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- [00:03]
Jack
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- [00:35]
Ari Paparo
Welcome to marketecture, where you get smart fast with in depth interviews of leading technology executives. I'm Ari Paparo. I'm joined today by Nathan Lindbergh, who is the head of brand partnerships for a company called Overwolf in the in game space. I'm not very familiar with Overwolf, so I'm going to learn something as well today. So Nathan, thank you for being here.
- [00:51]
Nathan Lindbergh
Pleasure to be here, Ari. Thank you.
- [00:53]
Ari Paparo
What does Overwolf do?
- [00:54]
Nathan Lindbergh
Well, Overwolf likes to describe itself as a guild for in game creators. What that means is supporting projects in kind of UGC content, around 187,000 creators, over over 1500 video games and about 100 million monthly active users. And what we're trying to do as a platform is enable creators to build, distribute and monetize in game apps, mods and private game servers. So what does that mean? It means helping your favorite games be that much better. And to put it simply, we're in the business of empowering creativity and making the games the best they are through ugc.
- [01:23]
Ari Paparo
Okay, I didn't understand any of that, so we're going to make it simpler. So before we go into what the company actually does, how big is the company? Where's the base, how much has it taken?
- [01:31]
Nathan Lindbergh
Yeah. Overwolf is headquartered in Tel Aviv. We have a US team here that I handle and we've raised about $150 million to date through Jason Horowitz, Griffin Gaming partners, Insight partners and more.
- [01:40]
Ari Paparo
Wonderful. Okay, break it down to me like I'm really stupid. Let's start with the game developer. I'm a game studio. Game developer. Right. That's your customer, right?
- [01:48]
Nathan Lindbergh
Yeah. Well, I mean we, we cater to everybody in the space. But I think if the easy way for me to break it down for you is that if you are an avid gamer and you are playing popular game like World of Warcraft, League of Legends, Fortnite, and you want to enjoy your experience a little bit more, whether you're a high, the top 1% trying to be the elite esports athlete you want to be or you're just an everyday guy wanting to play and enjoy yourself and not be yelled at for messing up by a 10 year old. We have apps and solutions to help you enjoy that gaming experience. And so what those apps do is they overlay on top of your gaming experience. They give you real time information and help you kind of enjoy the experience just a little bit more.
- [02:24]
Ari Paparo
Okay, so these are like plugins. Let's start from the developer side. It's a lot easier for me to understand. I'm a developer, I want to make my game better. I don't care about the consumers. This is a B2B podcast. Okay, the consumer. So I'm a developer, I want to make my game better and you're giving me widgets and add ons to make it better. Is that the right way to think about it?
- [02:40]
Nathan Lindbergh
Yeah, I mean, I think at the end of the day, you have a certain number of time, effort and staff to put towards work. You got to keep the game going, you got to keep new content coming. How do you keep people playing longer and more, you know, engaged? Well, you do that by having third parties help you do that. And so what Overwolf's able to do is we have an app store on the PC platform that allows creators and gamers across the world to create apps to help them enjoy your game more. So you, as a game publisher or game developer don't need to do anything. You just have to allow the opportunities to exist. And then from there, users are able to find these apps, get them installed on their computer, and then they're all supported through an advertising model.
- [03:16]
Ari Paparo
Okay, so apps. I thought I was the app developer. I'm sort of. So I have a game, I produced the game. And now you're. I work with Overwolf to create an app that's also the game on a PC.
- [03:29]
Nathan Lindbergh
Correct.
- [03:29]
Ari Paparo
So is this a channel play where I'm getting my iOS game onto PCs? Is that the idea?
- [03:35]
Nathan Lindbergh
We're a platform play. So I think the thing is here is that for game publishers, they have the ability to create and develop and put stuff on their game servers and their opportunities. Right. Creating on top of that can be very daunting. It can also expose them to all sorts of struggles and things that they don't want to deal with. So the opportunity here is to allow people to create the items and mods and innovation tools that are necessary to be able to effectively kind of create additional value and content, increase the lifetime value of the gamers and have them have a more positive experience with your game by letting go some of that creative control and allowing this overlay to happen on top of your game as opposed to it being inside your game.
- [04:14]
Ari Paparo
Okay, so is it an indie developer who's doing this or an end consumer who's doing this?
- [04:18]
Nathan Lindbergh
So Overwolf actually works across all games. We have about 1500 games that we kind of support through different apps and different tools. What's great about that is that it, it goes from all the top games from League of Legends to Minecraft to Fortnite to all the biggest games out there, all the way down to indie game titles. And so you have a really nice plethora of titles and targeting and opportunities to be able to look at and support different types of users.
