Tuesday
Video Gaming Companies IGN, GameSpy to Merge
Two of the Internet's leading video game companies, IGN Entertainment and GameSpy Industries, on Thursday said they will merge to create a company offering gaming news, information, downloads, data services and community features.
San Francisco-based IGN and Irvine, California-based GameSpy, both of which are privately held, said the deal is expected to close in the first half of 2004. IGN Chief Executive Mark Jung will be CEO of the combined company, and GameSpy Chairman Mark Surfas will be chief strategy officer.
IGN was publicly traded until August, when it went private in a buyout lead by Great Hill Partners and the IGN management team. It is best known for both free and subscription content on games and gaming hardware.
GameSpy provides both gaming content and also gaming technology, allowing publishers to put their games online and manage communities of players.
The combined company will have 194,000 paying subscribers to content and technology services, with more than 26 million registered users.
Both the IGN.com and GameSpy.com brands are expected to be retained after the deal closes, the two sides said in a statement.
San Francisco-based IGN and Irvine, California-based GameSpy, both of which are privately held, said the deal is expected to close in the first half of 2004. IGN Chief Executive Mark Jung will be CEO of the combined company, and GameSpy Chairman Mark Surfas will be chief strategy officer.
IGN was publicly traded until August, when it went private in a buyout lead by Great Hill Partners and the IGN management team. It is best known for both free and subscription content on games and gaming hardware.
GameSpy provides both gaming content and also gaming technology, allowing publishers to put their games online and manage communities of players.
The combined company will have 194,000 paying subscribers to content and technology services, with more than 26 million registered users.
Both the IGN.com and GameSpy.com brands are expected to be retained after the deal closes, the two sides said in a statement.
Make Room for Portals
On November 14, among the editorial offerings MSN visitors was "Start: Technology That Works for You." Created by the Microsoft (Quote, Chart) portal's writers and editors, the special section reviewed personal technology in five categories, Playing, Connecting, Saving, Seeing and Driving. The latter category featured the Toyota Prius, the gas/electric hybrid car with high-tech features including an information display console and Bluetooth cell phone connectivity.
The editorial package itself was a hybrid of content and advertisement: a sophisticated multi-media advertorial created by MSN for Toyota. The target audience was tech enthusiasts, especially men, between 25 and 40. The Prius campaign is one example of the lengths portals are going to in their efforts to meet the needs of their biggest clients. They're combining their own editorial strengths with the marketing strategy services usually employed by agencies.
At MSN, such duties are handled by the custom solutions group, a division that looks and acts a lot like an internal interactive agency, with its own crew of strategists, developers and designers.
It's a lot like custom publishing, says Gayle Troberman, director of custom solutions for MSN and a former agency-side exec. "We're seeing advertisers come to publishers and say, 'Help us create a brand experience.' We built the experience, they built the advertising."
MSN's custom solutions group creates marketing packages for the mega-advertisers like Dell, Honda and Toyota. While these advertisers may have done a fair amount of online advertising before, these complex campaigns focus not on lead generation but on building interest and preference, the realm of brand advertising. Troberman's sales pitch to them is, "We'll experiment and innovate together to figure out a new approach to branding online."
Even eBay is getting into the act, creating branded showrooms for companies like BMW, devising auction promotions for Dr Pepper/7Up and consulting with advertisers on creative and media.
It's not a new pitch. Yahoo! , AOL and MSN have been trying to dig their hands into the deep pockets of brand advertisers since online advertising was invented. Now, the advertisers are willing and eager to take a shot. Broadband adoption is finally reaching critical mass, and the Interactive Advertising Bureau (IAB) and others have built up a body of research showing that online branding can work, Troberman says.
Prius' agency, Saatchi & Saatchi, is having it both ways, experimenting alongside MSN without undue risk to its budget. Priya Verma, Saatchi's interactive media director, is thrilled with the creative and editorial ideas from MSN, and, she says, "We know it's going to be a winner because the way it's been negotiated is based on cost per traffic." She says MSN is guaranteeing "huge" traffic on the advertorial piece.
