Report: Zynga building ad platform to attract third-party developers

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Zynga (NASDAQ:ZNGA) is developing its own advertising platform in an effort to boost revenues but also to enhance the social gaming network's appeal to third-party developer partners, All Things D reports.

Cadir Lee

Zynga CTO Lee

Citing multiple sources familiar with Zynga's plans, the report states the firm is still developing the ad platform, which will span its mobile properties and its Facebook (NASDAQ:FB) titles. Zynga--which generated $41 million in advertising revenue during the second quarter--will leverage the platform to expand beyond brand integrations and sponsorships, offering promotional capabilities like banner ads, interstitials, video pre-rolls and incentivized downloads. Some components could launch by the end of this year, although full-scale services likely will not be available to third-party partners until a later date.

Zynga CTO Cadir Lee is rumored to spearhead the ad platform--in April, the company hired Electronic Arts alum Julie Shumaker as vice president of global ad sales, and has subsequently staffed other direct ad sales positions, with several more job listings posted on its Website. A Zynga spokesperson declined to comment.

Sources say Zynga will look to advertising to bolster its Zynga Partners for Mobile program, introduced this summer. The program enables third-party gaming firms of all sizes to leverage Zynga's monetization, distribution and player engagement services. Titles created under the auspices of Zynga Partners for Mobile include Atari's Super Bunny Breakout, developed by startup Curious Brain and launched earlier this month. In addition to Atari, partners include Crash Lab, Fat Pebble, Phosphor Games Studio and Sava Transmedia.

Sources add that Zynga is also seeking to halt its reliance on existing ad networks, enabling the company to retain a larger share of revenues. Zynga additionally wishes to retain its own customer data: More than 300 million monthly active users access its titles, giving the company enormous insight into their behaviors and social interactions.

Zynga will report final results for the third quarter on Wednesday. Earlier this month, the firm lowered its estimated annual bookings to $1.09 billion to $1.1 billion, down from the previous forecast of $1.15 billion to $1.225 billion. In addition, Zynga anticipates third quarter revenues between $250 million and $255 million, down from its previous expectations of $300 million to $305 million.

Zynga's third-quarter results also will include a write-down of $85 million to $95 million of mobile gaming firm OMGPOP, creator of Draw Something. Zynga purchased OMGPOP for about $180 million in March 2012.

For more:
- read this All Things D article

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