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Interview: Ad-funded games
Michael Chang from Greystripe


Ad-funded mobile game company Greystripe has been in the news recently for growing their distribution partnerships (link) and being a finalist in the “Webby” awards (link). The company has also been the source of some speculation as a potential acquisition target. We spoke recently with Michael Chang, co-founder and CEO of Greystripe about ad-funded gaming, Greystripe, and the mobile advertising industry in general.

Michael, ad-funded gaming seems to be a very hot topic now. What is it about mobile games that makes them such as good match for the “ad-funded” business model?

Games are ideally suited for an ad-supported model because they are able to deliver rich, full screen, interactive ads. These ads are highly prized by advertisers because they can communicate brand impressions unlike text based ads. In turn, game publishers make more money by delivering the full screen ad because of the higher CPMs.

Are there particular game genre or particular user demographic that you have found are the best for ad-funded games? The worst? Any idea why?

greystripe-gamejump.gifIt is a great question and we have begun to give a lot of guidance to our publishers as to what games and genres do better. Games that generate more revenue for the publishers are the addicting ones with intuitive user flow and innovative game play. Every time the user plays a game full-screen ads are viewed and the publisher shares the revenue on the impression. What this means is that it is not the expensive, high production games that necessarily do better, but the ones that are really fun and get people hooked.

Regarding demographics, Greystripe released our current Consumer Insights Report in March and it showed that our users are 70/30 Male/Female and 70% between the ages of 18-34. It shows that we have a young target audience as well as more male than traditional mobile gaming.

What do you personally think has been the most important factor in getting Greystripe up and running successfully? Basically what’s your fundamental point of differentiation?

In the mobile ad space, we have been successful because we are not only ad enabling our publisher’s games and applications, but also distributing the content for them as well. As we know, distribution of new and innovative content is the biggest challenge for publishers these days. Greystripe’s innovation is to use ad monetization to get more mobile content to more users and grow the mobile ecosystem.

There’s been some speculation about a coming consolidation in the mobile game distribution business. Your view? Does it make sense, is it inevitable?

I actually disagree strongly with the view that the mobile games and mobile game distribution industries are consolidating. I believe that there will be an explosion of touch points both online and on-mobile for users to access mobile content. What will drive this is online portals will jump into the mobile distribution game – why not a MySpace Games Mobile?.

A second factor is the growth of direct to consumer distribution. If you think about what Greystripe does for mobile game and application publishers, it is the same thing that Google did for the online bloggers in 2002. It is all about D2C. Google gave a way for publishers of content to “publish” and make money from their content incrementally. Greystripe is providing our AdWRAP system in much the same way.

Last question: in your view, what is the most important thing the mobile operators do in order to accelerate the mobile advertising industry in general?

I believe that all operators need to provide inexpensive all you can eat data plans. This will foster the adoption of new mobile goods and services and in the end benefit the carriers with higher data usage and high value purchases through their deck. At Greystripe, we have seen the adoption of our ad supported games explode in geographies in which there are low data rates.

Thanks Michael, and good luck at the Webby awards!

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