Inventory is where it’s at for RockYou.
The company, which recently pivoted away from game publishing to focus on becoming a programmatic in-game video ad network, has raised $10 million in funding from FastPay, a sort of anti-VC that extends credit lines to digital media companies.
It plans to use the money to buy up languishing social, mobile and online games in an effort to pump up its available video ad inventory.
RockYou has a user base of roughly 75 million players, mostly women on Facebook. Although CEO Lisa Marino was unable to share exact revenue numbers, she said about 35 to 40% of the company’s net revenue comes from ads, while the rest comes from digital goods.
“Growing our owned and operated portfolio gives us far more reach to unique users, ultimately delivering greater value to advertisers who can now access even more highly engaged players, i.e., the target consumers for brands,” Marino said. “We’re focused on acquiring existing games, often past their peak but with devoted user bases, and managing and monetizing them through their life cycle.”
In-game ad monetization has been RockYou’s No. 1 priority for several months. Back in April, RockYou bought three game properties from Disney’s Playdom division that were facing shutdown. With the acquisition of those beloved but floundering games — “Gardens of Time,” “Words of Wonder” and “City Girl” — RockYou added between 3 million to 4 million users to its network.
It’s a strategy that appears to be working. According to Marino, RockYou has doubled its revenue year over year and delivers between 300 million and 500 million monthly impressions. Marino declined to disclose how many ad dollars flow through the network.
Of course, things weren’t always so rosy for RockYou. In addition to a major data breach about five years ago that exposed more than 32 million unencrypted user accounts, RockYou was having major trouble developing sticky games, ultimately leading to layoffs of about 50% of its staff in November 2011.
But the move away from game creation towards pure-play advertising seems to have saved the company.
“Our ad units perform so well because they are integrated into game play and natural break in play,” Marino said. “Our large video ad units ensure engagement across our player base.”
It also helps that gamers are a highly engaged bunch. According to comScore, RockYou often has more US uniques than Hulu.
“Gaming is one of the world’s most popular mediums, often competitive in audience sizes to TV and film,” Marino said. “Gamers are great audiences to advertise to. They’re usually in a positive mindset when they see your ad, and having fun. Knowing you’ll reach someone when they’re in a positive mindset is something that’s really attractive to brands.”