Apple Strangling iAds?

If this article is to be believed, Apple may charge advertisers $1 million to be an advertiser on iAd, and if you want to be one of the first, it might be $10 million. So, Apple, I guess you only want big advertisers. I was expecting something more like Google, where anyone can buy search terms to place their ads alongside. This is a completely different program... and it does make you wonder how much ability an advertiser will get to determine where their ads appear. What if your ad appears in a lousy app, or an off-color one?

Right now, since Apple has released very little information about this plan, I guess we have no answers. But the devil really is in the details. Do advertisers get to choose what apps their ads appear in? Do app producers get to choose what ads appear in their apps? How does an advertiser control their spending (do you set a price level, a number of impressions, what)? Do you pay for every time the ad appears, or just every time someone clicks on the ad?

From this article it sounds like Apple is setting up something more akin to traditional magazine advertising than the very individualized Google model. I was hoping Apple was planning to democratize advertising on mobile platforms the way Google did for desktops. I'm sure Google gets the bulk of its revenue from a very large number of small advertisers, rather than a few big advertisers. You can get started with Google for next to nothing, and scale up if your Google ads prove effective. Will Apple offer something like that? I hope so, but this article does not make me optimistic.

Hobby Game Sales up in 2009

According to this article in ICV2, sales for the hobby game store market were up from 5-10% for 2009. This was driven largely by a resurgence in Magic: The Gathering and board games, as well as the return of Heroclix. RPG sales, by contrast, were down 10%.

This means it's still a challenging market for most game companies. The retail store environment is still hanging in there, but there doesn't appear to be any reason to hope for a long-term resurgence of the retail stores. If anything, the trends seem to be pointing in the other direction. RPGs are down, and I'd suspect this is due in part to increasing acceptance of e-books and the growing availability of e-book readers. Card games and board games and miniatures still have a tactile value that makes them strong performers in retail stores, so until the electronic alternatives to those become interesting we'll expect those types of games to be good retail performers.

Not that this really helps the struggling game retailers; they could still use a solidly profitable game line that brings new customers into their stores. So could game publishers... any ideas?

Interactive Fiction

It's still alive! At least, there's a community of people building interactive fiction software and stories, as this article talks about. Ah, old-school gaming... but perhaps it's not just a quaint survival of an older time. If you think about it, e-book readers that don't have much capacity for games (think Kindle) could still be able to do classic choose-your-own-adventure books. Heck, even an iPad might be good for that, or maybe an iPhone. It's not always about the technology; sometimes it's just the experience.

Interactive fiction as the next alternate-reality-game trend for marketing other games? It could be, if some clever marketer wants to make it so. Low-tech can be widely distributed in an effort to market high-tech.

If you like this idea, go to page 127. If you don't like this idea, go to page 145...

The E-Book Saga, Inside

The New Yorker has this nice little piece about the publishers maneuvering behind the scenes to affect e-book pricing on the Kindle and the iPad. There's some awareness of the fact that publishers will have to justify themselves to authors, but no real grappling with that reality or how quickly it's arriving. The head of Random House seems to think that e-books will take another decade to become an important part of the market. Wishful thinking at its finest.

Publishers can certainly serve a purpose for authors, but they have to be prepared to re-invent their business models. That's always painful, but the choice is that or severe shrinkage. Authors are now able to market their own books, so publishers have to show the value of their marketing to authors. (For many authors, one of their major gripes with publishers is the reduction in marketing budgets and efforts for all but the biggest titles.) Publishers can certainly help develop new authors, especially by advancing royalties. But that's always been a risky undertaking for publishers; they lose money on a majority of authors, and hope to make up the losses with big wins on some authors.

Amazon is offering some marketing tools to authors, like having a conversation with a marketing expert, or connecting them with services that do professional reviews of their books and make those available. I'm sure we'll see more of this as time goes on; authors will have more ways to market their own books. This is not something all authors want to do, though; many would be perfectly happy to leave that to someone else to do. Unfortunately, if you want it done well you may have to take a more active role in doing it, as publishers seems to be ignoring most authors in favor of a few mega-sellers. Authors will have to give some thought to re-inventing their own business model, too.

It's a time of great change, and also great opportunity. As the technology advances and changes, we have to change how we do business to take advantage of it, or risk getting lost in the shuffle.

