Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
Return on Investment
Published on May 24, 2006 By Draginol In GalCiv Journals

Ever wonder how effective advertising is? I remember when I was a kid hearing how much was spent on TV ads and thinking "What a waste of money" for most of those ads. I think ads about "Branding" or on immediate needs (like food or toiletries) can be effective. But many other ads, I dunno.

Magazine ads are something I don't know about either.  And yet here we are, spending hundreds of thousands of dollars per quarter. How effective are they?  Does that $20,000 two-page spread in a game magazine generate 2X in sales of the game?  At least with web ads, you know how many impressions and click-thrus you get.  But on magazine ads, who knows. Is anyone seeing them? Might make for an interesting poll question.

And then there's the "well if they see them..." did it make them more inclined to buy the game? 

I admit to having a bit of a personal reason for wanting to advertise so heavily in the magazines and on certain webzines.  I don't believe in "karma" but I felt that for years, our company was too poor to support the magazines that had been kind and fair to use over the years.  Computer Gaming World, for instance, covered The Political Machine with a Tom vs. Bruce article.  CGW knew there would be no ads. They covered it because they thought it was of interest to their readers. People have to respect that kind of integrity.  So as our company grew, I wanted to support those who had supported us.  But that is a seperate issue from the straight mechanics of how effective are advertisements in generating sales.

What do you think?


Comments (Page 2)
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on May 24, 2006
As for the Karma thing, well, i'm gonna say what every romantic story in history has said: Follow what your heart is telling you. If it works for sales then great, if it doesn't, at least you're doing the right thing. Its a win win situation far as I can tell.

Cybermage - what you been takin man? I'm with quixecoyote on this one, he's definitely got the right idea.
on May 24, 2006
Does advertising work? Maybe yes to an extent for the younger players, like age 12-20. The problem with advertising is that it is there to sell something (just the good info). I beleive consumers want to know the good and bad info before they buy.

My opinion is in 2 parts:

1) The Present - Now, I am too skeptical about advertising to take any ad for face value. No magazine ad will ever make me by a game because I think there are politics involved with who gets good ratings and so on. How did I find GC2? I was in the mood to play a good space sim and did an online search, I ran across many games, GC2 was one of them. Each time I did further searches about a certain game review, looking for "non-official" opinions of the game. I liked what I saw. Then I bought it.

2) The Past - Gone are the times when I can pick up a box from the shelf and read it to know if I'll like it. To me, there have been waves of crap games in the past 10 years or so. Meaning what is on the box may be what the game is about and some of the content, but I have been burned too many times, paying $50.00 for a game that has a bunch of stuff but isnt playable because of bugs, poor design, hardware conflicts, etc... Of course the internet now has much more information than it did a decade ago and I think it is or will become an important part of cutting through advertisement BS.

on May 24, 2006
small ads work.. ads that make a person visit a website to get more info....

large 1 page ads don't wok for me.. I just ignore them
on May 24, 2006
An ad needs only to be big enough to be noticable. A well done stand out 1 page could work as well as a two page, especially on subsequent insertions.

Your latest two page ad in CGW did get the point across, and I thought they were well done.

Ads will tell new potential users that the game exists and allows for easier sales of the product from people that are predisposed to buy your product ( ie for Galciv2, SF strategy gamers, MOO2 lovers etc,) that your game even exists.

Without advertising, for exaample in CGW, some of their subscription and magaazine buyers are strategy gamers according to their surveys. Without at least one ad, some of those easy sales would not know you exist.

Advertising acts as a bought channel. It counteracts your lack of distribution channel strength by pushing demand from theh consumer up and gets those interested consumers to search you out in retail stores or on your web site.

And advertising acts as a proxy for word of mouth and leverages your positive reviews to more people.

Advertising basically gets you in the decision set for some buyers that otherwise wouldn't consider your product.

How much is enough? Who knows but if increasing advertisng increases sales, probably a agood idea to spend more, If deceasing advertising corresponds to decreasing sales, then it might be worth a try to increase it again to see if it increases again. But there is a risk that after a decline you are throwing good money after bad.

General princple is that if things are going well, don't decrease advertising, considering increasing it. Don't mess with success, wait until sales cool to consider cutting back.

Old advertising adage even to successful companies is that ‘50% of my advertising is wasted, the trouble is I don’t know which half’. That may be changing eventually, but the moral is if your sales are working, some of your advertisng is probably working also.

on May 24, 2006
I have not played a turn based game since I played my first FPS game (Wolfenstien 3D - shows how long I've been PC gaming).

