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Is online social gaming a viable CPG marketing opportunity?

Online social gaming has been one of the key growth stories of 2010, with millions of people worldwide driving multimillion dollar valuations for games such as Farmville and Angry Birds. Consumer packaged goods (CPG) companies are becoming increasingly skilled at using online social media to promote their products, but most have not yet fully exploited the potential in online social gaming. There are opportunities both in sponsorship of existing mass-market social games, and in creating brand-focused games to develop social media strategies and drive consumer engagement.

CPG companies have so far lagged behind other industries in engaging with digital media, with only 2% of advertising budgets spent online according to CapGemini. However, the industry’s biggest players have resolved to increase their digital spend substantially over the coming years.

Social networking is projected to grow to even higher penetration rates than it currently achieves, with high single-digit or double-digit annual growth expected in all major markets.

With the ubiquity of social networking and the fragmentation of the web, having a digital media strategy means having a social media strategy, particularly for CPG companies looking to promote a brand experience rather than just sell goods online.

Social games are an important driver of social media usage, both in terms of initial sign-up and time spent using social media. Unlike traditional computer games, they attract audiences of both genders and all ages. As the number of different game types in widespread play increases, the scope to target specific audiences is increasing. This makes them an important potential target for advertising, sponsorship, and joint ventures.

Recent examples of sponsorship in social media include Cascadian Farm’s and McDonald’s promotions on Farmville. While they lie outside the CPG area, Volvo’s and H&M’s respective campaigns on MyTown are good examples of direct product promotion, while KLM’s Surprise campaign on Foursquare is an innovative way of promoting the airline’s wider image as a quirky but caring brand.

Companies can also create their own social games to promote their brand. However, this runs the risk of creating a half-hearted effort like Southern Comfort’s Beat The Bartender, which is neither engaging nor particularly social. Consumer goods companies have yet to find success in creating social games associated with their brands. One exception, however, is Reckitt Benckiser’s Powerbrands game, which was highly effective in elevating Reckitt’s corporate image among potential graduate employees.

Find this interesting. For more, please read our case study Online Social Gaming Case Study: A Viable CPG Marketing Opportunity? or check out our Buy Reports section for thousands of company, industry & country analysis reports.

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