- [04:40]
Ari Paparo
I'm sorry, Nathan, I still don't really understand the product desk. Could you just really like explain what the actual product is like, who is doing what in what and no consumers involved. Like am I a game developer creating new things or are there other people creating things on my game?
- [04:52]
Nathan Lindbergh
Yeah, so I think the way to think about this is that, you know, if you go back in time, right, your phone used to do three things, right? It used to make phone calls, it used to make SMS messages, and it used to go to WAP pages.
- [05:03]
Ari Paparo
Okay.
- [05:04]
Nathan Lindbergh
Now your phone does that, but it also goes to apps, right? Apps that were created faster, easier, more efficient, and they're more tailored and personalized to you. Overwolf in the same way is creating an app store for PC gaming. So for us we have basically a platform that allows users, third party users to create apps that will overlay on top of game publisher games that will allow users to have a more enjoyable experience, a more tailored experience for them. And the way in which the user then monetizes it is through Ivy Standard advertising.
- [05:33]
Ari Paparo
Okay, so the user is creating an app on top of a game's IP of some kind and you say PC. So this is, is the main use case, moving from a, like a mobile environment to a PC environment. Or am I misunderstanding that?
- [05:47]
Nathan Lindbergh
No, the main, the main environment here is really the consumer benefit. So as a platform we're creating an app store and anyone can create an app. It goes through an approval process and then from that perspective they monetize an independent business person.
- [06:00]
Ari Paparo
So what, what sort of apps are people creating?
- [06:02]
Nathan Lindbergh
So a lot of people are creating apps that help with in game real time information. So if you're playing a game like League of Legends and you're trying to understand, hey, that person just selected that champion, which champion do I pick to kind of counterpick that that will provide you with real Time information on which are the best recommended options for you in that situation?
- [06:18]
Ari Paparo
Where do they get the data from in that case? Does League of Legends need to have an that gives them that data?
- [06:23]
Nathan Lindbergh
Yes. All game publishers have an API that we're able to access and be able to utilize and be able to actually pull in that real time data for consumers to use.
- [06:29]
Ari Paparo
Right. So these are things like leaderboards, hints, extra information that sort of guides things like that. Are those the common use cases?
- [06:36]
Nathan Lindbergh
Absolutely. And then obviously things like items and stuff like that, quests, the things that you want in terms of, hey, I need to find specific things in game, I need to understand specific things in game. This is providing you that opportunity to get that information real time.
- [06:47]
Ari Paparo
And is it assumed or is it common? The end consumer, the user, are they multi screening? Is it like they have this app open on a PC and they may have a game console where they're playing?
- [06:56]
Nathan Lindbergh
It depends. Typically it would be, it would be a multi screen experience. So two screens. But the actual founders of the company where they were playing back in 2010, playing World of Warcraft, they actually had laptops and so they didn't have a two screen experience. But when they were alt tabbing out of the game, the game was crashing. So the actual genesis of this entire API and this entire platform was to allow people to not have to have a multi screen experience. So this actually does provide both. You can have a second screen experience, but you can also do it in real time overlaid on top of the game.
- [07:25]
Ari Paparo
Okay, I'm getting up to speed. I'm getting it. Thank you, thanks for bearing with me. Thank you, the audience, for listening to my dumbness. Okay, now how do we make money? So I'm playing League of Legends and now I have also this app that some independent developer or person developed. And now there are ads in the app.
- [07:41]
Nathan Lindbergh
Yes. And you are, you are choosing to download that app. So it's a dot EXE file so you have complete understanding that you're, you're opted in. We've got a hashed email associated with your account. And yes, all of the overlays are built to a specific parameter to have IAB standard advertising. It is widely known that all of these come with a rev share. So the developer of that app that is your favorite app, that helps you stay competitive or just stay relevant in these games, they're getting a percentage of the deal, typically 50%. So there's an automatic kind of altruism there, similar to what you see in the creator economies with video Sites, live streaming, social media platforms. There's that build of, hey, someone created something, lots of people using it, they're getting a nice big payout. And because there's only one add on page is a nice uncluttered ad experience.
- [08:23]
Ari Paparo
I think that's a creative use of the word altruism, but I'll accept it for now. So the app developer gets 50% and then how much does the original game provider of the League of Legends in this example get?