Now anyone who play and competes in FPS games knows there has been a rather disappointing trend by major game makers to design/market games to consoles over PC and basically dumb down the game for the console good example of this is Call of Duty 2 and Rainbow 6 - 4.

So I'm going through the gamespot site looking (and getting somewhat desperate for something new to play) when I come across their section on GC2. After going though that I following the link to the site check the forums and what do I find the people who actually make the game not only post on a regular basis they will respond to Joe nobody post on a regular basis. I also enjoyed reader Frogboys journals and the others two.

After dealing with EA, Activision, UBI etc. this was quite shocking to me and what convinced me to buy the game and after playing it convincing 3 other hardcore FPS guys from my clan to buy it to.

on May 24, 2006
Also, a self selection bias will appear on this forum for internet savvy heavy users. A lot of you store sales may not be forum posters and the posters here may not be a representative sample of those people that responded to your advertising.

Human nature tends to have people not want to admit they responded to an ad, because they don’t want to admit they were manipulated. In research studies word of mouth is overstated and recall due to advertising is almost always understated.

on May 24, 2006
I receive Computer Gaming World and PC Gamer and I do look at all the add in them, If I find a game that looks interesting I will look online to find out more information on it. So I would say they do work, But I didn't hear about GC2 in them I heard about it at Civfanatics Civ4 Forum before you ran the adds in the magazines.

I usually won't buy a game until I read most of the reviews on it from the major online outlets such as Gamespot and IGN then compare them with the CGW and PC Gamer to get a conscious. I also follow a couple of reviewers very closely and they are of course Tom and Bruce, if they give a game a good review then I have will have no reservations in buying it!
on May 24, 2006
Advertising also may get people interested in the game where they will check out the reviews, search the web, ask friends etc. With the advertising spark they may never had heard of you or considered your product purchase. If you ask some of those people why they point or how they heard of you, some if not most may site the review as the reason, even though they may not have read the review without the ad.

The real advertising question is not whether advertsing works but what advertising works better than others and is cost effective in increasing or sustaing sales.

IMHO
on May 24, 2006
Also the payback from an ad is the real decison point. How much additional profit you get from an ad can sometime be measured.

For software, an incremental sale can be almost 95-100% profit, as the physical distribution an manufacturing costs of an additional copy is very small compared to the developmental costs. So for example, you may sell a game for $40, average profit may be $ 5, but your contribtion margin, or extra profit for the last unit sold may be huge, like $35 in extra revenue.

So if you are selling on average 1000 units a week, week after week, with a fairly consistent trend, and the only thing that changes the next week is that you just bought a magazine ad for $10,000. If your sales spike upward to 3000 units the week right after that magazine hits the street and then tapers off daily back to your norm of 1000 per week. If nothing else has changed (and of course that is never the real case) then you can attribute 3000 or more extra sales to the ad or other event. In that case, even though you only sold 2000 extra units the ad generated 2000 x 40 = 80,000 in sales or 70,000 in extra profit.

Not bad, in that case for the 10,000 risk. In that case, 7 ads can completely fail and you can still make money. Of course, things are never that simple in real life.

If an ad works, the profit payoff can be huge, because the profit per increased unit sold is large.

Software is a market where they can be a high payoff for the risk.

And advertising always works better with a good product, and you certainly have a good product.

Good luck on your advertising choices.
on May 24, 2006
The update fee idea really goes against the spirt of what they're trying to sell with this game. I'd never buy another Stardock game if they implemented a 'pay for patch' system. [...]

Pay for patch? No one else in the industry does that.


Perhaps I was not clear and specific enough in my previous post. I totally agree with both of you that "patches" to fix bugs and technical problems should remain free : of course!

I was refering rather to "upgrades", such as pertaining to enhanced features.

If you have read all of Brad Wardell's recent posts, you must realize that he and some members of his GC2 team have been working for free "beyond the call of duty". For example, just taking the time to regularly read the forum posts and taking the trouble to reply are time-consuming, and Mr Wardell has stated that he was tinkering with the A.I. code during the weekend!

That's all very nice, but there is a point where grateful gamers should step up and shoulder part of the burden.

Summer is coming : do we expect that Brad Wardell and his team will continue to use up their leisure time to produce updates 1.3, 1.4, 1.5?

My suggestion is NOT that consumers should pay for technical "patches", of course, but rather, that very hungry (and very grateful) gamers should finance feature "upgrades" which go "beyond the call of duty" for the Stardock b-u-s-i-n-e-s-s. I hear some guys holler that they want a more competitive A.I. on the higher levels of difficulty : fine --- why not finance it?

