Interview: New RockYou CEO Lisa Marino Talks Social Gaming, Advertising and Mobile
Having begun life as a photo-sharing app on MySpace in the middle of last decade, RockYou rose to become one of the largest app developers on Facebook in the early years of the platform, before being overtaken by Zynga and other social game developers.
Meanwhile, the company has widened the scope of its business, launching an advertising network and a subsidiary in Asia.
Following this range of efforts and mixed results, the company is now refocusing all parts of its business around social games.
Lisa Marino is leading the transition. A revenue development executive who joined the company in 2008, she has moved up over the years, serving as RockYou’s chief revenue officer where she managed its media business, before taking the chief operating officer role last year. Yesterday she was named the company’s new chief executive. It’s now her job to make all the pieces fit together, a challenge we explore in the interview below.
Inside Social Games: You’ve been with RockYou since 2008, and you’ve been heading up operations since last August. Walk me through the transition process that brought you to today.
Lisa Marino: I became COO in August. At that time, our games and ad businesses both reported to me. We had a lot of work to get done in terms of bringing in new talent that would allow us to build games effectively.
First, We brought in Jonathan Knight [from EA] in October, and he’s been the lynchpin of rebuilding our games. Lance [Tokuda] chose to step down in late September.
Shortly after Lance stepped down, we made a lot of tough decisions to get the business on track and focused on social games. Then, we cut cash burn by 60% at the end of last year, which put us in a situation from a cash perspective where we had 2 to 2.5 year run-rate. After that, we went after some big problems that had been low-hanging fruit. For instance, JK cancelled the games pipeline, because they weren’t going to be successful, and instead started a new games pipeline from scratch. Last, we also completed two acquisitions in Q4 — Tirnua and Playdemic — which brought us terrific gaming talent as well as a live game.
Additionally, we continued hiring more creative gaming leaders with much more traditional gaming DNA. JK and his team have been able to attract a pretty experienced group — Steve Cartwright, a 30 year gaming veteran, and John Yoo from Zynga were early key hires.
Then in Q1 we started rebuilding the executive team, which has been in place for the last 5-6 weeks. We brought on Julie Shumaker, our GM of Media, who has been in media gaming for a very long time and Katrina Osio, SVP of Marketing, another gaming and media vet.
Our tough decisions taken recently have yielded quick results. We ended up beating revenue Q4 2010 revenue projections by 40%, and at this point the gaming investments we made are near launch — including Zoo World 2 coming out in May.
ISG: That’s a whole new game, right? Not just an expansion?
LM: Definitely a new game — new art, simplified mechanics and a revamped economy. There are some screenshots and forums and fan pages. We’re super excited. The focus groups have been pretty positive so far. [The official Page is here.]
ISG: And you have a Loot Drop game coming?
LM: Yes, we have [John] Romero’s game. We’ve worked really hard to build a quality games pipeline and partnering with proven game makers was part of a strategy where we evaluate content more broadly.
Besides Zoo and Loot Drop, we are more generally a two-studio company now — the Playdemic team in the UK and our headquarters here in Redwood City.
ISG: You’ve repositioned to social gaming, but you’re keeping your ad business. Can you tell me more about how the pieces of the company fit together at this point?
LM: We’re the only company that can combine the ability to make gaming content as well with the very powerful incremental monetization that our media business brings.
Our media business is still incredibly large: 300M impressions a day on our ad network, 170M uniques a month — it’s a great engine for user acquisition. We also do brand sales, including ad integrations into games.
We’re able to increase ARPU 25% to 30% every single month because of our brand sales initiatives — when we’re buying users on Facebook, that makes a lot of difference for life time value. [Ed. You can check out RockYou traffic data on AppData, our tracking service for top apps and developers on Facebook.]
As a social gaming company, that doesn’t mean we just make games. We focus on games, how they’re built, distributed, and monetized.
ISG: Can you explain more what you’re providing to other developers now?
LM: We’re still selling installs for other developers. The inventory of ad network is almost all Facebook — it’s app inventory, games, quiz apps, video apps, poking apps.
The core of our business is not necessarily to take the app ad network and grow it to compete with Lifestreet. It’s really about leveraging the asset for distribution, as well as monetization within those apps.
We’re building out our brand team to really boost up monetization within games. Ad content for us doesn’t necessarily mean we’re just selling for games that we build at RockYou. It may mean that we sell brand ads for other developers’ games.
ISG: Are you moving more into publishing as well?
LM: The Romero deal is a very classic old-school gaming publishing deal. We own the IP when the game launches.
We’re having lots of conversations about publishing other peoples’ games — it’s something we’re starting to look at more seriously.
ISG: Can you tell me more about how your brand ad sales work?
LM: When we think about brand side, we don’t run a lot on our ad network. It’s more more ad units within a handful of partner games; our deal of the day unit is terrific and as of 15 months ago WAS industry leading for in-game innovation.
We do a lot of other types of brand ads — page takeovers, branded virtual items, or other custom branded experiences.
When you think of the value brands add in a game, one must remember that 1% to 2% of users actually pay, but everyone wants to level up.
ISG: As a social game developer, you’re competing with Zynga and everyone else. But who do you see as your competitors in the publishing and cross-promotion parts of the ecosystem — would you consider 6 Waves a competitor, for example?
LM: We think of publishing in a very different way from 6 Waves. We only want to be supporting 4 to 7 titles at a time as a company. This includes our owned and operated games. Think of us publishing a game as one of our main shots on goal for the quarter — we’d just take on 1-2 per quarter. It’d be targeted, opportunistic and because we love the game and fits in to portfolio.
For the brand ad network, it’s separate from our publishing operations. But just as we’d be incredibly targeted and focused on a game we might publish, we’d also be that way about who we sell brand ads for.
ISG: You also have RockYou Asia, and co-founder Jia Shen is heading it up — how is that organization fitting in with everything else you’re doing?
LM: RockYou Asia is majority owned subsidiary. We launched it a couple years ago. We’re excited about what Jia is working on. RockYou Asia is focused on mobile, particularly in Japan but Asia more broadly as well. Jia and his team are a main part of RY family. He and I connect regularly as to what’s going on, although they’re independent. We have supported it with funding, coordinating around image, marketing, and brand presence.
There’s a fair amount of cross-pollination, but we’re much more Facebook focused, while they’re much more mobile.
We’re looking forward to next the few months, as he gets more launches under his belt, and as he and the rest of us learn more about what works in Asia.
ISG: How are you looking at mobile within the main RockYou business?
LM: We don’t think social gaming is defined just as Facebook any longer. For anyone, mobile needs to be part of the business. I think that within 12 to 18 months, there’ll be one or two more venues — platforms that we can be on as well.
During Q2 we will flesh out our mobile strategy, but honestly, my number one goal is to continue growing and expanding our Facebook presence. We’ve done a lot in last 60 days in terms of rising through rankings. On the MAU side, before we were 14 or 18. We’re number seven in MAU and are about 4 million away from the number four spot on game launches.
ISG: Circling back to your RockYou’s nearer term social gaming plans, what are you seeing in the industry now.
LM: Production quality on Facebook games is going to keep going up in the next 12 to 18 months. There are new demographics, more hardcore gamers coming on. We’re still bullish on the platform.
In terms of current games, although costs have gone up for CPI over the last few months, we’re buying profitably on Gourmet Ranch.
We’re also moving on to Facebook Credits. For us, Credits have been neutral or a net positive on Gourmet. The demand that Facebook has talked about for awhile is starting to play itself out. At the end of the day, you have to have good games in order to positively arbitrage. Otherwise you won’t make it.
You need to have a mix of cash, cross-selling, and a good game.