Last week Zynga CEO Mark Pincus said that they would take steps to remove scammy advertising offers from their social games. There have been a couple of missteps since then, and Facebook responded by taking Zynga’s newest game, FishVille, offline.
Zynga insists they are serious about cleaning up the industry. And today Pincus has announced that the company will remove all offer advertising from their games.
This isn’t a meaningless action. Offers account for 1/3 or so of Zynga’s rumored $250 million in revenue.
All offers will be removed by the end of today, says Pincus, “until we can control their inclusion and presentation ourselves.”
The blog post also discloses that Zynga is an investor in DoubleDing, an offer provider that competes with OfferPal and SuperRewards. DoubleDing was serving the mobile offers that popped back onto Zynga on Friday.
Pincus’ blog post:
Ensuring zynga’s user experience – removing all cpa offers
michael arrington posted yesterday on mobile offerings still being shown in our new game fishville. I want to explain why this occurred and how we are taking more aggressive steps to ensure this never happens again.
zynga has not been able to control the ad content as it is managed by the offer companies that we work with.
with regards to yesterday’s incident, the offer provider, doubleding, told us this was the result of their failure to remove an optimization queue which was still showing these ads to 10% of pageviews. i want to be clear that zynga had no control over the pages being shown and never filtered them from michael or anyone’s view.
we recognize it is our responsibility to ensure that offers which generate a bad user experience are not shown with any of our games.
therefore, we are removing all CPA offers across zynga games until we can control their inclusion and presentation ourselves. This will be effective by end of day today. this move is worth it for the long-term user experience and value to our partners like facebook and myspace.
yesterday’s mobile offer issue was particularly painful as we had helped fund doubleding earlier this year in the hopes of cleaning up the space and raising the bar on user experience. we intend to influence them and others to improve their ad content and be long-term focused for the success of the social gaming and social networking industries.
as I said in my post last monday, my mission is to build zynga into a sustainable consumer service with enduring value to our users. we will continue to do whatever it takes to earn our users trust and respect for the long-term.
We’ve also heard from DoubleDing President Matt Handal, who responds to our article yesterday:
Michael,
I am the President of DoubleDing and this is not the way I wanted to meet you. I wanted to provide you with some additional information and offer more details for your Zynga article dated Nov. 6. It is my desire that you relay this information to your readers as soon as possible.
It is our intention to fully comply with all Facebook, as well as partner (e.g. Zynga), advertising standards. Zynga’s standards require us to remove all mobile offers which do not offer a clear user value. We take 100% responsibility for any issues that arise from our actions and commit to correcting any errors.
As evident from our logo on the bottom of the offer wall, DoubleDing powers the offerwall displayed in this article. Mobile offers were displayed because of a technical glitch in our system. We have an optimization engine that serves advertisements to 10% of the traffic. Sometime late Thursday or early Friday, a bug in this engine began pulling previously removed mobile offers and displayed them in the mobile tab of our wall. If a user would have refreshed the page 10 times, they would have seen offers in the mobile tab only once. We identified the bug and corrected this within 30 minutes of being notified today. There was NO IP BLOCKING of any sort, beyond the normal country and fraud blocking.
Finally, to reiterate our commitment and seriousness of our intent to adhere to high standards and bring value to the growing virtual currency space, we will be donating ALL revenues derived from this and any future mistakes of this sort to charity. DoubleDing will NOT derive any financial benefit from any such issues.
If you would like any more information or to discuss further, please feel free to contact me directly.
Thanks,
Matt Handal
President
www.DoubleDing.com
Can’t this guy learn to capitalize, that just looks lazy. Still, I’ve escaped Farmville, though almost ventured through one or two of the offers, but stopped long before they ever got any of my information.
this is actually a huge win for users.
I’m not saying it isn’t, but that blog post just looks lazy with near no capitals for sentences and such.
Did you miss the joke? He didn’t capitalize it.
Arrington never capitalizes in his comments, though.
who cares about capitalization.
Personally, I can read faster when there is good punctuation, spelling, and writing.
I also speak with pauses, vocal inflections, and gestures.
Breathe in, unclench your spincter, breathe out, relax. Ease that anal tension, and you’ll live longer.
Opsss, your magic wand vanished 1/3 of companies revenues but huge win for user.
So in conclusion, don’t mess with mike, he will come down to you very hard
Hey Mike, you shouldn’t ignore my comments like this one:
http://www.tech...comment-3083329
You’ve just missed an opportunity for setting the next headline which is:
“Oh no, not again! Yet another Twitter phishing attack spreading quickly”
(a little tribute to MG Siegler superstar
For details, have a look at delbius’s tweets:
http://twitter.com/delbius/
(my 2 cents: as usual, Twitter is veeeerrrryyy slooooow in reacting to security incidents. I have evidence that this phishing attack has been spreading fast for several days already)
Note that this attack is related to your two posts in that in all these cases, the main cash machine is making people sign-up to a $$$ texting plan.
That’s it. Now get someone on the typewriter already
But by the way: Thanks Mike for taking down Anu Shukla.
She’s a damn slimy toad.
