Ninja Metrics is raising a $5M round for analytics on social gamers and video watchers

Gaming analytics startup Ninja Metrics is in the middle of raising a $5 million round led by 37 Ventures.

The company confirmed in a filing with regulators that it has raised $2.8 million out of a $5 million round as part of an investment in its Katana for Entertainment analytics service, which grew out of its Katana for games analytics engine. This targets entertainment companies that don’t do games.

Ninja Metrics’s chief is interesting — Dmitri Williams is not just an executive but also a professor at the University of Southern California. He said in a statement that the L.A.-based company has been strategic about taking on new investment, and this new round will provide the capital for the company to reach new heights for its business.

He also noted that the Katana for games engine, which has analyzed 400 million users across some of the worlds’ most popular games, is also going strong.

Williams’ team spent a lot of time building a social predictive analytics engine, which has begun to pay off in a variety of ways. By identifying users who bring “social value” to games, Ninja Metrics can identify the ad networks that deliver more of the most valuable players than others. It can also make a developer’s ad spending 40 percent more efficient. Ninja Metrics may be able to eventually do something quite explosive: identify which ad networks are really the worst at delivering what they say they will.

It all starts with some of the fundamental research that Ninja Metrics has done on people who are social butterflies in games. The company gives marketers the capability to determine the true ad value of a user, which is different from the immediately observable value. The analytics work with PC, console, and mobile games and apps.

Most analytics engines don’t identify “social whales,” or the people who cause spending in multiplayer games. Williams said that these people are like the life of the party. They get their friends to go to a bar and spend money on drinks. They may not spend much themselves, but if they weren’t around, those friends wouldn’t spend any money at the bar.

In mobile and online games, these players are hidden. Most analytics engines pay attention to the payers, or whales, who spend money. They discard the social whales because they aren’t really looking for them.

But the social whales have a great deal of social value and influence. Ninja Metrics can find these people, and it has found that some ad networks have more of them than others. That means that the value of that ad network changes based on how much social value its players have. Ninja Metrics has taken its data and studied a collection of ad networks. It isn’t yet publicly identifying the worst ones, but it will reveal the data to its paying customers.

If developers redirect their spending to emphasize the ad networks with the social users, the return on investment increases 40 percent, he said. That results in a more accurate reflection of True Ad Value. The Katana Social Analytics Engine ties in-game social behavior and player influence back to the advertising referral source, enabling companies to track their return on investment for each advertising source.

Ninja Metrics can also apply this analysis to territories, so it has figured out which countries have the most social users and which ones have the least social players. Some countries have a lot of social users, logically, because they are poor countries where they don’t have much money. They cause a lot of social activity and spending, but don’t have much money to spend. The richer countries have fewer of these people. Germany’s social value is 8.64 percent worse than observed, while Argentina’s is 99.63 percent better than it appears to be. This means that translation to Spanish could be a good investment in a game.

Williams said in an earlier interview that one strategy is to mix the players together, in terms of grouping them together in the same location or server within a game. The social users will cause the players with a lot of money to spend more, and the result will be good for game revenues. Each player has a social value, like a credit, and “influenceability,” which is like a debit.

Research has borne this out, Williams said. One person may cause three friends to spend $243 in a month. If that player drops out, then their spending drops by $243. In an actual case, the drop was $236.

Here’s where the results are fascinating. Mobile single-player games get about 6 percent of their revenue from social value. People talk to each other about playing their single-player games, and that results in spending. With mobile social games 28 percent of the revenue comes from social value. PC hardcore multiplayer games have 30 percent of their revenue from social value. And with massively multiplayer online games, 60 percent of the money comes from social value. And, not surprisingly, those games are quite profitable.

Ninja Metrics isn’t disclosing its customers yet. But there’s a Zynga logo on its web site under partners.