- [08:35]
Nathan Lindbergh
There's no revenue to share with the publishers, just specifically with Overwolf and the independent creator.
- [08:39]
Ari Paparo
So what's the incentive of the game developer?
- [08:42]
Nathan Lindbergh
So for us we see a lot of different stickiness factors. So as someone who's playing the game, if you have a positive experience and you're enjoying yourself, you typically have a longer lifetime value. It also increases play rate. Our average users play about 35 hours a week, so they do invest a considerable amount of time playing these different games on the platform. And so the overall benefits I think are huge in terms of keeping people engaged with an audience and a platform as games are mainly moving towards free to play models. So in game microtransactions matter. The longer someone's in, the more likely they are to microtransact, the more likely they are to spend more and more money with the publishers.
- [09:14]
Ari Paparo
Cool. Let's talk about the ads. So you said IB units. Who's selling the ads first of all?
- [09:18]
Nathan Lindbergh
Yeah, so me, I actually just joined the team about four months ago. We've been around for a little over 14 years and we've always kind of done things programmatically, we've always done things through the Open Exchange. Just finally started working with brands directly, which is really exciting. But all of these IAB standard ads are sold through the private marketplace as well as the Open Exchange and allow for different ranges of targeting and information and stuff like that. The unique part of our offering is that because it's a exe file, there's actually some really unique transactional opportunities when it comes to targeting around isp usage around PCs and their makeups. The build, the actual peripherals, they're using the CPUs, the GPUs. So this really interesting data we pull out in terms of being able to target and really advertise in unique ways to partners.
- [09:59]
Ari Paparo
So what's the breakout and advertising between endemic meaning other games versus non endemic?
- [10:04]
Nathan Lindbergh
I would say right now it's probably, I mean, from a direct partnership perspective, it's probably closer to 5050. From a overall perspective, it's probably 20% endemic and 80% non endemic. We see a lot of interest from publishers, especially folks that want to talk to brands, want to talk to 18 to 34 year olds. Mostly males.
- [10:21]
Ari Paparo
Mostly males, exactly. And what context. Is there any context available? I mean you're in a. You're in an app on a desktop so there's not a lot of like contextual information. Right. Do you give them categories, you give them other information? Let's know what type of game or some other data?
- [10:36]
Nathan Lindbergh
Absolutely. We look at a lot of different factors that go into that current game, previous games existing, as well as looking at just different genres of games that they play. We're able to extract quite a bit of a user profile in terms of understanding those things and working with third party data platforms and stuff like that. Working with folks like Human and dv, we're able to do a lot on the brand safety side to make sure that, you know, we're seeing a really great quality opportunity and that there's a lot of great data there on the user.
- [11:01]
Ari Paparo
Do you do anything with viewability with dv?
- [11:03]
Nathan Lindbergh
We do. We actually have a pretty high viewability score which we find really valuable. We see that users are using this and when they're looking at it it's because there's information that is relevant to them and so they're spending a lot of time looking at it and actually connected right to it.
- [11:15]
Ari Paparo
How does DZ measure that if it's in a PC environment?
- [11:18]
Nathan Lindbergh
I don't really have a full understanding of their specific but from what we see from the ad perspective, they're measuring it with this, with the standard kind of viewability scores and stuff like that. We're also working on some attention metric scores right now as well.
- [11:30]
Ari Paparo
What about identity? You mentioned hashed emails. How are you using Identity to enable better advertising?
- [11:34]
Nathan Lindbergh
Yes. So we were hoping or we were thinking about that there was going to be a whole cookie less world coming forward pretty soon. That obviously is maybe, maybe not, who knows. But because we're a exe file, because we're able to kind of extract some really good information there. There's a lot that we can do in terms of personalization, in terms of batching through different providers and stuff like that to be able to connect the dots on those things.
- [11:53]
Ari Paparo
Well, are you syncing such that I could use a dsp some other identity that I'm more familiar with like liveramp or UID2?
- [11:59]
Nathan Lindbergh
Yeah, exactly. So actually we've been working with a couple partners, most recently with Live Ramp to Connect the dots on that to actually show an extended reach against their current audience set. Because what we found is that in the gaming space there's two kind of archetypes. There's the watcher and there's the player. And our users typically be the player and they're actually very underrepresented in a lot of ad platforms. And so by, by partnering with Liveramp and other partners, we're able to actually see that there is an incremental reach opportunity there of reaching audiences that don't already on other platforms or other. Other DSP packages.