Whoa – this is a good discussion and you are carrying out a personal vendetta??? Get back on topic
And this just shows why you are such a poor journalist, this whole series has been tabloid quality looking for big headlines and to make you feel important. You don’t care one bit about the users and clearly have no clue if you seriously think its good for the users.
This action by Zynga helps no-one but Zynga (And your ego). It doesn’t help
- Zyngas users. Most social game players WILL NOT pay. Most Social Game developers would prefer direct payment but most users don’t hold the countless hours of enjoyment social games bring them as the same as the enjoyment that $20 ($10 ticket + $10 for the associated costs) trip to the cinema to watch the latest awful 2 hour blockbuster, or the $50 for the 10 hours gameplay the latest xbox title brings them or the $20 a month to play your MMORPG. If these people want the credit items then the offers were the only way and by forcing Zynga to pull all of them to stop your witchhunt these people now have no way.
- The ‘Other’ Developers and their users.Most of us don’t have the revenues that Zynga has, we can’t do what they are clearly planning and take the whole thing internal. We will still have to run these offers to survive so they will still see them. Infact they may see more as these offer companies may have to scale back their operations making the checks in place even more lax. We use these offerwalls because we need the income and like with the banner ads we run its simply not viable for us to handle it all ourselves
- The Industry. It needed Zynga to be in the ‘market’ to improve, they are one of the few with the power to force through change across the board that the majority of us developers don’t have. If anything you have set the industry back 5 years, you must feel so proud
The scaremongering you have done is shameful, you should have been EDUCATING users about how to spot fraudulent and spammy offers like many of us app developers try and do with our users so they can prevent being caught up in them and if they do fall for one have procided enough protection for themselves that its not a major issue.As it is you now have put the nail in the coffin of many smaller applications. So its not just this mass advertsing of Zynga you have given them, or the great PR with they responses BUT also are helping empty the marketplace of some of their rivals while making other games they may want to venture into their market cheaper to acquire (They already have a rep of lowballing other app developers using the threat of them just doing their own version and then yours being worthless). This isn’t good for anyone to have Zynga becoming even more dominate
” We will still have to run these offers to survive so they will still see them. Infact they may see more as these offer companies may have to scale back their operations making the checks in place even more lax”
what amazes me is how indignant developers get and how seriously they believe they have a right to scam users simply because their games would not be profitable otherwise.
Excellent point Mike. This is awesome news.
No legit developer believes they have a right to ’scam’ users and no legit developer does directly scam any user. And this is what your little tiny mind fails to understand, you are labelling the developers as the scam artists rather than the fraudsters who abuse EVERY form of ‘advertising’ on the internet. Even the ads on this very site aren’t immune from running misleading and fraudulent ads (And Facebooks certainly aren’t)
Very few developers have the resources to go and check every single offer, if we had those kind of resources then we wouldn’t be using the middlemen in the first place and we put faith in the offer companies (Just as we all do with our Banner Ad suppliers) who have greater resources and are setup to handle these. If we could run our own most of us would steer clear of the scam ads as best as we could (When the likes of Google let scam ads through it wouldn’t be fully successful mind you as scammers are pretty smart) as they actually hurt us as much as they do the users as it reduces trust which reduces the long term income from these users. While we can’t run our own we have little choice but to expect and hope our offer providers protect us and our userbase as best as they can.
Its also not as if the scam offers really do make up a large number of the offers. Theres a large number of offers which get wrongly marked as fraudulent offers. These are ones that are perfectly legit but which aren’t the best designed from a user pov which will see a user entering details they didn’t need to or maybe end up at a secondary offer from a completely different merchant which didn’t need done to get your credits (and which by taking may see you never complete the credit offer). These aren’t actually fraudulent, scams or even misleading, just not as clear and concise as they could be and the sad fact is that most Facebook users are hopeless at ready instructions so when its not clear and concise they are prone to making serious mistakes which they wouldn’t with careful reading.
Now don’t get me wrong, these kind aren’t good and they need to be made to be clearer by the offer companies but they also arent scams. The real scam ones do just account for a small number of the offers on most offerwalls.
The simple fact is all of us in development circles want these offerwalls improved as they are actually a good thing (As most users of Facebook refuse to pay anything for the games, and the ads will never be enough to fund them to the required level). Your campaign however suggests that your only goal is to drive traffic to this website and to forget your journalistic integrity. Its tabloid quality that just picks the ‘name’ that will get you the most traction and start a witchhunt with very little ‘facts’ and which focusses very little on the real issue and ignore big issue across all internet advertising and what needs done across the board to solve it. Even if thats not the case and you truly believe you were trying to help the user then you are sadly mistaken, the only people you have helped is Zynga who you may have caused take an income drop for a month or two but whom due to their resources, the advertising you gave them and the pr they have got with there responces will be even better placed to steal from other devs and drive their rivals out of the market place (As they will be able to take it inhouse, be as clean with the offers as it possibly is while the rest of us are stuck relying on 3rd parties who know our only option is to switch provider to another provider with the same offers and getting labelled as con men and having FB holding us solely responsible just to keep you off their back)
Again I think if you had done this campaign right the whole developer community would have been behind you, as it is many of us think you are a talentless hack who is as corrupt and fraudulent as the offers you have an issue with
After reading Simon Wakefield’s comment, i feel sad for his lack of understanding of the Online Advertising industry. The amount of underhanded things going on in there is mind boggling.
