Since the company's games debuted on Shockwave.com in October 1999, its titles;especially Real Pool;have stayed on the top-five list of the site's most popular attractions, getting 3 million plays a month at an average of 12 minutes per play. In this age of Web surfer attention deficit disorder, 36 million minutes of eye time per month is unheard of. Groove now finds itself in the fortunate position of having some very valuable Internet ad real estate. And with an estimated 73.1 million Web gamers expected online by 2004, its niche may become even more desirable.
After starting by supplying games for Intel's WebOutfitter page to exhibit the Pentium III's power, Groove quickly brokered space on Shockwave.com, giving sponsor Intel double exposure. Soon after, Intel signed up another advertiser, Quokka Sports. With all these agreements falling into place, Kantrowitz soon realised he had a real commodity: addictive content with space for ads. "Part of the reason why click-through on banner ads is so low in games is that when you're playing a game, you're not looking at banner ads," Kantrowitz says. "We can put the advertising directly into the games themselves, and it's much more effective."
Jack Daniel Distillery is Groove's latest success story. In Real Pool, Jack Daniel's logos are featured prominently at the opening screen, directly on the pool table felt, and on a poster in the virtual pool hall in an attempt to, as Kantrowitz puts it, "burn it into the player's brain." Most recently, the company has been using its technology to tailor-make games for clients seeking to build brand awareness online, like one European car manufacturer that hired Groove to create a driving game using its cars.
While Jack Daniel's was unable to quantify the "brain burn," Shockwave.com's vice president of sales, David Steinberg, says content like 3D Groove's games has been an easy sell to advertisers. "These types of brand-building sponsorships are exactly what advertisers, especially of the big consumer brands, are looking for," he says. "You can't build a brand through a banner ad. But when you go to Jack Daniel's and talk about Real Pool getting played over a million times a month for an extended period of time, you have an incredibly compelling story to tell advertisers."
But compelling content isn't Groove's only selling point. The company also offers revenue cuts for clients using sponsored content. "We do a revenue share with sites that exhibit the content. We try to make everything we do a win-win," Kantrowitz says. "In a way, we're out there doing business development for our clients."
It won't be long before new rivals are hot on the trail. As Jupiter Research analyst Marissa Gluck explains, "Banners aren't performing, so advertisers are looking for new forms of advertising opportunities. We're seeing this second wave of new forms online, especially in . . . sponsored content." She warns, however, that the effectiveness of this new promotional content, especially games, is still unproven.
Regardless, Kantrowitz asserts that Groove Alliance has staying power. "I think this is going to be a very profitable business in the long term," he says. "The goal is to be a market leader, and not play the game of the dot-com. We want to be here after the flush-out."
