deputy chairman of
Freeloader and managing director of its UK office, said that the site
was recording an average click-through rate of 6 per cent on its ads.
And games on the portal were high quality - Pure also developed games
for the PlayStation and Nintendo - so what went wrong?
Holmwood blames the downfall of the site on third-party ad sales
networks rather than the bottom dropping out of the online ad industry.
Unlike Freeloader's UK online ad sales, the US and Europe were handled
'If we'd had the same kind of in-house sales team in just one of the
other countries, such as Germany, that we have here in the UK, then we'd
be profitable now,' Holmwood says. His accusations echo those of many
industry watchers. Last year, Future Publishing, which owns the internet
and games brands PC Format and PC Gamer, took over the online ad sales
for Barrysworld from Real Media to provide the portal with the
specialist sales service which it needed. Not specialist enough, as it
Barrysworld was another dotcom casualty this year, although it was
rescued by Electronics Boutique.
So is it to do with specialisms, or is Holmwood just looking for a
Dominic Mansour, the associate director of Quantum New Media, says:
'While the internet is a specialist area, the traditional rules of
planning and buying apply. The traditional media agencies haven't been
divided up according to different market sectors, so why should the
online agencies be any different?'
This could well be the case, but the online ad network DoubleClick
realigned into industry- focused teams last year, as did Grey
Interactive. Each media owner and online agency has its own philosophy
about the method of implementing digital tasks - does a platform which
has always prided itself on niche marketing and one-to-one capabilities
require niche-focused industry teams in order to sell, plan or buy more
efficiently? After all, digital agencies have to get much more involved
in their clients' businesses than traditional advertisers. Or is
Freeloader's just a plain and simple case of a shrinking market?
Uproar.com is another online gaming website with a similar business
model to Freeloader. It offers in-game ads, banners, pop-ups and
sponsorship opportunities with brands. The company, which has just been
bought by Vivendi, also owns the recently relaunched online gaming
Uproar boasts around 450,000 unique users - substantially less than
Freeloader did when it was in its prime - and yet the managing director,
Alexandra Tickle, is not remotely phased by Freeloader's demise.
'Our games aren't hardcore games,' Tickle says. 'They're dip-in, dip-out
branded games like Catchphrase and Family Fortunes. Our average user
session lasts around 40 minutes. As the popularity of online gaming
comes to fruition, it's one of the best atmospheres for advertisers to
be in because the people are relaxed, chilled out and receptive to