If Zynga brings their advertising in house, they can always syndicate offerwalls to other developers and share revenue with other developers. This is good for both parties…. only in the surface because Zynga syndicating offerwalls to other developers means they have ALL your traffic statistic and they will know exactly which game to replicate next. They will just make the same game, drive massive user adoption to that game and yours will not exists any more.
It’s just business, nothing personal.
Zynga will promote positive change? Give me a break. Zynga has exploited all the communication channels of facebook so badly to gain users. They ‘ve long encouraged users to spam their friends by continously creating new incentives. They’ve used gambling ads and deceptive ads. Their tactics was the main reason that facebook has been forced by its community to change their policies numerous times.
That is not to say facebook is innocent here: they have been way too slow to respond (if at all) when we as developers complained about blatant violations from the top 10 apps. Mark Pincus was introduced to developers as a guru that would to teach us how to be successful (http://bit.ly/pDfPS). Facebook benefits enough from zynga’s advertising to keep its mouth shut until the user backlash becomes too grave.
As for offer walls, I use offerpal to handle all payments, either direct or through offers. I have almost zero income from sms-type offers – most users prefer to just pay directly (it is cheaper for them anyway). I ‘ve never had complaints about scams simply because my users never used them (though that may have to do with the fact that my users are not mostly teenagers). The number 1 reason i use offerpal is because they do all the user support so i don’t have to deal with this.
To answer MA’s comment, facebook development was like a jungle, especially in the beginning. Facebook never responded to our reports for policy violations, so it became the norm to be as spammy as possible to gain users. So it became easier to earn millions of users than to retain a relatively small but loyal user base, so everyone started exploiting the big masses instead of going for value in small audiences. It all goes downhill from there.
“And to all those people who go around wringing their hands and saying what are we going to do when the “real newspapers” all die and we have to get our news from Gawker and HuffPo and TechCrunch? Friends, I think we’re going to be just fine”
hay mike
just an fyi…i get my news from the likes of techcrunch, venturebeat, techmeme and gigaom and i think i am doing just fine….tell the ny times to stop drinking the kool aid from the likes of google and fakebook. good job this this analysisof both zynga and offerpal.
by the way, i also read valleywag, so don’t hate me for it.
john
yes, i read the pr story in the times and came away feel more shame for mark p from zynga.
How will Zynga/Pincus/Kleiner Perkins/Fred Wilson/Peter Thiel/Reid Hoffman/Bing Gordon/Sandy Miller and the VC companies pay back all the millions they ripped out of their customers pockets? This is too little WAY TO LATE. They knowingly ripped people off, kids, low income folks. Time to compensate all these people for the ruthless SCAM that has been part of the Zynga business model since its inception Doesn’t look like they have addressed this issue at all. BOYCOTT ZYNGA and it’s investors who all were part of the blatant CORRUPTION!
GRRRR -1
Great decision, I’m sure it was painful to come to, though. Great job Mike on keeping after this story. Did you see http://www.fake...a-is-dying.html Fake Steve Jobs’ post about you? Great post.
they’ll get away with it. they always do.
Pincus’s post should read “Ensuring Arrington’s silence – removing all cpa offers”
they’ll be back soon, with more spam, more scams and more shamelessness than ever. it’s happened numerous times in the past
cite?
http://bit.ly/jvNus
http://bit.ly/1fYXOm
http://bit.ly/3NeKlR
http://bit.ly/3lbifZ
these are links to the facebook developer’s forum; for some reason techcrunch will not let me post the actual links, so i had to shorten them
Not if ordinary users keep an eye out for the return of the scams, and start tipping off Arrington and other journalists when they DO recur. We can help keep the ad networks honest.
“The price of freedom is eternal vigilance.”
b/s . zynga is built on copying other people’s successful ideas , throwing tons of spam to users, and promoting things like gambling.
this is not a sustainable business
everyone in this social gaming industry copies everyone else.
do not generalize. most don’t do that. playfish doesn’t do that, most of the other big game owners don’t, even I don’t.
link gift: http://bit.ly/jvNus
to elaborate on that, it has become a constant fear among social game developers that at some point zynga will make a blatant copy of your app and, using their huge installed user base and spamming techniques, will destroy your effort.
I’ll second this thought, the only way to stop Zynga from doing so is to create a mechanic that would take them too long, and cost them too much, to replicate.
