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PGBiz 2010 Report Extract: Will the operator portal model rise again?

Tim Harrison looks at the changing role of the operator in the mobile games marketing mix

PGBiz 2010 Report Extract: Will the operator portal model rise again?
Packed with information and analysis on key trends, games and industry players in the mobile, smartphone and iPhone markets, the PocketGamer.Biz Mobile Games Trend Report 2010 is available to order now.



At the beginning of the Java era, marketing was pleasantly straightforward.

As a publisher, you corralled a few decent games and secured licenses for a few more. Then you took your local friendly operator out for a nice dinner and if you didn't bore (or scare) them to death, somewhere between the starter and petit fours you would agree a distribution deal.

If the wine was particularly fine, or the after-dinner entertainment particularly fun, you'd often snag yourself some marketing support to boot.

It wasn't quite like that - the reality was invariably more prosaic. Contracts were agreed and business conducted upon conventional lines, but it was a young, informal industry which went bigger on relationships than complex commercial concerns.

Marketing was just a part of the overall loose mix that was the mobile games industry in the early noughties.

Marketing gets mixed in

With an initial focus on driving uptake and awareness of this new consumer service, there was little room for subtlety or nuance. Publishers provided the brands, while operators paid David Beckham the bucks to pretend to play Pac-Man at the supermarket checkout.

Longer-term, a more ambient approach was required and the focus shifted to co-marketing. Titles would be given top visibility on the WAP portal in return for reciprocal logo-waving, or some form of exclusivity to appease operator brand teams.

Real publisher spend, however, was limited.

If there was any spare cash after development and porting to a rapidly fragmented handset base, most publishers would divert it into their licencing budget. At least that might help ensure some level of placement on the crucial upper reaches of the WAP deck. In too many cases, brand became an apologist for quality.

From Ibiza to commercial reality

Initially, the biggest barrier to the widespread marketing of mobile games was the lack of affordable inventory. Above-the-line was uneconomic, and WAP decks were yet to offer banner advertising. Meanwhile, category managers were reluctant to overtly commercialise content placement for fear of whoring out the customer offering.

This was perhaps a little ironic. Before CPMs (cost per thousand impressions) or CPCs (cost per click) became common currency, most publishers planned in what you might call CPJs - Cost Per Jolly.

Yes, there was plenty of marketing activity from publishers and operators alike, driven by a sincere desire to move the consumer needle. But deck placement or an embedded demo remained the only guaranteed route to revenues, and the most effective marketing spend a publisher could make was channelled into Balearic bar tabs or 'strategy summits' on the putting greens of England.

A key operator job requirement became the ability to navigate the fairway between commercial integrity and undue influence.

As competition increased, and revenues flatlined, the voiced antipathy toward 'paying for placement' softened. Operators began to hire dedicated advertising teams to build capability and sell inventory and games decks began to operate on broadly conventional retail terms.

At first there was conflict between the 'editorial' judgment of games managers, and the target-focused ad teams. The big spenders sped ahead, while more creative but less commercially successful publishers were cut more slack than many in between liked to see.

The Darwinian emphasis on investing cash for placement forced further consolidation. Inevitably, real money marketing had become the deciding factor in the battle for deck and download share.

Where next for the operator portal?

Consolidation has driven Java game quality higher and left only the most committed publishers standing - the big guys continue to generate respectable revenues. But the costs and challenges of serving such a fragmented device and distribution base present an impossibly daunting barrier for new entrants. Given the growing smartphone opportunity, it's one that few will bother to surmount.

So does this all mean the end of the operator games portal?

In fact, possibly not - Android apps may yet take Java's place. It is early days, but a good number of operators are offering differentiated stores and services for their Android devices.

Despite the many changes the app store era has brought, we may yet see a return to a more operator-driven mobile games industry. Many will see it as a return to the bad old days of closed shops, consumer disrespect and commercial opacity. Others will relish an environment which while less 'meritocratic' may make it easier for a properly profitable industry to function.

For now things are likely to stumble along as they do today. On the application store front, the customer will remain king - an honest but fickle and often harsh arbiter of fortunes. Meanwhile, over at the operator shops, the editorial slots will be filled on merit, paid space sold to the highest bidder, while everything in between will continue to swing on the familiar old fulcrum of politics, ego... and the occasional strategy showcase in Ibiza.



Tim Harrison is founder of The Mobile Consultancy and has contributed a section on marketing to the PocketGamer.Biz Mobile Games Trend Report 2010.

You can follow Tim on Twitter or contact him directly at tim [dot] harrison [at] themobileconsultancy [dot] com.


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