For example. What is $4.95 worth today? Let's suppose that an OPTIONAL "1.33" upgrade would cost 5 bucks : what would be the big drama with that? A single evening at the movies, with popcorn and cola, costs even more!

I say : a $5 upgrade, not a "patch" -- which, of course, should remain free.

I am just trying to float a speculative balloon. I believe that those of us who have purchased GC2 and have updated it to 1.11 have already been blessed with a great deal. Why not, then, support the leading members of the GC2 team instead of exxxpecting that they should continue to work for free during the summer, just for the sake of "passion"?

I am new to this forum. I have no connection whatsoever with Stardock. (To the point that I write "Mr Wardell" instead of the more casual and chummy "Brad" or "Frogboy".) But possibly, as I have implied in my previous post, Stardock has already killed any idea of offering updates at a cost because "The update fee idea really goes against the spirt of what they're trying to sell with this game."

Well, then, here is what I am going to do : I will mail a $5 check to Stardock for all updates beyond 1.11 (starting with 1.2), up to the release of the expansion. Those of you who exxxpect more free upgrades : well, you're in luck, because the leading members of the GC2 will most probably continue to satisfy you for free --- because of their "passion".

Stardock is not Blizzard.



on May 24, 2006
I would also like to say that early advertising of a game like Society is a great way to get the buzz going! It might not be a bad idea to place a half page add for Society in the near future. But weighing the cost of a add might out rule that idea.

I remember reading about Spore in last years E3 Coverage from PC Gamer and I found it very interesting, then I read the preview on Spore in this years E3 convention in CGW and I was down-right excited about it. I don't know why, I don't really like the Sim series but this game seems just too cool not to give it a try! The game is still a long way from being released and I know that I will buy it when it's released, unless it really gets panned something like a (5.5 out of 10) otherwise I will buy it!

I feel the same way about Society I am very excited about this game, I heard about it on the GC2 forum and checked out the website. I would of done the same thing if I had seen an add in CGW, how could I not check out a game that advertises a MMO-RTS with unique user created buildings thats FREE! Society is a ground breaking game and I am very excited to hear any information about it. I hope you can land a nice 4 page preview soon in one of these magazines and/or online sites to help get the buzz going!

I only hope I can play it over a Dial-up modem! Its all I have available right now, until either Satellite online service lowers it's price or the new (INTERNET through your home power lines.. thingy) becomes available in my area otherwise I will have to sit on the sidelines and watch.
on May 25, 2006
Just my $.02, but while I think it is noble to want to be able to give back. It is supposed to be the job of those magazines to present a fair representation of their industry. It should be independant of advertising. I realize that is not how the system works anymore, but I am enough of a foolish idealist to think it should...
on May 25, 2006
It is supposed to be the job of those magazines to present a fair representation of their industry.


If your talking about not only the content of the magazine but also about the adverts for games contained within them then this creates a problem for advertisers.

Because more often than not adverts sell presumptiously, by selling ideals that are greater than any single product. I'll give everyone an example, an advertisment for a Black and Decker Drill. Adverts often rationalise the product, people dont want a drill they want 3mm holes, people dont want 3mm holes they want a new shelf, people dont want a new shelf they want their home to look beautifull.

And i think its very difficult to sell a video game this way without making it look like you have deliberatly misguided the consumer and duped them into buying a product that was being sold as more than the sum of its parts.
on May 25, 2006
Have to say, I rely more on word of mouth than advertising.
on May 25, 2006
Personally, I haven't picked up a gaming mag in years now. Why? Because since the web took over as the primary source of gaming news, the magazines have become 75%+ ads. I don't want to pay a monthly fee to get a 100 page magazine with a grand total of 10 pages of real content and news. There are so many ads in these magazines that unless the ad is absolutely spectacular, it is lost in the crush of other ads.

In my opinion, the best place to advertise now is on prominent gaming websites. Run contests and promotions on your own sites. Get respected members of the gaming community excited about your product so they WANT to talk about it (Penny Arcade). Maybe get a cardboard stand-up placed in local EB and GameStop stores. Basically, place the advertisements in places gamers are known to go to now. Subscription numbers for magazines is an unknown, and likely sliding as the quality decreases. Stardock leverages the online model beautifully for distribution, it's only natural to leverage it for advertising the same.

Tossing $20k at a magazine ad is probably money that could be better spent on in-store advertising, or even more/bigger/better gaming site ads. But tultimately, the most powerful advertising method is going to be word of mouth. I'd bet having Tycho rave about the game on penny-arcade.com did more for sales than your entire print ad campaign did. He's a respected voice that a lot of people listen to... an ad is impersonal and ill-targeted.
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