And this is why you are such a poor jounalist. Zynga removing these does not improve things for the users in general. For Zynga players it removes the only way many can get some items and for players I’d other games they will still have offers to contend with. And most of these other games don’t have the staff, power or money to clean them up. Zynga were perhaps one of the few that could but your hack reporting has now basically pushed Zynga to in the long run take it fully in house. Most of us can’t do this, just like with our ad banners we require the service of a 3rd party who have the resources to handle them and due to this most of us don’t have the power to get things changed (just like most of us with websites that rely on adwords to cover the costs dont have the power to get google to clean up their act)
All your ridicoulos campaign against Zynga has done is put the nail in the coffin of many smaller developers and have just helped Zynga and their anti competative practices to win. Infact I wouldn’t be surprised if you are even on Zyngas payroll as you haven’t helped clean up the offer companies or helped either the users or the applications
Wakefield: You appear to personally wrapped up in this to think objectively. Developers don’t come first, end users do. Your entitlement to income is as preposterous as those in the mainstream media.
If the end users want the applications then INCOME for the apps is vital. Sadly too many users believe its their RIGHT to use an application for completely for free, going as far as many users blocking the ad as well as being hostile if paid items/features are added to supplement the income to allow development and running of the app to continue.
Due to this the only way to sustain the application is to give the users a way to earn credits that also pay the developers for doing so. For most devs doing this themselves isn’t viable so we are stuck with using 3rd parties who themselves like any ad network will always put the dev at a bit of a risk as people are always looking to abuse the system (As I have said before EVERY website that runs ads that they don’t run and verify by themselves risks them scamming their users in someway, Techcrunch themselves for example)
We don’t want our users to be scammed but even if we were running everything ourselves its not something we can fully guarantee as theres an outside element and some clever people behind some of these scams yet ‘Michael the Hack’ has spent the last week labelling us the bad guys despite it not being in the control of the app developers OR any website that runs ads which in some ways is malicious and dangerous for user.
Its the scammers themselves at fault, plus maybe some of the ad networks could do a better job who are to blame as they are the ones who are taking advantage of the users, the apps (and in the case of the scammers the ad networks) and its the lazy journalism that annoys me as its done nothing but actually make the whole industry take a massive step back rather than try and move it forward
IOW, it’s really the user’s fault that you run scammy ads. If only they’d pay you they wouldn’t have any problem.
Or at least, it’s bad that TC made an issue of this. How can suppressing information ever be a good thing?
Blaming the customer just deflects attention from the real strategic question: does this business make economic sense?
I tred doing a content play a few years ago and failed miserably at it, partly because I wouldn’t sign up for the scammy networks. I’m not morally superior to you for having done that, but I’m glad don’t have to worry about needing to come on here and defend indefensible business practices.
Mike, I found it interesting and dont know if I am being too much of a conspiracy theorist on this one but i tried to post your link of facebook using this address and it was discussed recently on msn. Usually fb links show up with the heading. this one did not nor did the msn piece. I am wondering and do not know if fb has the capability to limit what is shown but is seems a little fishy.
great piece by the way. thanks for the info.
“everyone in this social gaming industry copies everyone else.”
Thats a bold statement, and even “IF” true does that make it OK? All advertising channels deploy SMS SCAM ads, yet you have an issue with it…
Hosted a networking event the other week with Jason Bailey of Super Rewards as our speaker. Clipped a segment of his speech where he responds to this controversy. Thought TechCrunch readers might find it interesting: http://bit.ly/11OTaP
disagree. It’s a very sustainable business, unfortunately. If something’s for sure it’s that there will always be people stupid enough to fall for such scams.
So betting on people’s stupidity is definitely a sustainable business.
i don’t think so. as soon as the industry gets big enough, people demand better quality through regulation. that’s where zynga can’t stand on it’s own: they can’t write games; not one of their games is an original concept; they just create blatant copies. If I were an investor, i’d rather invest in a cheaper dev house somewhere in PRC.
Copying is the best policy, it’s not good to be always the first if you are able to race pass the first guy. It’s just good business sense to let someone else test the water and only dive in after they made sure the water is warm.
What investors are investing in are not original game concept, but the user base that these game can command and hence the revenue potential. If you have a really good original game, the user base is usually there and that’s the valuable part. If you are able to obtain crazy number of users through copying games, all the power to you.
Bebo, Myspace, Facebook are just few of the successful social network are great example of copying Friendster and beating them in their game. I don’t even think Friendster was the first Social Network.
It’s just business, nothing personal.
i just don’t think so for a few reasons:
1) although they are all social networks facebook had better implementation
2) zynga does not make better games than others, their games are exact carbon copies. they just push them using their spamming system
3) testing the waters is not that expensive in the digital world, so you would expect them to at least try
interesting move to give up one third of revenues
But I am sure user experience is more value !
just in time for year-end bonuses and salary reviews!
Uh, do a little research and you’ll find that doubleding is zyngzynga’s inhouse offer network. More doubletalk out of zynga. They are the industry leader of shady tactics.
Why would Zynga not want a piece of the pie a little more up stream to the advertiser? Double Ding and others are profiting from the traffic from Zynga’s games anyway, there is nothing wrong in getting your hand in to that money pile too. In fact, they would be dumb on not doing that with all the incentive or customer acquisition industry experts working inside Zynga.
This is a pretty interesting turn of events.
we’ll see if all of the “gosh, give it some time guys. these things can’t happen overnight” posters from the last few days have any mea culpas to offer. likely they were just cpa scammers who wanted a few more days of juice out of their deals before they got cut off.
wow that was a fast move… the last video was hurtful
Seemed like an inevitable outcome. Good thing Zynga did this now instead of post IPO next year!