- [12:29]
Ari Paparo
Right, right. I guess I was asking if I was able to onboard my own first party data to target your users with.
- [12:35]
Nathan Lindbergh
Yes.
- [12:36]
Ari Paparo
Yeah. Okay. In terms of like moving forward, do you have any. Anything you'd like to share about kind of your roadmap or what's ahead?
- [12:42]
Nathan Lindbergh
Yeah, I think what's really interesting in this space and what a lot of people are trying to figure out is how do I get that scale in gaming, but also maintain that credibility, that interest? There's a lot of preconceived notions out there that gamers are anti advertising and that they hate all this stuff. And it couldn't be further from the truth. I think that they are critical of advertising when it is done poorly or ineffectively towards them. And what we've actually found is that by leveraging some things that we have by our own unique API has given us a lot of really great opportunities, specifically around a product called Moments Triggered Ads. So the ability for us to actually trigger advertising when specific moments happen in a game so someone wins, someone finds a food item, you know, someone is able to capture a flag, we're able to actually use AI and build off of that and actually know what's happening when that's going on, and then actually serve them a contextually relevant advertising. You know, we actually just did it recently for a program with Pringles earlier this summer where again, after an hour when a user was playing, we'd serve them with a hey, maybe it's time for that Pringles snack break. Those kind of ways are, I think, really nice and interesting. They overlay on top of the content, but also give a little bit more depth and creativity in terms of the conversation that a brand would have with the potential audience.
- [13:52]
Ari Paparo
Makes sense. Okay, so let's go to our lightning round. So, relatively quick questions, quick answers, what is your number one competitive advantage?
- [14:00]
Nathan Lindbergh
I think it comes down to our unique selling proposition. I think that when you look at opportunities around advertising, the in play Nature, the ability to be in the game when people are playing the game is really, really valuable. And it's something that's very unique for us. The fact that it's not built into the SDK, it's something that overlays on top.
- [14:17]
Ari Paparo
Okay, well, what's your biggest challenge?
- [14:18]
Nathan Lindbergh
Well, I think for biggest one for us tends to be a lot of people say over who, not over wolf. There's definitely a learning process there for us. And as well, I think there's a market understanding of just the fact of, hey, are these gamers useful or relevant? And the answer is they're a huge, huge, huge spender on things. They have a lot of high disposable income.
- [14:35]
Ari Paparo
Yeah, I guess I'm going to ask a follow up question. Not in the round, which is like, are you well known in the advertising world? It seems like a kind of a new thing to me and I've been around for a while.
- [14:45]
Nathan Lindbergh
Yeah, no, we've been around again. We've been represented by a lot of different partners previously. So for us, as a direct brand partnerships team, I've only been here for four months. The team has only been around for 18 months. So we are relatively new. We have signed some partnerships with folks like Dentsu, we've got some programmatic deals with wpp. We are making a tremendous amount of progress and folks are excited about what we have going on. But yeah, we're relatively new in terms of a direct partnership.
- [15:08]
Ari Paparo
You've just been available in the exchanges and people just needed to figure out what they were buying, more or less. Got it. Okay, now this is usually a stumper question, but for you, it's going to be very easy, which is if your company was an animal, what animal would it be?
- [15:19]
Nathan Lindbergh
You know, it's funny because I listened to a couple of the other previous podcasts you've done and heard everything. Don't say tiger, don't say lion. I love the recent one on salmons. But I think for us, obviously wolf is a key part of what we are. I think it's easy to think about a wolf as a loner, as something that again, like, is not really part of anything. But if you think about the archetypes of a wolf, they're very communal based, they're very focused on each other, they're focused on the herd, they want everyone to succeed and they'll ferociously defend themselves. And I think that from our perspective, yeah, it's an easy one because in the name. But at the end of the day, when you think about our core leadership values and what we're focused on. Yeah, it's defending this kind of new group of people that are underrepresented right now in the marketing space.
- [15:58]
Ari Paparo
All right, you heard here first. Nathan Lindbergh from Overwolf. Thank you for being here.
- [16:02]
Nathan Lindbergh
Pleasure. Thanks for listening. New interviews are added every week at Market TV and your favorite podcasting app.
- [16:19]
Ari Paparo
Thank you for listening to the marketecture podcast. New episodes come out every Friday and an insightful vendor interview is published each Monday. You can subscribe to our library of hundreds of executive interviews at marketecture tv. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's news at News Marketing. And if you're feeling social, we operate a vibrant Slack community that you can apply to join@adtechgod.com.