Fixing E-Book Readers

This is a great post on what's wrong with current e-book readers and how to fix them. We're still in the early days of the e-book business, despite the fact that e-books have been available for over decade. (I was the first, as far as I know, to sell e-books in retail stores... on floppy disks... in Acrobat 1.0. Ah, the good old days.) The iPad offers many possibilities for interesting books; check out the features of Alice in Wonderland, where you can interact with the illustrations in various ways. But there's still lot that can be done, and part of it will come from the tools available on the various platforms.

I'd like to see easy ways to annotate the books... it'd be nice to have a stylus to scribble notes in the virtual margins. Easy font and formatting changes are helpful, and we're already beginning to see those. But the area that's still really lagging is in marketing tools.

One of the things that helps the book industry is the ability to autograph a book. An autographed book instantly becomes more valuable, and a treasured possession. The prospect of getting books autographed drives people to bookstores where an author is speaking, and helps create more buzz about an author and the book. Sadly, this is all lost with an e-book. Can we get a technological fix, please? Some way for an author to attach a digital file, customizable, to an e-book?

Another marketing tool is the pass-along... when you lend a book to a friend. The Nook is trying that, albeit in a limited fashion. Let's see some more experiments along this line, too. How about letting someone resell their e-book to a friend? Maybe they could recoup some of their investment in the e-book price... though you have to figure out some reason why they don't just give away the digital file. (But the chance to earn some money from it might slow that down...)

So let's see some marketing features added, along with other features. Hello, Amazon? Better make that next Kindle pretty darn cool...

Engaging the Enemy

Activision finally seems to be awakening to the PR damage that's been caused with the firing of Infinity Ward leads and the subsequent dueling lawsuits. In a bold move, they have sent a blogger into enemy territory to engage the haters. Activision blogger Dan Amrich has been posting to a Facebook group set up by Activision anti-fans, attempting to calm the waters.

He may not succeed, but the effort itself will put Activision in a better light. And, as you can see by this post and others, it's bringing more publicity to Activision's attempts to not be perceived as jerks. The alternative is to turtle up and not say anything, which means other people get to define your position for you. Now, there are dangers in communication like this; you may make matters worse if you say the wrong thing in your attempts to answer jabs. You may also piss off your boss, too, as you attempt to minimize the statements the boss made. It's a tricky line to walk.

Ultimately, will this affect Activision's sales? Perhaps not; the number of people aware of anti-Activision sentiment must be a tiny percentage of their customer base. The greater danger might be to Activision's ability to attract developers or to cut deals for licenses or acquisition of development groups. At this point, you'd have to think any developer that was approached by Activision with an investment proposal would either say "No, thanks!" or ask for a lot more money. So the corporate image can be worth millions, even if doesn't matter much directly to the customers.

Bottom line: It's better to keep a good image than to try and rescue a tarnished one, but in either case the effort is worthwhile.

Flocking To The Summer

It's been a longstanding tradition in the adventure gaming industry to save your really big product releases for the summer. This evolved for several reasons: First, the initial audience for RPGs and card games (and to a lesser extent war games) was the teenage boy, whose biggest buying season was the summer (when they were out of school and looking for things to do). Second, the biggest conventions (GenCon and Origins) were in the summer, so timing a release for one of those cons meant maximum exposure to the gaming press, distributors, retailers, and the biggest group of customers in one physical location. Not incidentally, a company can also make a pile of money selling a new release to eager gamers at the con.

Things have changed in the market since the early days, though. The demographic is now much more widely spread, so counting on a summertime spending surge is not as sure a thing. And since many companies have adopted this strategy, you are competing harder for attention and dollars. It's OK if you're one of the biggest companies with the most-awaited new release, but you can get lost in the crowd. And attendees only have so many dollars to spend, so you have to make sure they spend some of it on you.

In short, there are now some good reasons to release major products at other times of the year. The best time depends on your game, the demographics of your audience, and what your distributors will suggest (since they know what to expect in the coming year). With all that said, it can still be a great idea to release your new product at GenCon or Origins if you properly prepare your audience. It's always nice for a small publisher to come back from a show knowing that the whole trip was paid for by the direct sales at the show. Marketing that pays for itself, and that lets you know that right away... now that's marketing everyone can believe in.

GameStop Under Fire

So 7-11 is now getting into selling used games. One more reason to think GameStop is going to have a tough time in the future. A company called Game Trading Technologies will be stocking cardboard displays in over 3,000 7-11 locations with games priced at $19.95 or less for a variety of platforms. Yet one more downside for games sold on physical media -- someone can resell it, and the publisher doesn't get any of that resale money. Wow, just think if it worked like that in the book market, nobody would buy new books! Oh, wait...