A lot will come out in the wash… IPO might be questionable…
Whoa. Huge. Wish all companies had a conscience like this, even if it is motivated by long-term cash flow.
If they did this without a week’s worth of really bad PR to push them into it, that would be a display of conscience.
Mike, I think you deserve a Pulitzer for this! I also wonder how many other FB apps are slipping under the radar…
“therefore, we are removing all CPA offers across zynga games until we can control their inclusion and presentation ourselves.”
i’m just curious as to how long it will take for the offers to return to the zynga games? This may be a good PR move, until the offers return in 1 week
ha ha, yeah. “we’re removing all cpa’s until we can figure out who will pay us the most for inclusion.”
How come the only thing I can read between the line here is “crap, crap, crap, money is good”
Someone got punk’d….
Huge fan of social applications and social games. I think Zynga’s move here is a very good and smart one for the long term stability of the business, for the platforms, and immediately better for users.
But it’s unfortunate that it took Arrington’s muckraking in order to bring this turn of events. As an ecosystem, and helping growing companies monetize, we need to develop more systems that help people monetize the right way easily, and help shame people more immediately who choose the other path.
why couldn’t they have just removed the mobile tab altogether from the app?
they have the source and could off easy removed this tab surely?
“zynga has not been able to control the ad content as it is managed by the offer companies that we work with. ”
This guy keeps lying and lying. If Zynga wanted offers blocked, Zynga would have had offers blocked. If they account for 10-20% of Facebook’s revenue, think of the percent that they account for Offerpal. 80%?
Don’t know about the rest of you, but after reading this, I was curious, so I checked on whether the offers were gone from FarmVille…
As it turns out, they are, at least for me. And I was reminded of how bad I have let that game go since I stopped regularly using it around 3 weeks ago…
If it was a technical glitch, why not simply contact the company first and give them the benefit of the doubt?
can someone explain what an “optimization queue” is and what’s it’s used for in this context?
nevermind, i used my google powers. the queue is a bucket of ads where they’re not sure whether people will fall for them or not. the ‘optimization’ is a measurement of how effective the scam is.
MIke,
Amazing job on this. Love how poorly VentureBeat handled this scandal. VentureBeat tried to protect Offerpal and their investors (where are the VCs who sat by and let this business scam keep going?), Techcrunch did the right thing. This is Pulitzer winning work, the most important scandal uncovered this year, we will be pushing you for it.
By the way, prepaid online game cards like Zeevex account for 40% of the revenue free to play games make in the U.S.. It’s sad that the social guys keep ignoring this powerful fraud free channel. Though there are a few shady players who partner with Offerpal, there are also a few of us who put gamers before profits.
Keep on it!
amazing job mike.
Agree this was well done of Mr. Arrington and nice investigative/user advocacy work.
Disagree it was “the scandal of the year.” Tech has seen far worse this year than a few scammy ads at the bottom of a few games found on Facebook.
And bashing another site is bad taste. Using your comment to plug your product is even worse.
I am sure everyone remembers when another top popular social networking website first used those little flashing banners and asked you to click the frog or shoot the arrow? A click immediately downloaded numerous spyware products onto your computer that could not be removed.
Mike, you’re honestly an inspiration to me. I wish all media fought for people like this instead of just spreading rumors and lies.
Thanks, keep up the good fight.
Since I dislike most of the Facebook “game” applications and “send virtual stuff” apps because they are just viral schemes, I find this particularly interesting and a great exposee. Because of all the Zynga spam in my feed (I blocked the applications my friends were using but FB has started publishing Farmville/Yoville/etc. junk to the feed since their new design) I am relieved there are others out there who see that these virals don’t really have the users’ interests in mind, but they play on the worst part of human nature to get spread like a disease. I’ve stopped going to Facebook for the most part because of Zynga and will never install and play their crappy rip-off viral games. Especially not when they have offer walls, what makes them different from other apps of this type? Nothing except they are inexplicably addictive to so many people. Zynga and Facebook could get rid of the offer walls altogether, but they won’t. And the generalization someone made above about social games is correct. They are all the same underneath, they just use different looking stuff to get users reeled in. Farms, cafes, the mob, take your pic, as long as you are interested in getting fake items for your virtual existence, and the points, let’s not forget the points, as long as you don’t mind being urged to invite your friends so you’ll level up faster, and if that doesn’t work, there are always the offer walls which can promise you more virtual stuff – while you can part with your real cash! Yeah, sounds wonderful, doesn’t it?
Here’s what I mentioned to my fiancee just now, as she is an avid player of several of these games…
The games like Farmville and so forth advertise themselves as “free to play,” do they not? But, if the only way to be able to play the game “well” is to respond to one of a variety of spammy offers, or cough up real money for “upgrades”…are they not then, at some level, engaged in false advertising?
Food for thought.
