RockYou is clawing its way back.
The 8-year-old company, which once produced social games, was one of the first MySpace and Facebook third-party app developers until it suffered a major data breach five years ago that exposed unencrypted user account data of more than 32 million users.
That wasn’t RockYou’s only struggle. The company couldn’t develop successful games besides its “Zoo World” game and laid off about 50% of its staff. CEO and founder Lance Tokuda also stepped down.
Two years ago, RockYou pivoted away from gaming, focusing instead on media.
“RockYou makes its money from video and we are an in-game video ad network,” said CEO Lisa Marino. “We’re focusing on ad monetization, not just in our ‘Zoo World,’ but also in third-party games. We work with more than 100 publishers like Zynga and Wooga.”
RockYou’s portfolio includes an in-game video ad platform and a games network that has been used by advertisers like Verizon, P&G, Sprint and Coca-Cola. AdExchanger spoke with Marino.
AdExchanger: What happened during that data breach incident and how has the company changed since then?
LISA MARINO: What got hacked was a photo-sharing site, which had all these user IDs and passwords. We had tens of millions of people who had enrolled in the program through MySpace and Facebook.
We closed the site and settled with the FTC. Now we’ve got a bunch of auditing techniques that we go through. We don’t keep the passwords and other information anymore.
We still have some user data from Facebook about the active players in our games because we need to give them virtual currency, or we need to address issues for customer service tickets, but that is all anonymized.
What exactly does RockYou do today?
We run live games, we put video ads in them and we get the users to stick around in exchange for premium content. For us, (gaming is) a way to engage eyeballs that advertisers want to get in front of. We understand who and what those eyeballs or audiences are so we can package it effectively for advertisers.
We build audience segments and we work with real-time bidding demand-side partners, like Brightroll, Adap.tv, Tubemogul and Videology to help advertisers bid effectively and hit their audiences. We have about 30 different demand sources that we plug into on the video side.
How many impressions do you deliver?
In Q4, we averaged about 300 million video impressions per month. (The company recently updated its numbers to 500 million monthly impressions.) About 25% to 30% of our inventory is our own games and the rest comes from network partners that we work with.
What kind of games are on your network?
We’re excited to be acquiring “Gardens of Time,” “Words of Wonder” and “City Girl” from Disney’s Playdom division (which Disney downsized in March). We’re taking on the whole game team including the engineering and product management teams.
We’ve been quietly working on this roll-up strategy over the last year. In December we acquired the 50 Cubes titles “Mall World” and “Fashion Designer.” Within the first 30 days, we increased net revenue by 10% and reduced expenses of those games and we’re in the process of doing that again. We also have our poker games.
How do you see the mobile video programmatic space evolving?
The state of mobile video delivery looks like online video did three years ago.
Mobile video is still largely sold direct on an I/O basis. So what you see in mobile is a fair amount of video being delivered, but people who have video inventory don’t have a lot of brands. What they have are game developers like King.com and Zynga.
The endemic advertiser base that used to exist online is still prevalent on video for mobile.
But that is going to change in 2014 in a big way. The game developers who are spending money on mobile are going to get displaced by brands as the industry comes up with more scalable and automated ways for brands to plug into this inventory.
Why this year?
What’s happening this year is the connections are being built. As Adap.tv, Tube Mogul and various partners develop their mobile solutions and connect to inventory in the way that you can connect to online today, programmatic video is going to become prevalent in mobile advertising.
Where are you in terms of revenue?
What I can say is we’ve been profitable since June of this past year. We’re going to keep growing our network, both online and on mobile and continue buying games and working with third parties to grow the inventory as well.
