Episode 3 - Monetizing Gaming with Mark Power
We are joined by Mark Power, founder of gaming and live commerce agency LiveCraft and CEO of Amazon agency Podean, to discuss how brands can use gamification to reach global consumers. As the world of gaming grows significantly, we discuss our predictions for 2021, the evolution of gaming campaigns, and how brands can look at this progressive channel to build customer relationships.
Shane Madden: Hey, guys. Thanks a million for joining us today. We're super excited to have our guest speaker Mark Power on today. Mark has been a friend, a mentor, a client, a partner, and lots of different roles for many different companies over the years. And I've had the pleasure of spending some time with Mark on and off the field. Probably most memorable is our few days in the Cannes Lions festival in the South of France last year. He's an amazing guy, so we're thrilled to have him on the podcast. So Mark, what's up, man? How are things going?
Mark Power: Oh, thank you very much, Shane and Whit, for having me. Things are good. 2020 has thrown a lot at folks. It's been quite a tough year for many, but, in the space that I, myself and my company work in, it's been quite a year for us just because we work across e-commerce and now in the world of live marketing e-sports and gaming, and all of those areas are just absolutely accelerating since COVID kicked off. So it's been a busy year, but one which comes with some mixed blessings for us. So looking forward to exploring this further with you today.
Shane Madden: Yeah. Amazing mate. Thanks again for joining us, it's much appreciated. I guess before we get started, do you want to give us the skinny on who you are, what your company is doing? We'd love to kind of learn more.
Mark Power: Yeah, sure. So I'm a 25-year digital veteran who got stuck in there, back in the late nineties, ended up in London. I'm Australian originally and as a young marketing professional, I grew my career in the digital space. Fast forward and I am now the founder and CEO of an agency called Podean. We're a global Amazon agency and marketplace consultancy. We help brands around the world leverage all that's happening in the Amazon ecosystem and the world of marketplaces. But that's also why we've now launched recently a live marketing agency called LiveCraft, and it is helping brands immerse in this very exciting space of gaming and live commerce, which we're very excited with. We've got some great campaigns and great brands that we're helping in that space right now, but we're trying to help brands connect with this generation live, which we see as a big opportunity. But a lot of brands are still struggling with other channels and it's hard for them to get to grips with what the opportunities are. So we're trying to help many clients understand the opportunities and then activating in those in the new area of life.
Shane Madden: Yeah. So given the topic or the theme of this episode is about monetizing gaming, I'd be super interested to hear your thoughts in terms of the gaming economic models, what the future holds for this space, what you guys are seeing. You've just touched on something that I think is interesting, which is you're trying to be the conduit or the nexus point between this new Gen Z and other generations and brands. So how are you creating that experience for your customers? That's a pretty loaded question. I'm sorry, but it's definitely an important topic.
Mark Power: Well, I think everyone's talking about this world of gaming and we believe that gaming and what's been happening in the gaming space for the last 10 years is actually the foundation of this world of live marketing that we now know. And it is still evolving, but at its roots is the gaming space. And just to give you some context, the gaming area or the gaming industry is currently a $140 billion industry. And I think it's going to be even more this year, that might be a 2019 number. So you can just imagine what 2020 is going to be like. But that's like six, seven times bigger than the music industry and almost three or four times bigger than the movie industry. Gaming is ingrained in society. So you've got, I think 60% of adults currently engaged in gaming, whether it be mobile, whether it be PC, or whether it be through a console, like an X-Box or a PlayStation or something like that. That's a huge amount of the population engaged.
And then you've got platforms, what we call distribution platforms like Twitch, and now you've got YouTube and others that are distributing the content generated by people who are playing games and people who want to watch people playing games and immerse themselves in this space. So it's not a fringe thing anymore. It's not something where it's like, oh, there's the gamers over there, let's go and touch them. Gaming is ingrained in society right now and will continue to grow. So we see gaming as really the foundational sort of part of this live space. But now what we're seeing is gaming, what they've built is these big communities, for example, Twitch, which is a gaming monetization platform and distribution platform, it's now moving into sport, it's moving into music, it's moving into entertainment, it's moving into wider things than just gaming. So we think that this is an incredibly exciting opportunity, but very few brands know how to activate in this area. And some think that it's an advertising play or something that's just a sponsorship play. It's way more than that. So for brands that have open minds that are ready to take some risks, there's a really big opportunity there, but it's not just gaming, but gaming is a foundation of what it is.