Yeah, this is like when people were selling cheap SW Air tickets on Ebay, but they weren’t “allowed” to, so they sold you a picture or something and gave you the tickets for free. Only, in this scenario they sell you a horoscope and do it without telling you (well, the UX is so bad it has to be intentional). The PRICE should be shown in the largest font on the page.
I heard Zynga just bought flooz.com.
Its not false advertising as long as its fully playable without the paid additions. Which pretty much all these games are. The paid upgrades just give you more to style your game with or make it a bit easier and quicker to play
So, is the facebooks business sustainable without the scammy ads? The reason I ask is that their normal ads are completely worthless.
btw, Techcrunch has the similar sort of scams popping up on its pages thanks to the Google Adsense network. All the ads have audio enabled if you hover your mouse over it, are localized and lead to a localized mobile subscription service.
I guess it’s not an outright scam because it says in small print that you are getting a subscription for $5 a month.
The guys running this are – http://www.timwe.com/
maybe i’m hopelessly naive.
matt handal seems to be a reasonably good bloke. past actions aside, i can’t fault the response to this (isolated) incident.
as for mark pincus, capitalisation is overrated.
I would imagine they have worked out how to retain the revenue through other channels. Any other new startups or JV’s?
How will Zynga/Pincus/Kleiner Perkins/Fred Wilson/Peter Thiel/Reid Hoffman/Bing Gordon/Sandy Miller and the VC companies pay back all the millions they ripped out of their customers pockets? Have they addressed that issue? This is too little WAY TO LATE. They knowingly ripped people off, kids, low income folks. Time to compensate all these people for the ruthless SCAM that has been part of the Zynga business model since its inception. BOYCOTT ZYNGA and it’s investors who all were part of the blatant CORRUPTION!
There is a difference between knowing that there are scams out there and being complicit on the scam.
Its like you having a small personal blog which you decide to fund the running with Google Adwords despite you knowing full well that there are scammers who use that and every other ad network for malicious reasons ARE YOU really guilty of fraud and corruption
Zynga being at the ‘top of the tree’ are perhaps the most culpable as if any social game developer has the resources to ‘check’ every last offer but even then its a bit of an ask to expect them to be able to do this. Not least because the only true way to really check them over is to complete each one, something which you aren’t actually allowed to generally do and as they are often Geo targeted its often not even viable to complete every one to test it out.
Most developers after all use 3rd party offer companies BECAUSE they are unable to hire people to specifically handle the offers, if they could they would probably handle the offers completely inhouse where greater control would be viable. We put our faith as developers in the Offer Companies doing their job and keeping as many of the bad offers away and when ones do creep through to handle them quickly and efficiently.
And remember most developers only consider adding offerwalls into the applications because of the users. We would all much prefer to be getting a few dollars every so often, be it a week, month or year from our users but we are internet applications and its one of these things that sadly no matter how much enjoyment they get out of it the majority of users are unwilling to put their hand in their pockets, so to get people to do so you have to give them an incentive. This usually means having unique items that can only be obtained by buying credits.. This pushes the numbers that will put their hand in their pockets up a little BUT then you have the masses going “Its not fair I cant or wont pay real money but Its my right to have those items”. So you then have two issues 1) You still haven’t turned a good number of users into valid revenue streams 2) You need to somehow let people get the items without paying.
So this is where offers come in. Most of these offer companies have many decent offers that pay out and are clear and concise, theres also many which are not as clear and concise as they should be which can cause problem if a user decided not to take time to read everything AND THEN theres a relatively small number that are outright fraudulent. If you want the income from the good ones so that you can give the users the free credits they want then sadly you have to accept that there are scammers out there and you just have to put faith in the offer companies to do their best against them.
It is not in the best interest of the Offer Companies to turn away Advertisers. Everyone has their self-interest, if you are not looking to generate revenue from your games then you won’t be sucked into this conversation. Since you are trying to make a buck and satisfy your self-interest then you game is letter the Incentive Offer companies access to your users.
If you don’t look to generate income from your game though then you can’t keep up with not only your competitors but with the demands of your users.
If users were more willing on a whole to make micropayments for ’social games’ then you could fund the game without doing to 3rd parties for advertising OR perhaps if Facebook did the right thing and shared some of that ad revenue that our ads brings them BUT that isn’t happening. And most of us developers aren’t looking to turn over Zynga money and as as such aren’t as aggressive with pushing users to get ‘real cash credits’ (or the ways we market) we just don’t want to be having to fund the the enjoyment we bring people out of our own pockets alone, especially when Zynga will just steal our ideas. They need to be self sufficient
I stopped using facebook because of Zynga. It is really not very interesting for me to see the brown cow, the black sheep and when somebody levels up in Farmville. It makes my user experience worse.
How do you generate revenue from a free game unless you sell them something else somehow? The behavior described by Mike Arrington is not going to go away, just shape-shift.
To get a sense of what’s in store, here’s some delightful double-talk from their FAQ – http://bit.ly/2eaput – entitled “What is scamming and how do I recognize possible scams? ”
A: “It is the responsibility of every player to protect their account information. By practicing safe internet habits and following the rules of our Terms of Service, you can prevent your account from being hacked and protect yourself from scams. Never give out your email address or password to anyone for any reason. Zynga Support will never ask for that information.”