Of course, if the publishers were selling downloadable content for these titles, then maybe expanding the audience would be a good thing... they'd get a chance to sell the same DLC more than once for a single physical game. Thus turning game resales to their advantage, instead of griping how they don't make anything from those sales. Hmmm...

Event Marketing Gone Bad

Event marketing is a cool way to draw attention to your product. You create some sort of event, something unusual that gets press coverage, and usually you'll spend far less than you would for advertising to get some attention. As you might expect, there's a way to do this right... and a way to do it wrong. The wrong method is illustrated by this attempt at getting attention for the upcoming release of Splinter Cell Conviction; you hire a guy to dress up like a wounded man from the game and point a fake gun at people in a downtown area. As you might expect, this gets reported to the police, w, who show up and point real guns at the guy.

Fortunately, no one was shot, though you might think about shooting the marketing guy that thought this was a good idea. Making up interesting events to draw attention can be a good idea; making up events that can potentially create hazardous situations is not. This idea should have been, pardon the expression, shot down in the marketing meeting before it ever got out into the street.

DSi XL Sales In

According to NPD in this report, the DSi XL pulled in 141,000 sales in March, its debut month. While this may sound impressive, the whole DS line sold 700,800 units for the month. Of course, the DSi XL only had one week for sales. Still, you have to wonder if Nintendo will be recouping the development and production costs any time soon. Especially when they continue to talk up their new handheld, the 3DS, which will have the inevitable effect of continuing to depress DS sales.

It still seems to me that DSiWare offers tremendous potential for additional profits if properly exploited. I think one of the key advantages of the iPod Touch/iPhone/iPad hardware is the ease of buying new software. I may have complaints about how Apple organizes its App Store (or, more precisely, how it doesn't organize it) but they sure make it easy to give them money. Nintendo should be making a lot more on titles where they don't have to create and ship cartridges and packages. They should use this to encourage lower-cost software, and work hard to make the process of buying easy.

Push that hard while you secretly work away on new hardware, and then when you launch the new hardware you'll have an even better online sales structure in place. Yes, the retailers may scream (like they did with the PSP Go), but as long as you can still sell them packaged goods for the platform, they won't complain. Especially if this process can mean more hardware sales...

Piracy Gets Real

Piracy has long been a favorite bogeyman for electronic game publishers (and the music industry, too). THe tough part has been actually quantifying the size of the piracy problem.  Ars Technica has a post on the government's attempts to really look at what's known about piracy. It seems that when you look at it more closely, the claims about economic impact are impossible to quantify, and the numbers that have been bandied about before aren't to be trusted.

Really, I've found the whole piracy debate (which has since become important in traditional publishing and paper gaming as well, with the spread of e-books) to be missing the point. To me, the salient facts are that (1) piracy exists and (2) there is no way to prevent it, technologically. (Despite many attempts.) That being the case, I think publishers have two choices for constructive action about piracy. They can (1) Ignore it, or (2) Use it. How do you use it? I think we're seeing that with the free-to-play model, for one example. If the game is copied and distributed freely, that helps the publisher make money. Another variation is the free version that you can upgrade to a paid version. Give the customers a taste so they know what the product is, thus satisfying curiosity that might otherwise lead to piracy.

Bottom line: Make piracy work for you.

It Was Broke, and They Made It Worse

So the iPad comes out and Apple takes a stab at revising the App Store. Good, you think... the App Store has never had great tools for finding games, developers game the hell out of the comment system, and now that there are more than 50,000 games finding anything not on the top 100 lists is purely by luck (or knowing the name from somewhere else). Ah, and the iPad arrives, and games are the single largest category for iPad-specific software. Excellent, Apple is right on top of things, they're going to revise the App Store before the situation gets out of hand...

And then you see what they've done. No more sub-categories, just some filters showcasing What's New and What's Hot. Excuse me? Did all of the creativity and thought go into the hardware, and then when it came to the App Store you just decided to be stupid? We need more ways to find games, not fewer. We need the commenting system improved. We need to be able to find an RPG without having a category stuffed full of pseudo-RPGs that are come-ons for social network games.

Look, Apple, I know you feel that it's up to the developer to sell their app, and you're just a store. But come on! Throw us a frickin' bone here. Even stores offer tools and programs for companies trying to sell things in their stores... shelf talkers, end caps, co-op ads in fliers, coupons... I sure hope iAd is a lot more thoughtful than what you've done with the App Store. Because it's broken, and you're making it worse, and as more apps pour into it, it's gonna get worser. (Somewhere, an English teacher just had a coronary.)

