Zynga pulls Facebook ads

Zynga pulls Facebook ads
Will Freeman

By Will Freeman

November 10th 2009 at 10:58AM

FishVille suspended as Mafia Wars developer faces flack

In the latest chapter in something of a scandal for developer Zynga, the company has pulled all its performance-based advertising from Facebook. The news comes in the wake of the firm behind the extraordinarily popular socially networked games Mafia Wars and FarmVille facing criticism for running 'commercial offers' that give users virtual currency in return for subscribing to deals with various companies.

As reported by Gamasutra, which suggests that such offers can be more costly to subscribers than they first appear, zynga's newly released game FishVille was rejected by Facebook after just two days live, apparently due to a mobile deal that could potentially confuse users – something in direct contravention of Facebook's terms and conditions.

The events at Zynga have a convoluted history. According to Tech Crunch, Zynga's co-founder Andrew Taylor revealed that the company makes about a third of its revenue from hosting promotional offers of the kind Facebook seem to have objected to. Another third comes from selling virtual goods, and another from in-game ads.

The information seems to have come from a San Francisco Chonicle article – a piece of editorial now marked as 'corrected' in its online incarnation. The amended Chronicle piece reads: "the company makes almost half of its revenue from virtual goods transactions. The rest comes from advertising and companies that provide commercial offers, trading Netflix memberships and marketing surveys for in-game cash."

However, in an email to VentureBeat Zynga CEO Mark Pincus has claimed that the lead generation offers in fact make up just 20 per cent of the company's revenues. Pincus has also claimed in his personal blog that the controversial mobile ads afflict just 10 per cent of page views.

Despite the apparent value of these offers to Zynga, the studio had claimed that it would remove all of the offending mobile ads from its offers. The developer now claims that a technical problem is behind the offer's reappearence.

"i want to be clear that zynga had no control over the pages being shown and never filtered them from michael or anyone's view," insisted Pincus.

In an earlier blog post, Pincus stated: "The offer industry is still just getting started and this category of advertising makes up a small minority of our revenue, the bulk of which comes from users directly purchasing virtual goods.

"We have worked hard to police and remove bad offers. In fact, the worst offender, tatto media, referenced in the techcrunch article, had already been taken down and permanently banned prior to the post. Nevertheless, we need to be more aggressive and have revised our service level agreements with these providers requiring them to filter and police offers prior to posting on their networks. We have also removed all mobile ads until we see any that offer clear user value."

Despite enjoying just two-days of public availability, FishVille attracted over 875,000 users.