This fails to mention that your email address is asked for (i.e., required) numerous times (as per Mike’s video) prior to your contacting “support.” In fact, if you want to talk to Zynga support you have to register with Zynga, where they do ask for your email address and password. If they never ask, why do they need this information?
Other question on the Zynga support FAQs give a sense of the utter joy that awaits the Zynga customer:
“Why am I seeing multiple transactions from Zynga when I only made one purchase?”
“What is Zynga? Why are they charging me?”
“Why am I charged an extra dollar on my Credit Card?”
“I was attempting to purchase game items and my credit card was declined so why is a charge appearing on my statement?”
“I made a purchase through PayPal or CCBill but was not credited with it. What do I do?”
“I purchased Favor Points from PayByCash but they’re missing. What do I do? ”
Whether all this nonsense is illegal or not doesn’t change the sanctimonious nonsense emanating from Fred Wilson and his cohorts about how Mark Pincus is such a great entrepreneur. By this reckoning, Bernie Madoff was a great entrepreneur too — maybe the best of all time.
I think you single handedly pushed back the IPO 12-18 months.
While you’re on a roll
, I keep seeing an ad on FB called San Francisco Almost Free. I signed up using e-mail (but refused the in-FB app), and never received a single offer. Luckily, I used a throw-away e-mail.
I wonder if this scandal has affected the deal with Playspan and EA–wasn’t there some report a while back that Playspan was in acquisition talks for something like $250-$500 mil?
If other social gaming companies follow suit with Zynga, then that has got to affect valuations. Wonder what the folks at EA are thinking these days…
It is a great ego win for all Tech Crunchies, but i doubt that Zynga took down the CPA offers to the benefit of the users. This is primarily due to the entire situation heated up too much and they fear that Facebook will just shut down all their games. Losing 3 ~ 4 weeks worth of revenue is much better than losing all the million of users that they have build out so far. The users are way more valuable and considered one of the primary assets as you can monetize them any time you like.
Zynga is basically letting the public *think* that they have won and try to figure out another way of generating revenue besides Cell Phone CPA offers.
There are a few other scammie Revenue model for Zynga to pursue.
1) In game CPM Advertising. This would work quite well for generating Revenue, if Zynga is able to pull it off.
Mainly for 2 reasons,
First) Facebook’s security feature allows Zynga to pull nearly all of the user’s information after you have granted permission to access the app and thus Zynga would have very specific information to target advertising on a CPM basis.
Second) Combine this with the amount of Impression Zynga generates via their million of users, it is a very enticing to Advertisers. Zynga can easily make games that appeal to certain segment of the user base where Advertisers would love to advertise in.
I am not sure if Zynga already have such technology or even the sales connection to hit up Ad Agencies. If not, they can definitely partner up with companies like Glam Media who provides high CPM ads. Their ads are $1 CPM but with Zynga’s size, i think higher CPM for their premium ads are not a problem.
2) SMS based advertising. Go the route of companies like 4Info and other fast rising Mobile Advertising companies. This industry is pretty lucrative, basically you manage some companies’ Cell Phone list and help them send out notification and send an SMS Ad after the notification.
How this work is say, on ESPN quite a few users will sign up for Mobile Updates and that usually come in as SMS for scores, etc. What Zynga or maybe DoubleDing needs to do is manage the Phone List for EPSN and send out the Mobile Updates and an SMS ad. This is not as lucrative than having a $10 ~ $20 charge on the cell phone bill every month and piss off 90% of the user based but it is less intrusive as the users are getting some kind of information for free and the information is paid for by the SMS ad. What Zynga can do is basically run advertising offers like this for E.A., ESPN, CNBC, etc similar to the Cell Phone CPA offers but instead of charging $10 ~ $20/month. This is simply Mobile Update sign up and Zynga monetize the phone numbers by spamming SMS to the cell phones which is not illegal due to the Do Not Call list having a loop hole to allow marketers to contact you if you signed up or bought something from them in the last 90 days. If Zynga don’t want to spam it themselves, they can resell or rent out the Mobile List to other companies like DoubleDing and they can get a Rev Share from it.
These would be the suggestion for their alternative revenue source since the current CPA model is being hated upon. I don’t think they can sell credits directly to users fast enough to generate the 1/3 revenue lost in a month or two.
Glam is a shitty network.
U know it, I know it, Advertisers know it…
Glam is not shitty, they just keep quite a bit of the revenue. They do this my running the most expensive ads on their own sites and syndicating remnants to their publishers.
It’s just business, nothing personal.
Whilst I have to commend Mike on the results he’s getting, especially wrt Zynga, it’s important not to throw out the baby with the bathwater. A lot of people in social games do actually make decent products, and don’t try to scam users, however, for those reasons they don’t have the same revenues.
Like many I dislike the whole microtransaction/virtual goods thing too, but the whole games industry started with arcade machines that were artificially difficult in order to keep people pushing quarters in, which in itself is arguably scamtastic. This side of the industry has had, and will always have, an uncomfortable relationship with exploiting those they can get addicted. Some are just more honest about this than others.
