In Facebook games, a small pack of companies has most of the users. Applifier wants to change that, creating a new marketing vehicle so that independent game developers can cross-promote their games to a big audience. This idea, which the company describes as the “rebel alliance,” has gained a lot of momentum in the past year and has led to a new round of funding for Applifier.
If it works out, indie game developers may be able to hold their own against the emerging giants of social games, and that’s going to be good for innovation in the games business. The Helsinki-based company is announcing today that it has raised $2 million in funding from MHS Capital, PROfounders, Tekes, Lifeline Ventures and angel investors David Gardner, Jyri Engeström and Lars Stenfeldt Hansen. The company will use that money to expand beyond Facebook to other platforms, such as games played on web portals.
Applifier is one of those companies that tries to restore some balance in a market — a counterforce, if you will. Every market needs something like it in order to push creativity, independence, and user interests. In social games, companies such as Zynga, Electronic Arts-Playfish, and Disney-Playdom have become powerful because they can promote a new game to millions upon millions of existing users, making it much easier for a new game to take off. But small developers don’t have that same means of distributing their games.
Jussi Laakkonen (pictured), chief executive of Applifier, figured that out the hard way when he started Everyplay, a social game company that had no budget to promote its new game. So his team came up with the Applifier cross-promotion bar, which is a lot like the strip of app names that Zynga displays above its Facebook games, as a way to promote other games in the Zynga network. But while Zynga only promotes its own games, Applifier promotes the games of a bunch of social game companies. Those small companies are the “rebel alliance,” as in the film Star Wars, who struggle against the evil Galactic Empire.
“We’re growing from this cabal of sorts into a neutral Switzerland,” Laakkonen said in an interview. “We make sure that the companies trust us for treating them fairly.”
For Laakkonen, that means he’s not making games anymore, which, for a game developer, is kind of a painful transition to make. But he thinks that he has an opportunity to grow a meaningful business with Applifier and he’s running with it.
Applifier draws attention to smaller games on Facebook by adding a “cross-promotion” bar to the top of each game that recommends games from other independent developers. Users can click on the recommended games to see if they want to play them. Applifier launched in April, 2010, and by August it had more than 100 applications with 55 million users.
The company hasn’t released new numbers since then, but it said that it can now deliver over 750 million ad impressions a day and it has delivered more than 50 million free clicks to its partners, as of mid-December. Laakkonen explained that each bar exposes a game player to as many as 15 ads during a 10-minute session. A decent percentage — somewhere around 3 to 5 percent — of users click on the bar, mainly to discover new games.
“We are helping users discover entertainment that is relevant to them,” Laakkonen said.
Among the games that have been promoted are Booyah’s Nightclub City, Digital Chocolate’s Millionaire City and MMA Pro Fighter, ZipZapPlay’s Baking Life, Ninja Saga’s Ninja Saga, GameHouse’s Scrabble Worldwide and Uno, Wooga’s Brain Buddies and Bubble Island, Icebreaker Games’ Cafe Life, Free Lunch Design’s Icy Tower, King.com’s Funflow, iWin’s Party Resort and JewelQuest, Playfirst’s Chocolatier, Cie Games’ Car Town, Sulake’s Habbo, A Bit Lucky’s Lucky Train, Raka Games’ Crime City, and Tetris Online’s Tetris Battle. Just about all of those have more than a million active users.
Applifier says its network is second in size only to Zynga’s. Not bad for a company that has only 13 employees. But the company showed up at the right time. Back in March, 2010, Facebook decided to crack down on game-related messages in its communications. Facebook concluded that users who didn’t play games were getting too much spam and put restrictions in place that resulted in a loss of millions of users for social games. At the same time, advertising costs on Facebook rose rapidly.
Applifier’s cross-promotion bar can be implemented by developers with the addition of five lines of HTML code. As we noted before, cross promotion is a well-tested strategy. Zynga does it with its own games. Heyzap and Mochi Media do similar cross promotion for web games. LinkExchange, started by Zappos founder Tony Hsieh and Sanjay Madan, also did cross promotion when it was founded in 1996. LinkExchange created banner ads that cross-promoted other ads. It was acquired by Microsoft for $265 million in 1998. Laakkonen saw Applifier as a LinkExchange for games. A current rival is Appstrip, which was bought by Tapjoy.
But Laakkonen says his company has a bigger reach. Applifier earns a commission on the clicks exchanged through the network. It’s similar to an ad-link exchange; a member that sends 100 clicks out receives 100 clicks back minus Applifier’s commission. Applifier sells the clicks earned as its commission based on whether users click-through or actually install an application.
Disclosure: Mark Sugarman of MHS Capital is an investor in VentureBeat.