K-factor and the new Madison Avenue

A few weeks back while indulging in an episode of Mad Men (AMC’s series about Madison Avenue advertisers in the 1960′s) I started to wonder how the advertising theory born there relates to game theory as is now being born in the labs and bedrooms of game and app designers around the world.  On a blustery August night at the Art Institute of California, San Francisco, I got at least one answer from a trusted industry source at “How to Grow your Online Games for massive player engagement and revenue” hosted by Sana Choudary and Japheth Dillman.

Maximize your K-factor

Josh Rose Co-founder and CEO of Flying Wisdom Studios spoke for 30 minutes, outlining his theory of social gaming, viral infection, and the K-factor.  He turned a complex concept into four viral metrics and eight feedback loops that he claims drive the K-factor (contagion rate) that games and apps use to attract and keep players.  The implications that these viral metrics and feedback loops can have for public purpose games and applications are enormous.

Rose took the podium with the confidence of a long time game player and game designer who has his share of success with the game console and in the field, but with none of the pomp that Mad Men Don Draper would have in the same situation.  Having began his professional life in biochemistry, it was no surprise that he started with viral penetration and the “K-factor”.  Application or game penetration rates are measured the same way biological viral infection rates are.  So that if your K-factor equals 1, then you ‘infect’ one new player before you stop being infectious, either through death (not signing back in) or not being contagious (not inviting your friends).  With this formula, game designers want K factors above 1, far above 1.

In order to get there, Josh Rose believes the game needs to have a variety of rewards that turn each activity within the application into an action that fuels one of four viral metrics.  You must also be able to measure each of the four listed below.

Make it Viral: What to Measure

• What are the number of vectors? This is your player base.  It’s basically the number of players that you are starting with. “Welcome to your new universe, have look around.”
• How contagious are your vectors? These are the number of opportunities your players have to connect with and infect new players.  “If you invite 10 friends, you get the blue chip.  If you invite 100 friends you get the red chip.”
• What is the duration of infection? This could be seen as time online, or time playing the game. “Plant this tree and watch it grow, make sure you come back to water it every day.”
• How does a player get reinfected? Once a player initiates play and infects others, they still need to return to the game and get reinfected themselves.  “Your friend Pat just accepted your request, thank her.”

Drive Gaming

So what are the 8 feedback loops that drive social casual gaming?  From the Draper’s Madison Avenue of we learn, “Advertising [gaming] is based on one thing, happiness. And you know what happiness is? Happiness is the smell of a new car. It’s freedom from fear. It’s a billboard on the side of the road that screams reassurance that whatever you are doing is okay. You’re are okay. “  According to Rose, yes there is the “You’re okay”assurance factor in games like Farmville and Cow Clicker.  The games make the world appear ordered and understandable.  In gaming there is also the challenge reward–when you achieve something you previously did not think you could. This accomplishment sends a “nice, warm” feeling through you that brings you back to the game.  There are 3 factors that create this sense of assurance or reward.  Each of which can be either fixed or variable in their delivery, so that in their permutations of 2 x 2 x 2 they become the 8 feedback loops that drive the four metrics.

• Payout This is the payback for taking any action within the game.  When fixed it is always the same, like when you get ten points for getting a friend to join. When variable the payback changes depending on random or pre-determined factors.  (I think I recall from psych 101 that variable payback is was found more effective by Pavlov and others… anyone?)
• Interval The interval is how often you can take an action.  Some plants take longer to grow than others, or you may be able to invite a set number of friends per day, or have to wait for your mojo to recharge before shooting your next round.  Intervals may be fixed or variable.
• Investment Investment is how much effort it takes to act.  In the case of Second Life the investment may be significant, whereas with Cow Clicker, you are one click away from completing your action and getting satisfaction.  Again, fixed or variable.

So in using the 8 permutations, let’s describe one possibility.  Variable payout, fixed interval, and fixed investment. In this case, a quarter slot fits the bill.  You have no idea what the payout will be, you can play as often as you want and always know what your investment will be per play.  Pretty successful.

It is still a marvel to watch ourselves, whether responding to the new ‘must have’ in our consumer lives, or the ‘must achieve’ from our gaming lives, even when we know how it works from Madison Avenue to Virtual Boulevard.  For now, the fun part is to use these metrics and feedback loops both for entertainment and to drive positive change.

Post Script: Interesting links encountered during the writing of this article.

12 Quotes from Mad Men (Slideshow)

Social gaming rakes in revenue (Adweek report)

Another take on the metrics (Social Times)