Continued from Part 1, where I try to define terms and set out the basics of how the system works.
There are not enough quality advertisers willing to use the offer wall system for it to be truly profitable. In order for it to work, you have to let less scrupulous folks in. The sort that will surreptitiously sign users up to cellphone subscriptions (that’s where the REAL money is to be made in this), “trial” offers where you end up paying vast amounts in postage and packing for your free samples, or who sell personal details to spammers and other unsavoury entities.
The content provider will have a disclaimer stating that the offers are nothing to do with them, and are the responsibility of the offer broker. Should you point out that one or more offers is fraudulent, the content provider will gasp and be very shocked, but of course it is not their fault at all. They may even take steps to remove the offending offer, but it will be back with a different name before too long. Content providers are trading on the trust you have in them. Most likely you would not normally click on the sort of sites that the offers lead to, but many people trust the game maker to have their best interests at heart.
If the content provider worked with advertisers directly, they would not be able to abdicate responsibility for the quality of offers. This is the real utility of offer brokers for the content providers. They allow content providers to deny responsibility for any harm that comes to the users that trusted them.
Incidentally, when the offer brokers themselves are confronted with evidence of wrongdoing, they also respond with denials, and point to grand sounding codes of conduct. They rarely actually enforce these codes, because that would eat into profits, in the same way that Facebook mostly turns a blind eye to breaches of its own code. As the different brokers all endlessly repackage eachother’s deals, it’s a long game of pass the buck if you want to find out who is responsible for publishing any given scam.
I think this is why Turbine turned away, at the last, from its own offer wall. It is possible that they genuinely did not realise the sort of scams they would be opening their customers up to, though if that is true then they really did not do their homework. More importantly, unlike most social gaming companies, Turbine actually has a good reputation, and they will have viewed damage to that as an unacceptable cost. Zynga’s reputation for ethical behaviour is already in the mud, so they don’t care. As Zynga and Facebook are both part owned by Moscow based Digital Sky Technologies, Zynga probably don’t have to worry too much about Facebook making too much of a fuss about their behaviour, bar the occasional wrist-slap for appearance’s sake. Unfortunately, Zynga’s success has lead to emulation by many other companies, with even Raph Koster’s Metaplace using the offer wall system for their Island Life Facebook game.
The other problem with dealing with low quality advertisers is that they not only want to exploit the user, but they also want to pay as little as possible to the content providers. This is one very common sort of scam:
All well and good. So you fill in all these details requested, and hit OK.
Oh dear! It turns out that they didn’t have a survey for you after all. What a terrible shame. I guess you won’t be getting any points, and your content provider that sent you here won’t be getting paid either. Now they have your email address, and a whole caboodle of useful demographic information, and it didn’t cost them a penny. They could have told you that the survey was closed before you filled all that in, or not had it on the offer wall in the first place, but that would rather defeat the object of getting some lovely personal data for free.
The uncompleteable offer is a common trick. In many, once you think you’ve completed everything you need to, you’re then passed to another survey or form to fill in, and this continues until you give up, having spread your details to any number of individual companies. For each of those subsites you complete, the advertiser is being paid for lead generation. There are suspicions that even though the user won’t get their game tokens, some money may also still be passed to the offer broker. Otherwise, you would think that the offer broker would be firmer about preventing the scam, as it would be eating into their own profits. Of course, when the offer broker is also the advertiser this ceases to matter.
As offers are aware of your geographical location I don’t tend to see a lot of the cellphone ones, which are mostly targeted at the US, else I’d have used one of them for my example.TechCrunch wrote the definitive article on how many of these scams work, and has been instrumental in the fightback against them.
I’ll end with the story that first got me interested in what these companies are doing. Gamers were being offered reward points for writing a letter to Congress opposing US healthcare reform. While not necessarily fraudulent with regards to the user getting his points, it did raise a lot of ethical questions. Business Insider broke the original story. It was a sufficiently big deal that it made television news:
The healthcare scandal is what caused Zynga to stop using offer walls. For a couple of months, until it had all blown over, then it was back to business as usual.
It’s possible that content providers may not get off completely scot free though. Zynga have been named in a class action lawsuit for facilitating the mobile scam:
Kershaw, Cutter & Ratinoff has filed a landmark lawsuit against Zynga and Facebook arising from advertising scams and unauthorized charges imposed on users of Zynga games within the Facebook social network. The suit seeks compensation and injunctive relief for all users of Zynga games that have been victimized by unauthorized charges in connection with their use of Zynga games. Zynga’s most popular games on Facebook include:
* Mafia Wars
* Zynga Poker
Users of these social games may have been charged without their consent for “special offers” that result in unauthorized bank, credit card, or phone charges, sometimes through the use of phone text messages and auto-recurring SMS subscriptions. Many of these companies and advertisers making “special offers” then make it very difficult — or impossible — for users to get their money refunded.
What applies to Zynga in that lawsuit applies just as thoroughly to any of the smaller content providers who used the same system. If the lawsuit is successful in stripping companies of their fraudulently gained profits, it could have massive ramifications for the entire social gaming industry.
You know, if any gaming companies who did care about their customers and reputations really wanted to, I’m fairly sure they could join together and form their own little offer wall agency that really did only accept offers that play fair with users. It’s odd that nobody is doing that. Until they do, any game that uses offer walls will continue to stand on a foundation made of spam and fraud.