Saatchi also has worked with Yahoo! and AOL. In the case of Toyota Forerunner's sponsorship of the extreme racing challenge cable TV show "Race to the Top," Saatchi put out a "pre-RFP," inviting portals to take the agency's initial ideas and "bring it alive for their audience." Yahoo! created special content on its site to become the online hub for fans of the show.
"Those flagship brands of the world are always looking for new insightful creative approaches to inspire consumers and customers to try their products and brands," says Eliot Phillips, a partner and managing director of the Interactive Communications Practice of Lippincott Mercer, a design and brand strategy consultancy. "If it's perceived that portals have the technical expertise or a unique insight around customer knowledge, then why not see what the portal can come up with creatively?" He says the advertiser has nothing to lose. "They don't have to run the campaign if they don't like it."
Portals do pitch clients directly, and agencies, while they don't like it, have learned to take it. But they maintain that such a relationship may not be in their clients' best interests. "Any kind of direct relationship that a publisher or portal has with a client is never an ideal situation," says Stacey Flynn, media director for interactive agency Zentropy Partners. "There can be a lot of marketing information that gets left out, either because the client may not know it, or because the portal won't take the bigger picture into consideration because it doesn't serve its best interests."
For example, while agencies know what the going rates for advertising are, the client might not, according to David Burk, CEO of interactive shop Clear Ink: "Clients are a less-informed market. Not every client has someone who knows media really well." Such direct relationships between advertisers and portals often get the blame for the mega-bucks long-term portal deals that everyone was doing during the dot-com boom -- to their later regret.
Cutting out the agency also lets portals push rich-media, flashy agendas, says Clear Ink executive vice president Steve Nelson. "Agencies, through experience, see that interruptive multi-media presentations don't work," he said. "The portals see that agencies know better, so they'll go directly to the clients who may not have had the experience."
"This is the era of disintermediation," Burk says, "but a lot of times there are a lot of people who fight back pretty hard. So sometimes facilitating intermediaries is a better idea." That seems to be the trend.
Yahoo! has been holding "creative summits" around the country, invitation-only events where advertisers and traditional and interactive agency types mingle and ponder topics like "The New Creative Revolution." And AOL is going out of its way to woo agencies.
Zentropy's Flynn says that her agency is happy to consult with the client when it is working directly with a portal, and, "We've been fortunate to always be informed at some level when that's happening."
Agencies also are ready to admit that the portals bring some unique value. "They have unique transactional knowledge of user behavior patterns," says Phillips of Lippincott Mercer. "AOL knows how many 10- to 16-year-olds are in its channel and they can measure fairly accurately."
"We bring knowledge of our users, what they do, where they are, how to capture their attention on MSN," says Troberman. MSN typically partners with traditional and interactive agencies rather than approaching the clients alone. The MSN team will sit down with client and agency and discuss the nuances of the brand, then come back with a range of concepts. These are later refined in a process similar to what agencies and clients do in the traditional world.
"We have great partnerships with [MSN and Yahoo!]," says Saatchi's Verma, and the agency is beginning to regain trust in AOL. "They sometimes do go to the client directly, but they always give us a heads-up," she says.
One odd thing about these portal-driven campaigns is that, unlike typical ad campaigns both online and off, they are media-specific. That's why Saatchi uses the "pre-RFP" approach, picking one portal partner that comes up with the best idea. "It's definitely a limitation that the campaign can run on only one portal," Flynn says. But she's heard on the street that, as portals bulk up their in-house creative teams, they might offer their creative to other media outlets as a new source of revenue.
After the drama and destruction of the last few years, agencies are taking a live-and-let-live attitude. "It's the online space just trying to figure out what works best," says Flynn. And, just as agencies are willing to make room for the portals, she says, "The portals won't do anything to really anger the agencies. Getting along goes both ways."
The editorial package itself was a hybrid of content and advertisement: a sophisticated multi-media advertorial created by MSN for Toyota. The target audience was tech enthusiasts, especially men, between 25 and 40. The Prius campaign is one example of the lengths portals are going to in their efforts to meet the needs of their biggest clients. They're combining their own editorial strengths with the marketing strategy services usually employed by agencies.
