A correction has been made in this story. See below for details.
NEW YORK (AdAge.com) -- Three years ago, NBC Universal's USA Network didn't have much of a web presence to speak of. The highest-rated cable network since 2005, USA couldn't seem to convert on-air viewers to online users -- and what little audience it had at USANetwork.com wasn't sticking around long.
But then it tapped into another activity people like almost as much as watching TV: playing games. In late 2007 it launched CharacterArcade.com, a home to USA-branded casual games, such as "Psych Food Fight," which has boosted USA's web traffic to an average monthly unique audience of 2 million users, per ComScore.
"You don't think of USA Network as a gaming destination, so we knew we had to create an entirely separate business that houses these games that come from our original series but also brings in newer games," said Chris McCumber, USA's exec VP-marketing and brand strategy.
CharacterArcade.com is a play on USA's tagline "Characters Welcome" and has doubled its time spent on the site in the past year, thanks to partnerships and syndication deals with leading gaming publishers such as Bigpoint, NeoEdge, Bunchball and Mochi Media. In total, USA's suite of more than 50 casual games has driven more than 50% of the traffic to USANetwork.com in the past year. A Facebook Connect application has also taken off, with nearly 27,000 monthly active users.
USA still has a ways to go before it catches up with some of its cable competitors, including Nickelodeon, whose collection of family-oriented casual games reaches more than 13 million unique users a month, according to ComScore. Even Game Show Network, a small player in TV ratings, has become a major force in online gaming, racking up more than 6 million unique users in 2009.
Mike Vorhaus, president of Frank N. Magid Associates, said casual gaming has become a smart way for cable networks to lure advertisers who wouldn't otherwise consider online buys. "It's important to advertisers to know that there's real engagement. They can sell people a package of TV and a package of online, but it's less valuable to sell a non-gaming company an ad from a gaming site if there's no TV component," he said.
Sponsored games are a growing business for USA, particularly among auto marketers.
CharacterArcade.com produced one major case study for General Motors, which integrated the now-discontinued Saab into "Covert Ops," an alternate reality game based on USA series "Burn Notice." The game lured 500,000 unique users and generated more qualified leads than it had Saabs to sell.
"Covert Ops" returns Jan. 21 with a presenting sponsorship from Hyundai's Genesis Coupe, filling the role vacated by Saab. "White Collar," a freshman series on USA, will also debut its own ARG, "Chasing the Shadow," featuring heavy integration of the 2010 Ford Taurus.
USA's next endeavor is to bring tangible goods into its casual-gaming offerings through a partnership with Bunchball, luring Character Arcade users to earn more points and a chance to win a Nintendo Wii or an iPod Touch. It's a ploy that worked for Disney's Club Penguin, an unsponsored casual-gaming site, but also seems to have broader applications for other web publishers.
"I spent my whole career measuring the response to advertising, and I've never seen anything like what casual games can do,"said Peter Daboll, CEO of Bunchball, a veteran of Yahoo's gaming properties. "People actually want to participate, even if you turn up the commercial value."
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CORRECTION: An earlier version of this story said that "Covert Ops" would return Jan. 18. The game will return Jan. 21. The story also said that Palm Pre was a presenting sponsor, and it is not.