With the gaming space becoming ever more saturated and the battle for visibility on several digital storefronts intensifying, independent creative agency Waste has developed a remuneration model that provides games companies with the marketing they need in exchange for a share of long-term sales revenue. The Drum questions Visar Statovci, the agency’s co-founder and managing partner, about developing the model.
The product, called Upstart, has been created to bring in up-and-coming independent gaming clients. Revenue share, or work-for-equity, is a marketing remuneration model often employed in the world of startups. It appears to have applications in gaming too.
Indie companies, often SMEs, are often heavily restricted in their marketing expenditure and Waste’s model affords them a chance to pay it forward. The 15-year-old agency has taken gaming vernacular and called Upstart a ‘freemium’ model.
It is offering marketing experience, including strategy, creative ideation, content production, social media and community management, as well as advice on brand positioning and pricing. Meanwhile, in agency land, debate over the value of the fee-per-hour model continues – it is clear that billable hours don’t necessarily equal good work or incentivize fast work.
The agency’s co-founder and managing partner Visar Statovci says: “Value-based models are more suited to highly-specialized agencies that can take a calculated risk in guaranteeing outcomes and results in return for a different compensation structure. Apart from being outcome-focused, the more agencies take on the risk element, away from the client, the more they can command a premium.” In that spirit, clients are generally buying solutions to problems rather than hours, he adds.
Statovci says the agency doesn’t have a super-strict commercial model and can flex to client needs. But with Upstart there are a few rules to start with. “It’s on the agencies to create those solutions and have the ability to deliver outcomes versus hours. As a system, the fee-per-hour model is fundamentally flawed, but to move away from it requires a shift in mindset for both clients and agencies.”
But laying out a new model requires clear communication with gaming clients, some of whom might not have a full grasp of how marketing works.
Statovci explains: “We’re not publishers, so we only handle the marketing; we don’t require any IP as part of the deal, we believe indies should retain that; we don’t generally provide media spend – but can handle media planning and buying.”
The costs will vary on a case-by-case basis, but depending on how many features have been bought the revenue split can vary between 5%-20%.
Waste, which also works with AAA games brands including Supercell, Riot and Nintendo, is looking to diversify its revenue and unlock a new wave of clients who wouldn’t otherwise be available. One title has already embraced the model. French independent gaming studio RyseUp is driving sales of Roboquest.
Statovici says: “It’s been a great learning experience on the dynamics between agency and client in these types of deals, as well as on creative ownership, collaboration and the approach you need to take when the agency has ‘skin in the game’.”
Games marketing has gone through a “massive transformation” since the agency launched in 2006. Games were boxed, and most likely bought in a shop.
“Then along came digital distribution, social media and mobile games, which turned marketing from a function with a few channels to consider into a much more complex stack, with multiple challenges and opportunities.”
He adds: “This has put much more emphasis on the need for a coherent overarching marketing strategy that includes channel-specific approaches, especially in the case of community. On the mobile side, we’re going to see a big shift in the need for more long-term thinking and brand-building activity in light of a privacy push by Apple through IDFA.”
One of the most common challenges he faces is that developers start thinking about marketing their products too late. He says there are so few cases of “build it and they will come” in gaming.
The agency recently ranked at number 10 in The Drum’s World Creative Rankings of the UK’s most awarded agencies and last year picked up two Agency of the Year awards from The Drum.