At MSN, such duties are handled by the custom solutions group, a division that looks and acts a lot like an internal interactive agency, with its own crew of strategists, developers and designers.
It's a lot like custom publishing, says Gayle Troberman, director of custom solutions for MSN and a former agency-side exec. "We're seeing advertisers come to publishers and say, 'Help us create a brand experience.' We built the experience, they built the advertising."
MSN's custom solutions group creates marketing packages for the mega-advertisers like Dell, Honda and Toyota. While these advertisers may have done a fair amount of online advertising before, these complex campaigns focus not on lead generation but on building interest and preference, the realm of brand advertising. Troberman's sales pitch to them is, "We'll experiment and innovate together to figure out a new approach to branding online."
Even eBay is getting into the act, creating branded showrooms for companies like BMW, devising auction promotions for Dr Pepper/7Up and consulting with advertisers on creative and media.
It's not a new pitch. Yahoo! , AOL and MSN have been trying to dig their hands into the deep pockets of brand advertisers since online advertising was invented. Now, the advertisers are willing and eager to take a shot. Broadband adoption is finally reaching critical mass, and the Interactive Advertising Bureau (IAB) and others have built up a body of research showing that online branding can work, Troberman says.
Prius' agency, Saatchi & Saatchi, is having it both ways, experimenting alongside MSN without undue risk to its budget. Priya Verma, Saatchi's interactive media director, is thrilled with the creative and editorial ideas from MSN, and, she says, "We know it's going to be a winner because the way it's been negotiated is based on cost per traffic." She says MSN is guaranteeing "huge" traffic on the advertorial piece.
Saatchi also has worked with Yahoo! and AOL. In the case of Toyota Forerunner's sponsorship of the extreme racing challenge cable TV show "Race to the Top," Saatchi put out a "pre-RFP," inviting portals to take the agency's initial ideas and "bring it alive for their audience." Yahoo! created special content on its site to become the online hub for fans of the show.
"Those flagship brands of the world are always looking for new insightful creative approaches to inspire consumers and customers to try their products and brands," says Eliot Phillips, a partner and managing director of the Interactive Communications Practice of Lippincott Mercer, a design and brand strategy consultancy. "If it's perceived that portals have the technical expertise or a unique insight around customer knowledge, then why not see what the portal can come up with creatively?" He says the advertiser has nothing to lose. "They don't have to run the campaign if they don't like it."
Portals do pitch clients directly, and agencies, while they don't like it, have learned to take it. But they maintain that such a relationship may not be in their clients' best interests. "Any kind of direct relationship that a publisher or portal has with a client is never an ideal situation," says Stacey Flynn, media director for interactive agency Zentropy Partners. "There can be a lot of marketing information that gets left out, either because the client may not know it, or because the portal won't take the bigger picture into consideration because it doesn't serve its best interests."
For example, while agencies know what the going rates for advertising are, the client might not, according to David Burk, CEO of interactive shop Clear Ink: "Clients are a less-informed market. Not every client has someone who knows media really well." Such direct relationships between advertisers and portals often get the blame for the mega-bucks long-term portal deals that everyone was doing during the dot-com boom -- to their later regret.
Cutting out the agency also lets portals push rich-media, flashy agendas, says Clear Ink executive vice president Steve Nelson. "Agencies, through experience, see that interruptive multi-media presentations don't work," he said. "The portals see that agencies know better, so they'll go directly to the clients who may not have had the experience."
"This is the era of disintermediation," Burk says, "but a lot of times there are a lot of people who fight back pretty hard. So sometimes facilitating intermediaries is a better idea." That seems to be the trend.
Yahoo! has been holding "creative summits" around the country, invitation-only events where advertisers and traditional and interactive agency types mingle and ponder topics like "The New Creative Revolution." And AOL is going out of its way to woo agencies.
Zentropy's Flynn says that her agency is happy to consult with the client when it is working directly with a portal, and, "We've been fortunate to always be informed at some level when that's happening."
