How to position our gaming startup?

I'm Tom, one of the co-founders of oQuizo.com - a multiplayer trivia game.

We opened the business two weeks ago in open beta. What we find difficult is to how to position our site. It seems our 1st approach wasn't optimal. On one hand we offer games with cash prizes, which may give, and sometimes gives us 'gambling' label (from the legal standpoint we are skill gaming, not gambling).

On the other hand we have to get a critical mass and be as open and as 'for free' as possible so we offer free games as well.

It boils down to a question - should we position oQuizo as a 'trivia fun site' and work hard on encouraging players to play for money OR position it as a 'trivia for money, earn on your brains' site with much smaller initial audience but higher conversion rates?

I'd really appreciate your POV.

Cheers and have a perfect weekend!

Tom

Tom,

Short answer:

I'd recommend testing both positioning options and analyzing the results in terms of customer acquisition costs, activity levels and market segment size and ability to reach.

Long answer:

I ran marketing for a company that was essentially fantasy sports betting with no cost to members to sign up and cash prizes for games and tournaments. We had a pretty similar challenge with positioning. Are we targeting fantasy sports players? Sports bettors? Sports fanatics? And how do we position for each of those segments? Do we focus on the game aspect, the community aspects, the money prize aspect?

A key part of figuring out the answer was creating an SEM campaign with ad groups and keywords that targeted each segment and used positioning with the various elements of what we provided per above - game, compete and win prizes, community, etc. So we had sports betting terms with sports betting type creative that focused on winning money, another with fantasy sports keywords and creative all about competing and beating others and then a third with keywords and creative targeted at more general sports fans focused more on our community aspects. Each had a related landing page. We spent very little on this.

Then we measured the cost of customer acquisition for each of the three segments based on SEM keyword cost, conversion rates, etc. But importantly we tracked each member in terms of which segment they came from and then did analysis on their activity once they joined. We wanted active members. People who signed up and did nothing were of little value other than it made a little nicer membership number to tout to investors and the press. But active members would drive pageviews, ad impressions, viral spread, etc.

There were pretty dramatic differences when we'd look at customer acquisition costs for a member vs. acquisition costs for an active member. One segment could be cheap and great conversions for members but be higher than the rest for active members.

Then we'd work back from that in terms of the size of each of those market segments - how many fantasy sports players, how many sports bettors, how many sports fanatics visiting sports sites like ESPN.com. We'd build forecasts and financial models based on those sizes and based on other ways to reach those segments. For one sports fantasy site we got them to offer us as another type of game on their site - hugely successful for us. We searched out potential partner sites that we thought had members with similar demographics and psychographics as our members. So for example, through our Google Analytics I saw a site that was essentially fantasy poker was driving a lot of people to our site. I contacted them and we created a great partnership that ended up driving 17% of our members with very little cost. It was mostly bartering of services and expertise.

Long answer, hope that helps.

Best luck,
Chris