Shane Madden: Yeah. And I guess it's one of those spaces where sorta like the sports or extreme sports community, you've got a really re-engaged consumer segment that is dialed up into this kind of gaming platforms. So you mentioned that. I think actually the market size in 2020 is estimated to be $160 billion. So it's one of those spaces and $60 billion is in the US ,right. So it's one of those spaces that I think is just so interesting. And I guess, Whit, given your experience in the streaming sector with NBC Peacock, I think $160 billion is probably bigger than the traditional media segment globally as well. So what do you think of this as an industry where this is a sector?
Whit Harwood: Well, I think when Mark dropped that figure, it is really easy to just kind of have your jaw hit the floor because most of us, and this is coming from a guy who grew up gaming actively, still think of it as a fringe thing. I can still remember when I was in grade school and this one kid made a prediction that one day there would be more audiences watching games than NFL games and we all laughed. And now we're actually at a point where not only is gaming driving its own business unto itself, that $140 billion, $160 billion figure, but it's also driving innovation from the live streaming perspective. And we're seeing it actually carry the torch for what really hasn't been innovated on in the last 15, 20, 40 years. I mean, consuming an NFL game in the US is predominantly the exact same as it was in 1972. And you turn on your TV, you go to a broadcast network ,and you sit back on your couch for three, three and a half hours.
Mark Power: It's passive. And you're fed information versus being an active participant. And that's what these new platforms are allowing you to do; both the gaming platforms themselves, but also the distribution platforms.
Whit Harwood: Yeah. And the trajectory of this is the innovator's dilemma. There are enough people who have been watching games this way for so long. And this extends far outside the sports realm too, as you know, AOC was on Twitch in the last couple of months. This is in pop culture now in a way that I think there's no real way of coming back from. And so the way that gaming is just driving the media and tech areas forward, I think there's no putting the genie back in the bottle.
Shane Madden: Mark, I've got a question for you. So given the market size of this thing, so $160 billion globally, you've obviously set up a gaming kind of consultancy firm or rather a company to help brands optimize this things. Do you think brands have a good handle on this? Or do you think there's... there's clearly room for growth, but do you have any examples of brands that have done a good job in this space? Do you have any clients or any stories that you can share with us?
Mark Power: Firstly, I don't think many brands have a good grip in this space. They usually say, hey, we want to do something in gaming. And they brief their creative agency where very few of them understand the dynamic of this space because there's a lot of moving pieces. The thing is, when you're in marketing or a CMO, you're stuck in this world of line items and you've got a line item for brand advertising. You've got a line item for digital, you've got media, you've got all these line items. Where does gaming sit in there? It can be a performance channel. It can be a brand channel. It can be an e-commerce channel. It can also be experiential and something that could be taking innovation dollars. But it's just sitting in this no man's land of where's the bucket of money to invest, and you need a very forward-thinking CMO or forward-thinking brand.
And that's why you've got the likes of Chipotle, who has some great activations happening in this space to engage with the community. You don't advertise. You don't just sponsor. You have to really be coming up with really interesting ideas and programs connecting with content creation, content creators, and influencers. And these programs can be quite complex and there's a lot of moving pieces. So the complexity is one, and things might get a little bit smoother in the future, but at the moment everyone's still finding their way. And the other thing is a lot of brands are sort of scared of this live space. They're scared of the brand safety concerns. Oh, what if something goes wrong?
There's a lot of measures you can put in place, but yeah, in a live environment, live TV, live sports, there's always something that can go wrong, but a lot of brands just don't have that risk mentality because they're sort of stuck in their last year's line items way. And what we saw in the mobile evolution and Shane, you were there for some of that with me, what we saw with that is brands weren't evolving quickly because mobile wasn't a line item. So where does live and gaming sit? So I think that brands that are progressive are going to start moving into the space, but some will be left behind because they’re just stuck in their traditional way.
