Alfy: Using Video To Monetize Your Games

Chris, CEO of Alfy, talks about the benefits of using video to monetize your flash, social, and online games

You can download the podcast here…
http://www.indiegamepod.com/podcasts/cc-alfy.mp3

Or listen to it here…

Show Notes:
Interviewer: I’m here at Casual Connect in Seattle, and with me today is a special guest. How about you introduce yourself?

Chris: It’s Chris Pfluger. I’m CEO of Alfy Inc.

Interviewer: And what’s that about?

Chris: Alfy Inc. we are a video advertising optimization service. So, what we do is we provide video ad solution to publishers and developers.

Interviewer: And so, how would that help smaller game developers who have their own flash game or their own online social game or something else like that out?

Chris: Great question. So, normally what we do is we work with large publishers that have flash-based games, and we provide video ads for those games. For smaller developers, we’re actually building a solution that’s an API solution. And you can implement our code before your game which will allow you to distribute that and make money off of other – when you distribute your game through other people’s websites.

And what it does is the API at the end will either call a function that says either, one, after the ad go directly to the game, or, two, if we’re not delivering an ad, depending on the situation, you could start with default ads. So, you’re always making money through the service. Right now, we’re seeing CPMs in the $5 to $8 range which is pretty good.

Interviewer: And so, this would be perfect for flash developers who always get their game borrowed by other people.

Chris: That’s exactly right. I’ve actually been speaking to people today about that, and apparently borrowing, I’m learning, happens a lot in the industry. So, if they are doing this and they actually put it into their flash code, then the ad’s going to show up there, and you get paid for all those things.

Interviewer: Now, how would that be more beneficial than, say, putting in a banner ad before? Because I know that there are other services now that allow you to put like a little banner ad in your flash game so that even if other people borrow it, you’re getting paid for the banner ad, the CPMs.

Chris: Oh, the CPMs, it’s exactly right. From what we know, we do a lot of banner ads and we do a lot of other online advertising as well. Right now, video pre-rolls is the number one way and the highest CPM that’s out there.

Interviewer: Aside from the API and just being able to invent in flash, is there anything else that you guys offer?

Chris: Yeah. So, essentially what we do is, instead of signing up for, let’s say, one video ad network who might not be able to serve that many ads or might have times when there are no ads available, we use about 10 different networks and we deliver the best CPM across all those networks. So, the developer always knows they’re getting the best CPM in the marketplace.

Also, too, it allows us to make sure that we’re filling the most that we can. Usually, we have about 95 percent fill rates where other networks that are single have in the10s and 20 percent fill rates.

Interviewer: Can you talk specifically about what that fill rate means? Does that just mean that they don’t have anything to show then you’re not getting paid for that play?

Chris: That’s exactly right. So, what happens with video advertising, a lot of people quote very high CPMs and they’ll say, “We’ve got a $10 CPM on video.” Well, that may be true, but that only may be on five percent of the ads that they show. The other 95 percent of the ads either, one, aren’t being served anything or, two, are being served the very lowest CPM.

So, what we try to do is we try to get the highest paying CPM across 100 percent of the video plays. So, what happens is that, let’s say, you have a $10 CPM on 25 percent of your plays, your effective is only $2.50. So, we try to deliver that $10 CPM or, let’s say, an $8 CPM across 100 percent. So, that would be, obviously, an $8 CPM. It’s already that much more or triple the money.

Interviewer: Aside from flash games, what about in MMOs or some of these text-based PHP games? Is this even an appropriate solution for them?

Chris: It could be. You know, we’re mainly focused on flash games right now. We have some people that we met here at Casual Connect where we’re going to start doing downloadable, we believe. And we are pretty close to going live on some Facebook apps as well. So, those are really the three areas we’re looking for. On the other ones, I think it’s possible. It depends on their technology and what they want to do because we can give them the code, if they can implement it. It’s a possibility.

Interviewer: Since you’re more cognizant of the video advertising space, where do you see it going in the future? I mean, we’re seeing even on YouTube there’s a lot more of a push by Google to actually have video advertising. Is that going to cannibalize the opportunities for game developers? Is it going to expand the market? What do you feel?

Chris: I think it’s the hottest growth area there is in advertising online. Right now, it’s growing, I think, 20 percent a year for the last two years in a down market for advertising. It’s just in one area of growth, if we can take just small percentage points away from traditional TV advertising.

Remember that a lot of people among the advertisers I’ve been doing now is they’re taking their normal TV commercials and just repurposing for the web. So, there’s no real double cost of producing these things. So, they’re getting essentially the ads for free. They’re putting them on there. They’re taking small percentage points away from television advertising. This is going to grow significantly over the next couple years.

Interviewer: Is there a service for other advertisers out there, can they just go to your site and actually put out the ads? So, for example, let’s say other game developers want to promote their game as pre-roll ads through your service. Is that even a possibility at this point?

Chris: Generally speaking…

Interviewer: You’re pretty much an aggregator.

Chris: Yeah, no, we’re pretty much an aggregator. So, yeah, we’re just working on that. So, there’s really no direct buying right now. In fact, we don’t want to confuse everybody for the buys. We’re just really worried about optimizing.

Interviewer: And where can developers get started then? What do they need to do to get started implementing your service?

Chris: It’s pretty easy. You just send us an email. So, you can either send the email to Chris, C-H-R-I-S at Alfy.com.

Interviewer: A-L-F-Y.com.

Chris: A-L-F-Y.com. That’s correct, or bizdev, B-I-Z-D-E-V at Alfy.com.

Interviewer: Thank you very much.