Maybe Zynga will also one day understand what Facebook means by “Don’t allow Texas HoldEm Poker to publish without asking me”.
It’s in plain English so they should be able to crack the code if they get a solid team on it.
Zynga sounds very similar like “singar” which in spanish (mexico) means fuck or fucked.
That is exactly what they are doing to their customers.
michael,
got to applaud your calling zynga on the mat here. too bad you did not show equal diligence regarding the credit card offers on mint.com. no less a scam, just far fewer users.
I hope this cleans up the industry. Maybe people should just learn that paying to play might be a better and more sensible option
As an aside: using FF + AdBlock will prevent you from seeing most of these. So this becomes a non-issue.
This weekend I helped my family get set up with FF + AdBlock just for this reason — to keep them a bit safer while using FB.
Sorry to the legit developers whose income is ad-based. But until the environment is clean and safe, I will protect my family and friends from being scammed.
So you mean never then as it will never be clean and safe, just as things aren’t ‘clean and safe’ in real life.
People using Adblock is another reason why developers have been forced to use 3rd parties who run these offers and thats because people are not seeing ads being run so it makes a weak income stream weaker. And not just for Facebook apps BUT you are hindering every site you and your family uses.
It would be better to instead just teach them the basics needed to stay safe on the internet
Keep vigilant Arrington. I guarantee you that these guys are intent on going back to these scams after the heat dies down.
They know that without these scams, they are going to find it incredibly difficult to turn a profit, so they will have an incredibly strong incentive for recidivism.
The offers or methods may change, but undoubtedly they’ll be targeting kids with something shiny and fun.
Besides the obvious cleaning up operation in progress, this episode has been an amazing case study for how to deal media when your reputation is in dire threat..
Kudos to Zynga and Doubleding for pulling it off really well..
So what is going on now is Zynga is recoding their games to CONSTANTLY spam the user to spend cash, buy premium items, etc. Roller Coaster Kingdom is the worst of them so far with the in your face spamming. They are also actively policing their forums and deleting any reference to any of these posts and charging people who do post references to these articles with TOS violations.
Am I the only one to realize that Zynga is doing this not because it suddenly discovered altruism, but because it’s the best way to sink its competitors?
Now that Zynga is bigger than everybody else, they need to prevent competitors from achieving the kind of revenue growth they’ve had, and use their economies of scale (ability to outspend everyone in ads, release games more often, etc.) to cement their dominance. The best way to do that is to take a public stand against offers so that competitors can’t use them to achieve true revenue growth and compete with Zynga.
What would you say about a company that used a scammy business model to grow really quickly and become biggest in its market and, once it was, lobbied Congress to prevent that same business model so its competitors wouldn’t catch up with it?
To be sure, removing offers is a good thing, but let’s not kid ourselves that Mark Pincus has suddenly seen the light and become honest and benevolent.
Cant we just leave this subject and move on??
Good one Arrington. You proved your point and I feel everyone got the message.
Waiting for the next malpractice to be cracked by techcrunch!
Another interesting blog entry -about the role of Facebook vs. Arrington, Zynga vs. Offerpal, CPA Offers, etc. – from an insider.
http://bit.ly/3KKCB6
Michael,
given the nature of remnant inventory, we are seeing all sorts of scammy ads on sites of your company as well. I guess it is really hard to properly police a network, especially as the legal compliance and scamminess are two different this. I would not be surprised to find such scammy ads on even high quality inventory like Yahoo, etc. It’s just a matter of looking from the proper IP address to get ahold of the remnand stuff.
Regards
Of course, this all assumes that Pincus and Co. are telling the truth. I am sure the many users of Tribe.net will tell you how much Pincus cares about telling the truth to the users. They even lied to Arrington and us in this article by telling us that they didn’t IP block him. Bullshit, that’s EXACTLY the sort of stupid kludgy deceptive “fix” that Mark would come up with and then try to lie his way out of.
In other words, when all this furor dies down and the damage to their impending sale or IPO is lessened, they will start the offers back up. My four favorite words are “I told you so”.
These ad networks and the developers that use them are all cockroaches who run for cover when the lights come on but they will be back. They just have to go massage their crap a bit to make it look different and then they will be back until someone turns the light on again.
Pro Tip: If your business cannot survive without scamming your customers then your business is full of FAIL! Find a new business!
Way to go Mike! Keep turning those lights on!
More like, sorry we got caught as opposed to sorry for what we have done. Users should keep a sharp on eye the gaming folks.
They have no alternative revenue source. They will go bankrupt.
And then there was the “seeds for Haiti”.
50% of PROFITS went to charity. That means 90% could have gone to Zynga (depending how they define the cost they dedected from profit).
They are not honorable.
That is the main point of the first article.
From what I’ve seen by the way they respond to software issues, they really don’t care about long term users – which makes sense, since they are not likely to continue spending on the game.
They continue to add new features, and excuse program bugs with the phrase “It’s in Beta”.
An reputable software company wouldd not continually add features to a program rife with bugs already – especially not during beta testing.
Every new feature introduces more problems, and usually makes existing problems even worse.