Whit Harwood: But Mark, couldn't you make the argument that live actually is one of the ways... in this world of spots and dots, everybody's become a little bit immune to the advertising that's around them. And VOD anything, pictures, video, what have you, has become commoditized; couldn't you argue that live is just objectively the next frontier in which you can kind of capture time and attention?
Mark Power: You nailed it there. I truly believe it. It's interesting that it's still such a new space. I even thought this morning when I was preparing for this, I'm like, hang on, at the moment why isn't Netflix making a much bigger plan in this space? We've had hundreds, potentially hundreds of millions of subscribers. I was watching with my children the other day a Bear Grylls interactive show where they got to choose what Bear Grylls did in this whole show. It was very basic. It was very easy for them to use, but what about the world of live? Why can't Netflix broadcast live things and create much more interactivity? Amazon's in a great place to do this, too, as are some others. Though I see the world of gaming and the world of this video on demand and this world of live streaming, all sort of coming together at some point and reshaping the marketing industry. That's what we see.
Shane Madden: So with all this shift and change, and I guess it’s just a paradigm, a paradigm change in what we're seeing. What do you think is going to happen with the traditional content producers? Like the EA sports or the Activision Blizzards? Do you think there's a place for them in this market, or what do you think?
Mark Power: Yeah, I do. I think that they're traditional publishers who make incredible games, but they're sort of stuck with distribution partners. The distribution partners are Sony, who has its own challenges because there's a lot of innovation happening in the space. You've got Microsoft, who's formidable, that has Xbox, then you've got Amazon that owns Twitch, which is the distribution platform garnering a lot of popularity. I just see some of the traditional publishers with great content still stuck in a traditional monetization of that content versus the modern Epic Games, for example, and some of the new games companies that are getting huge amounts of growth, not just through consoles but mainly through mobile, cross-platform huge amounts of growth in weeks for Fortnite. And then they're not just giving away these games, but they're making billions of dollars with content in the game plus brand partnerships. And they've built these platforms like Epic's Unreal Engine, which is one of the assets created by the founder of Epic Games, and now they're pairing not just games, but movies and all sorts of experiences. And they’re in a much better place to monetize everything than the traditional publishers. Although the traditional publishers may be able to catch up, it's going to take some serious investment.
Shane Madden: When we were prepping for this session, one of the interesting stats I came across, just to kind of accentuate your point is, so if we take Roblox they have 31 million monthly active users. Of that, 7 million, so 25% of those users have made, created, published at least one game. So of their consumer base, they've got a quarter of those producing content. So I don't know, if you're a traditional producer or a publisher, I don't know how you compete against that. That in and of itself is the development of an ecosystem. And yeah, I would probably be a little bit concerned about that if I was a competitor.
Mark Power: Yeah. And the scale is nuts. We're helping at the moment, back to Fortnite, we're creating unique experiences for our clients within the game for them to bring in influencers and content creators, for them to bring in their brand ambassadors, and for them to bring in potentially the press and other important people in their world to launch a new product or to feedback on an initiative or to launch it in there. So that's incredible. We're not going to the Bahamas to do something now. That's the re-brief we got: we can't go to the Bahamas, can we do something in game? That's what we're getting from progressive marketers. And it's quite incredible what you can achieve. Ultimately, the platforms will make money. The content creators will make money. And the brand themselves will drive new sales from an audience that has been hard to get, which is this younger, soon-to-be affluent audience, growing up in these experiences, playing in a digital experience, meeting people, hanging out with people in a digital world is what they do. And my son, who's seven years old playing the games like Roblox. This is what they do to socialize. So how do brands equip for that future? Well, you have to be looking at it now and prepare for what's to come.
Shane Madden: Yeah. Right on. I guess, I don't want to bring the tone down, but you mentioned Epic. They're certainly right in the spotlight at the moment with their back and forth with Apple over the commission on the rails. So I think the issue there is that Apple is charging Epic and other games, content producers 30% commission. Do you have any thoughts on that? Do you see any kind of outcome and in terms of the content producers like Epic and that respect?
