With spending on mobile advertising expected to increase to $11.4 billion by 2011, NYC-based company, Hovr, has a plan to get in on the action
There is a revolution taking place in the mobile/casual gaming space. It is not a revolution of violence; it's more like natural progress at work. This change, which is gradual yet noticeable, deals with the pricing and the basic economics for both casual and mobile titles from a purchase revenue driven industry to that of an ad revenue driven industry.
The reason this is relevant is that mobile gaming is the number two application in popularity, after SMS, among users ages 13-34, according to M:Metrics. Furthermore, Informa Telecom & Media reports over 210 million mobile subscribers in the U.S. and over 2.1 billion worldwide with spending on mobile advertising expected to increase from $871 million in 2006 to $11.4 billion by 2011. Set to take advantage of all these factors is the brand new Hovr and its various services.
We talked with Vipul Sawhney, Co-founder and CEO of Hovr and discussed the upcoming revolution and Hovr's part in it.
Hovr a few feet in the air
Although the mobile gaming market has huge potential, it's currently not being exploited fully. While roughly one-third of all users are interested in games on their mobile handset, only about 2-3% actually download games, preferring instead to play preloaded or free games. With so many other small expenses associated with having a mobile phone, paying several dollars more for one game that's probably only going to be played in fleeting moments for several minutes doesn't make a lot of sense to many consumers. Hovr's AdLogic Platform deals with this issue quite nicely, giving users access to quality mobile titles and allowing advertisers to reach a vital demographic with ads inserted around the games.
"We wanted to accomplish a way for users to play mobile games without have to spend so much money," explained Sawhney. "This is the way to really increase the reach of mobile games to the masses, because purchases of mobile gaming has plateaued. We believe that mobile gaming can grow as long as we can solve this equation of pricing. I mean, If you look at a lot of entertainment content, such at TV, magazines, a lot of it is ad subsidized and we think it works perfectly for this medium as well."
"What we're offering gives advertisers a greater opportunity to reach out to mobile users," he continued. "Our technology allows the dynamic insertion of ads into mobile games. When you downloaded a game from Hovr or our partners, you see a pre-roll or a post roll advertisement. We also have technology to put ads in the middle of games or between levels."
"Hovr is offering Robotube an innovative new way to make money from our mobile games," agreed Jason Cirillo, Founder of Robotube Games. "Our games can reach a vastly larger audience when they are downloadable for free. Typically game producers are paid per download, but Hovr is paying us based on usage. By earning mobile ad revenue each and every time our games are played, a popular game stands to earn its developer exponentially more money."
Me here at last on the ground, you in mid-air
What Hovr offers that hasn't really been done, however, is the combination of ad supported mobile games with an online social network. Hovr MobileSpace social network gives mobile gamers a chance to connect with other like minded individuals from around the globe – a genius stroke at a time when online communities such as those at MySpace and YouTube are thriving. The profiles established on the network are also a clever way to reach specific users with the AdLogic technology, targeting users with ads more relevant to their tastes.
"The other goal is to provide a social network around mobile games," said Sawhney. "A growing number of games let you register and download your scores. With our network, you have the ability to compete this way with people across the world. You can send messages through your phone or across the website, add friends, do a lot of different things. It will allow you to go much farther than just playing a game alone on your own. Compared to our competitors, we offer a gaming community and it creates a much more rich environment."
"We offer different games to different ad partners," he said, explaining the benefits to advertisers. "We offer ad partners more opportunities, since they can target specific profiles. Via our network we can track how old you are and what handset you have. With this information, we can tell advertisers exactly who sees their ads, like if Budweiser wants to show ads to 21+ year olds. We also offer ads that don't interrupt the game. If gamers have to restart the game when it comes up, they're less likely to click on that ad. They can interact with ads all through our ad browser and continue on the game."
Floating up in space
The future looks bright for the New York-based Hovr, even if things are only just beginning for the mobile company. Establishing yourself in a field looking (and projected) to expand greatly in the future is a smart move, though. Besides, the company name sounds like a Motorola phone (Slvr, Rokr, Krzr) and those are popular, right?
"Ad supported content is absolutely necessary if there is to be mass adoption of mobile phones as a content delivery platform. After years of attempts, interactive advertising finally has a chance to succeed because of companies like Hovr, which is solving two critical problems. They address creating a seamless user experience by eliminating extra steps to download and view content, and they are offering far more precise demographic targeting, making their whole solution attractive to both users and advertisers," commented Christine Arrington Senior Analyst Acacia Research Group. "By 2011 71% of the installed base of handsets will have the capability of media playback. However, only 38% of those handsets will be actively using those media capabilities. Cost is a huge limiting factor. Subsidizing content will be the key to encouraging a larger percentage of media phone owners to actively use the features of their handsets. Tools to help content owners and advertisers defray the cost to consumers are critical in expanding mobile media usage."
"We are live, and are having games downloaded in over 150 countries and we're a social community, not just restricted by carrier or country," added Sawhney.