Why Machine Zone still buys "overpriced" TV ads

Machine Zone has consistently been among the top mobile game earners thanks to its titles Game of War and, more recently, Mobile Strike. Most of you have likely seen the television commercials for Game of War, initially featuring Kate Upton and then Mariah Carey. And for Mobile Strike, Machine Zone has leveraged Arnold Schwarzenegger's commanding presence. The thing is, CEO Gabe Leydon actually does not like TV advertising whatsoever. Speaking at Code/Media last week (the full video/audio replay can be found here) Leydon explained why Machine Zone continues to spend top dollar on TV spots and celebrity spokespeople.

"Television's actually really small in comparison to digital... The audience is really tiny, the response rates are really bad. I wouldn't recommend television to anybody unless you were buying as much as you could on digital. Because the only thing you really get out of TV, which is overpriced and I don't want to throw anybody under the bus but there's a lot of very expensive television out there that no one watches the commercials on and the buyers that buy it don't know it because they're not tracking it. We know it because we track everything that we do, so we're very careful about what we do," he remarked.

"The biggest thing that you see out of television is that it creates a halo effect - we buy more impressions than you get from the Super Bowl everyday, but before you go on TV you're not a brand. There is social power to it, but the value of what you get out of it is only really captured in digital. This is what we've learned. So if you buy television there is an effect on digital marketing, meaning you can measure the click through rates, your prices do go down when you buy on television. If you were to buy just on television you'd probably go out of business."

"Mobile gaming is the most frictionless business the world has ever seen. No one's ever seen anything like this... You can't sell water that efficiently"

What some people don't understand about spending money to sign stars like Arnold Schwarzenegger is that it goes far beyond TV ad spots. "We don't just use them for television; we actually look at online more than how they're going to perform on TV to be honest. Arnold Schwarzenegger is an international star. That's what people misunderstood about Mariah Carey - she's the number one artist in Japan. We care a lot about Japan. She's huge in South America. So we think about the whole world. We don't just think about the United States. The spots are very expensive so you have to be careful. We're trying to market to everybody at the same time," Leydon explained.

And getting worldwide attention is the goal for any major mobile company. "The potential is worldwide... everybody will download a free game at some point. So our goal is how do you get it to everybody?" Leydon said.

The fact is that mobile gaming is a massive opportunity if approached the right way and with the right tools. "Mobile gaming is the most frictionless business the world has ever seen. No one's ever seen anything like this. You've got 3 billion devices. I can put a billboard up on the side of the freeway... you can take out your phone from your pocket and go to one of two app stores... you can download the app and you can start playing and potentially maybe if you like the game you can spend money on it all within 120 seconds. You can't sell water that efficiently... This is all instantaneous worldwide distribution, with potential instant engagement and instant monetization," Leydon enthused.

Leydon gave the audience a scare throughout his talk, stressing how inefficient current brand advertising is. He said ad buyers are missing the point with television at the moment. "It's really small, people are skipping commercials. Why are they buying TV? Because they don't have the proper tools. When they have the proper tools, TV will have its own reckoning," he warned.

"Many things that aren't currently measurable will become measurable - the current version of brand advertising will disappear. The new version will be highly measured, so it'll be hard for a board that has to allocate funds to an investment, it'll be hard to allocate to investments that they cannot quantify as the market becomes more quantifiable; so brand advertising as we know it will suffer because boards who allocate budgets won't be able to justify the spend when they can measure ROI positive spends on other channels."