Mark Power: Look, I sort of get both parties' point of view, I always try to look at both parties' points of view. It's one of my life things, but, look, I see why Epic would be upset, but look at the infrastructure and the user base Apple has created, and the same would be with Google. The same would be with other major tech players. To do business on their platforms, there's a cost, and you know that cost and you know what's at stake. I see Epic's point of view as, oh, this is a lot, we're paying too much and hey, yeah, it'd be good to go and renegotiate, but the way they've done that is quite an aggressive move. I think only Epic probably has enough confidence to be able to do something like that because it's such a big player.
But to be honest, they're very respectful of the amount of investment that Apple has put into building its user base, its products, and everything there. And the same goes with others and, and to play in these walled gardens, Google, Apple, Facebook, and Amazon, it comes at a cost. And if you know what that cost is, you know what the entry price is, and you've got to deal with that. So I sort of see both parties, but what the outcome will be I'm not sure. It's annoying at the moment because you can't download this if you're new to the game or what have you, but there has to be an outcome at some point, but I wouldn't want to be in that courtroom either way.
Whit Hardwood: Something you said before is, you have your seven-year-old son, he's meeting people on this platform, he's developing relationships, and he's obviously learning how to live and breathe in this space. What are some of the impacts that you think around social currency are going to come out of this because you alluded to it a little while ago too, but the sense of ownership in this space is really interesting when people start favoring or at least valuing digital goods and services that are transacted on top of these platforms, these are truly worlds. Do you have any sense about how brands could create value for members of these gaming communities and what kind of services or products that could be included in these spaces?
Mark Power: Yeah, I think for me, marketing is usually a value exchange, right? And I think that brands that are thinking, not just, let's go sponsor something or advertise something, but what's the value we bring. At the moment, a brand can partner with a content creator and that content creator can then give that brand attention and exposure through its community in a genuine, authentic way. And in return, they will ask their community to support that brand. And it's very transparent at the moment in places like Twitch, and distributed by YouTube, Instagram, and the like, but it's a very transparent thing.
I think it's going to evolve into: we're a brand, and we're going to give you something just like ad-supported models like some of the big media companies are pursuing is, we're going to give you something and in return, we'd like your eyeballs or your attention for a little bit. So would that be a skin in Fortnite? Would that be some form of digital currency for you to go and spend? I mean, this is sort of already happening, but I think there's going to be more types of value exchange. And it could be access to the next game and release, or we're going to open the door to this experience in this digital world. I think, though, Whit, and we touched on this the other day is where the digital can then be converted into the physical. So, we give you access to this, do you like it? Oh, here's a coupon code. You're now going to get special access to this special product. And it's going to be delivered to you tomorrow in a physical format, even though you'd be wearing those shoes, wearing that shirt, wearing those glasses in Fortnite, it's going to be delivered to you tomorrow, or this afternoon, if we're using Amazon Prime Now. That's pretty powerful stuff.
And I think this digital to physical is where marketers start thinking, what does that look like for their products? We work with a big beauty brand and we're immersing them with a content creator who has several million followers. And now that content creator is empowering young women in this gaming community with makeup tutorials and things. And now this is a traditional gamer, who's now partnering with the beauty brand, but what does that look like? She has a cosmetic in Fortnite. Now that cosmetic is very colorful, but now she's trying to say, hey, look, you know, here are some colors that could make you look like my skin in Fortnite. So what does that look like in the world of beauty or apparel or even automotive? We're working on a very exciting project to launch a car in this type of environment. What does that look like? We're very excited about what the future might hold, but I don't think that you're just going to give away cars left, right, and center in return for eyeballs, but there's definitely going to be experiences and some form of value exchange and they'll continue to evolve. But I think that brands yet still have a long way to go to get their head around it.