Agencies also are ready to admit that the portals bring some unique value. "They have unique transactional knowledge of user behavior patterns," says Phillips of Lippincott Mercer. "AOL knows how many 10- to 16-year-olds are in its channel and they can measure fairly accurately."
"We bring knowledge of our users, what they do, where they are, how to capture their attention on MSN," says Troberman. MSN typically partners with traditional and interactive agencies rather than approaching the clients alone. The MSN team will sit down with client and agency and discuss the nuances of the brand, then come back with a range of concepts. These are later refined in a process similar to what agencies and clients do in the traditional world.
"We have great partnerships with [MSN and Yahoo!]," says Saatchi's Verma, and the agency is beginning to regain trust in AOL. "They sometimes do go to the client directly, but they always give us a heads-up," she says.
One odd thing about these portal-driven campaigns is that, unlike typical ad campaigns both online and off, they are media-specific. That's why Saatchi uses the "pre-RFP" approach, picking one portal partner that comes up with the best idea. "It's definitely a limitation that the campaign can run on only one portal," Flynn says. But she's heard on the street that, as portals bulk up their in-house creative teams, they might offer their creative to other media outlets as a new source of revenue.
After the drama and destruction of the last few years, agencies are taking a live-and-let-live attitude. "It's the online space just trying to figure out what works best," says Flynn. And, just as agencies are willing to make room for the portals, she says, "The portals won't do anything to really anger the agencies. Getting along goes both ways."
Tech Firms Plan More Online Marketing
Spending next year for online lead generation will grow to nearly 45 percent of the total IT marketing budget, up from 40 percent in 2003, according to a trends study measuring the plans of 350 technology advertisers.
Online advertising's share of the budget will increase from 14 percent to 16 percent. Similarly, online lead generation will expand its share of spending to 28 percent next year from 26 percent in 2003.
The findings were part of the 2004 IT Marketing Trends Study released Friday by Boston-based IT content provider Bitpipe Inc. and Sam Whitmore's Media Survey. InsightExpress conducted the survey.
Seventy-three percent of respondents intend to use Webcasts in 2004, up from 55 percent this year. Sixty percent plan to use e-mail promotions, up from 44 percent this year who advertised in online newsletters.
The survey found e-mail promotion ranked as the best lead generation tool. It is expected to grow in use from 83 percent this year to 85 percent in 2004. Also, 82 percent will rely on white papers next year, up from 75 percent in 2003.
"IT buyers increasingly turn to white papers, especially in the early stages of the purchasing process," Sam Whitmore, editor of his self-named survey from Beverly, MA, said in a statement.
Confidence with the medium is encouraging marketers to allocate more money to online marketing. Technology advertisers earmarked 43 percent to direct mail or telemarketing and 16 percent to print advertising, a total of 59 percent. Offline marketing's share is now expected to shrink to 56 percent, the survey said.
Online advertising's share of the budget will increase from 14 percent to 16 percent. Similarly, online lead generation will expand its share of spending to 28 percent next year from 26 percent in 2003.
The findings were part of the 2004 IT Marketing Trends Study released Friday by Boston-based IT content provider Bitpipe Inc. and Sam Whitmore's Media Survey. InsightExpress conducted the survey.
Seventy-three percent of respondents intend to use Webcasts in 2004, up from 55 percent this year. Sixty percent plan to use e-mail promotions, up from 44 percent this year who advertised in online newsletters.
The survey found e-mail promotion ranked as the best lead generation tool. It is expected to grow in use from 83 percent this year to 85 percent in 2004. Also, 82 percent will rely on white papers next year, up from 75 percent in 2003.
"IT buyers increasingly turn to white papers, especially in the early stages of the purchasing process," Sam Whitmore, editor of his self-named survey from Beverly, MA, said in a statement.
Confidence with the medium is encouraging marketers to allocate more money to online marketing. Technology advertisers earmarked 43 percent to direct mail or telemarketing and 16 percent to print advertising, a total of 59 percent. Offline marketing's share is now expected to shrink to 56 percent, the survey said.