Whit Harwood: Well, it's interesting because the way you describe it, to me it evokes the concept of this being the new mall. Except if you were almost incentivized to go to the mall. It's this place where you have a wealth of brands, you have a wealth of different places where you can buy different products, but also meet with your friends. And you know, what you're almost describing to me almost gives me ancillary FOMO; I'm not on these platforms right now, what am I missing? What other exchange of goods and services should I have? And I think to touch back on something that you talked about a little while ago, too, there's data collection in this space that's going to dictate personalization. And when this starts becoming this kind of a world into itself that's personalized for you and is also yielding physical products, I think that convergence of this, and people have alluded to it as the metaverse or mixed reality, is something that's going to be extremely powerful because you're going to see and have tangible, just basically products that you are getting from being in this space.
Mark Power: Yeah. Well, if we look at the online shopping experience at the moment, going back to your shopping mall, I'm old enough to remember a thing called Second Life. I don't know if some people who are listening might remember but back in the 2000s, they were these virtual reality worlds, where people could have an avatar and wander around. And it was just so well ahead of its time. And it was one of those things where it wasn't mobile, it was desktop. It was back in the early 2000s. Imagine if that launched a mobile, that could be huge right now, but we didn't even have broadband properly distributed in those days. But this evolution of the physical experience or the physical shopping experience... kids don't go to shopping malls to hang out anymore. That's what I did when I was growing up.
My kid is going into Roblox, soon he'll be into Fortnite, and he's hanging with his friends. What does digital shopping look like in the future? What does shopping look like in the future? Will they go into a shop and in exchange for some money currency for doing things in that game that will give them special access and see products and conduct commerce in a way that we've never seen before? I think that's where it's going. In fact, I know that's where it's going. I just see some very different consumer behaviors on the way. And, you know, if you don't get your head around that, you're going to be left out because no one's going to be watching linear TV. I do think our door's gonna evolve and be a little bit more connected and connected to commerce. But at the moment, this digital world is going to continue to be a place that brands will need to conduct commerce, not just be seeking attention.
Shane Madden: Mark, if I was to ask you to just take your crystal ball out and give a prediction as to where or when do you think gaming will be the next mobile? So when you and I first worked together, probably, what 2014, that was when mobile was starting to kind of grow legs.
Mark Power: Mobile was becoming a discipline that brands needed to really get their head around. And it was still 2016 where they were all going, I'm not sure...we do Facebook advertising, that's our mobile strategy. So, even though we all had phones and there were definitely great companies out there doing great stuff, but generally big brands that can't move as fast weren't getting it. So I think in 2021, there'll be a lot of content coming out. There'll be a lot of brands doing unique things. We've got some really cool campaigns, what we'd call immersions, coming up in this space. But I think they're going to be for the progressive brands for the next one to two years. And then there'll be a wake-up call by 2023 where it's, oh gosh, we've been left out of this, hurry, hurry up. And we even saw that with the e-commerce guys. I wrote a book last year called Amazon for CMOs. And up until February, this year, senior folks at brands were like, we don't need to partner with Amazon because we don't think it's really relevant to what we're doing. Now every brand has to find a way to partner with Amazon because it's where the people are gravitating to conduct commerce as they are with other D to C and marketplaces. So I think that I'm always for innovating and going and testing and learning, and I think the winners will be made in the next year or so.
Shane Madden: Do you think that there's potential for, not just a Twitch, but do you think there's potential for a gaming-like marketplace? Whereby people and, I know what you're talking about is, so you're in a game it's a very immersive experience, and then there's a call to action, which you can potentially buy a product that gets delivered through Amazon Prime, but do you think there's potential for some sort of a marketplace for gaming where they kind of marry the two versus one on top of the other?
Mark Power: I'll go wilder than that, mate. If you want wild, I actually think that there is going to be the ability for us to monetize ourselves in the digital world. So not just a billboard or a room or a concert that Travis Scott does, and whoever's sponsoring that. I think that I'll be able to come up to you and you'll say, these are the brands that I care about. And we can do that in a digital world, and we may even do that in a physical world one day, but I do believe that I'll be able to say these are the brands I love, and then, just like I used to walk down the street saying, look at these new Nikes and look at my new Polo shirt when I was a kid, I'll be doing that in a digital environment. Cause I'll be able to choose the brands that I will wear and be part of, not just in apparel. It might be in other areas as well, brands that I want to be associated with, which I think is a really interesting space. I think that's going to come at some point, but it's a couple of years away.
Shane Madden: Whit and I've actually spoken about this a lot. Elon Musk touches on this quite a bit as well. I guess it's the digitized self, and then the real self, the in-person self. It's the marriage between the two and then brands. How have they been able to fit into that? So, yeah, I think that's super interesting.
Mark Power: We're already seeing the fact that your physical self sometimes in the social world is very different from the self you portray everyone. In the world of influencers, you see them in real life, and then you go, well, hang on, that's very different. So I think your digital expression could be whoever you want it to be and whatever it should look like. I'm a little bit more true to myself. I'm happy to show the gray hair and sunspots. But I think some folks are gonna want to be able to portray themselves. I think that's an interesting space that's going to develop is, is how do I get portrayed in cross-platform environments. Not just Epic. Can I take my avatar and Epic...this is called portability—and it's something we can't do in the world of social that they want to solve, but I doubt it will be solved—what's my portability across the board of gaming in these digital worlds. Can I be portable across an Epic Games through to an EA Sports game through to something else. That's an interesting thing that I think may need to be evolved at some point, but it's a while off.
Shane Madden: So I've got a question for you. My last question, and it's not related to gaming. Mark used to live in New York city with his wife and kids, and I guess was there for 8, 9, 10 years. When COVID hit he decided to move to Newport in California. So quite a shift of lifestyle and my question I guess Mark is, do you make that move with your family across the country if it's not for COVID?
Mark Power: I was always going to make this move. COVID was an accelerator, but I tell you what, my son still, even though we're in sunshine here, and it's 72 degrees, he's still playing Roblox today, even though I wish he wouldn’t. He's gone to the park now, so I can get some peace and quiet, but, it's quite fascinating just how engaged kids and young adults are in this digital world. I'm not saying that I didn't play video games growing up, but it was very much a sub pastime, not really my lifestyle, and there's the digital lifestyle the younger generation is growing up with. I think that that is a very different sort of type of audience to what we're used to, which is, as we were talking about being passive, being fed messages. Then we brought in the addressability. Well soon, it's going to be, hey, I want to choose what I'm doing here because I'm in control. And I think that's going to be a very different way, and, forward-thinking marketers are going to start to understand that, but the traditional brands may really struggle.
Shane Madden: Yeah. Amazing. So Mark, to round us off, founder, CEO, former executive of one of the big holding companies, do you want to give our listeners a quick intro or reminder of what your book is, where they can find you on Twitter, LinkedIn, and...
Mark Power: Yeah, I'm on LinkedIn, Mark Power. You'll see. There's lots of content that my company produces around the world of commerce and Amazon. And then, I welcome anyone out there if they want to discuss the world of live marketing and what the opportunities are for their particular category, and how to really start exploring this space. And also build business cases. We do that for a lot of our clients to justify spending in this space, which is still an unknown. LiveCraft is our company that's doing really cool things in this space, but we welcome any discussions with folks who would at least are interested in understanding and learning more.
The book I wrote was Amazon for CMOs with Kiri Masters. Who's another Amazon thought leader. And it really is just a strategic view of Amazon and how brands should be treating it as as a strategic imperative and not just a sales channel.
Shane Madden: And how can people look at it?
Mark Power: They can get it on Amazon, of course. We're still at five stars; we are pretty proud of the work because it was well pre-COVID that we wrote this, but it's all still highly relevant. But it does give folks at all levels a good view of the importance of Amazon in today's current society.
Shane Madden: Amazing. All right, well, Mark, we appreciate your time. We'll let you get back to the surfboard over there in California while Whit and I figure out our New York, late night plans, but really appreciate your time. It's super interesting. This is a segment that Whit and I have been talking about for a while, cause it is top of mind. We both think there's going to be some interesting news in this, so really appreciate your insight. Thanks as always.
Mark Power: Thanks, guys. Appreciate it.