Nintendo Stomps the DSi XL

Apparently, Nintendo is not content with sticking a knife into the back of the DSi XL launch, as I discussed here a few weeks ago. Now they're looking to cut off its head and bury it at the crossroads, according to this article in Businessweek. They are calling the 3DS the biggest handheld product since 2004, when they introduced the original DS. Translation: Don't buy the DSi XL since the 3DS is the new hotness. In fact, why don't you avoid buying any DSi at all, since this new device is going to replace all of them.

Nintendo must be really, really worried by Apple (certainly not by Sony, as the PSP continues to fade). Why else would Nintendo sabotage its own handheld business in favor of a new and untried handheld that won't even be out for at least six months? Perhaps the clue is that they projected in January that DS hardware sales have dropped 3.8% over the last 12 months, and software sales have dropped 24%.

So I guess their answer is new hardware. I sure hope that the 3D effect works... it seems like an awful big risk to me. A more surefire answer might be to put some effort into the DSiWare store, and perhaps make it easier for developers to get in there. Apple has 50,000 games for the iPhone/iPod Touch... the DSi has perhaps 4000. Average selling price... well, let's not go there.

Not to mention that the DSi is only for playing games, and the iPhone/iPod Touch can do all sorts of other things. Hmm, Nintendo should be worried, but I don't thing putting 3D lipstick on their hardware will be enough to compete effectively in the long term. We'll see, I guess.

3 Key Features of the Game Demo

Game demos are a proven way to sell games, but there's no set formula for crafting a demo. It's a process that should involve the creativity of the game designers and the creativity of marketers. A good demo has to provide enough of the flavor of the game to convince someone to buy the full game, and yet not so much of the game that the potential customer feels that the demo was enough and they don't need to buy the full game. (Sometimes when I watch a movie trailer, I get the feeling I've seen all that I want to of that particular movie, and there's no need to pay to see the whole thing.)

Implicit in all this is that the game has enough entertainment value that it will be worthy of the full price. Sadly, not all games meet that standard, and you should know if your game does or not before you waste time putting together a demo. If you're just cranking out a game that you're hoping to sell before the word gets out that it isn't all that great, avoid doing a demo. (Similarly, movies that the studios fear will be savaged by the critics somehow never seemed to get released in advance to the critics.)

Let's assume that you have a terrific game, and all you need to do is to give players a taste of it and they'll flock to buy it. Crafting a good demo should embody these principles:

1. Make it easy. The demo should be easy to find, easy to install (if electronic) or run (if non-electronic, as in a board game or a card game or an RPG), and easy to buy the full game (a way to upgrade from the demo inside of the demo, or a web address where you can buy the game, or a local store listing... something).
2. Make it representative. The demo should embody the key selling features of the game... you did determine what those were, didn't you? (One of the benefits of creating a marketing plan is that it forces you to think about those sorts of things.) Leave in enough of the key elements so that the demo really feels like the full game, not like some random bit that could have come from a number of different games.
3. Make it fun. You'd think this goes without saying, but sometimes in creating a demo you leave out so much that it's no longer fun. Make sure it is, or else your effort is wasted (or worse, counterproductive).

Game demos usually are created by leaving things out of the full game, so be careful what you drop or shorten. Non-electronic games have other demo issues. You have to make it easy to distribute (perhaps as a free PDF or a free item you give to retailers), and it has to be easy to pick up and use by someone who has never seen the game played before, and yet still come across with the flavor of the game. Not easy... but possible, and certainly worthwhile when you get it right.

Finally, make sure you track the sales that come from the demo by using a unique landing page or other method. This way you can tell if the time and effort you spent on creating and distributing the demo has been worthwhile, as you plan your next demo.

Customer Value

A hat tip to Ed Healy for pointing to this blog post by Avinash Kaushik. He sets forth a process for calculating the lifetime value of a customer, and points out that this is a better way to look at customer acquisition costs. It's especially important to note for publishers who are producing regular new products, particularly if their previous buyers are a likely customer for their new products.

If you're creating games with a setting where you intend to provide further products, then dealing with a customer over a long period of time is something you need to factor into your marketing decisions. If you would like to sell other products to customers, you need to worry about lifetime value. Generally it's going to be far easier, and more cost-effective, for you to sell multiple products to one customer than to acquire new customers for every new product.

Another way to look at this is to try and maximize the value to you of each customer. You don't want to do this by browbeating them, but by making their experience with you a positive one. Every aspect of the customer experience should be oriented towards this goal. Make paying for your product easy; make sure the product provides a terrific value for the money; follow up to make sure customers are satisfied.

iAds: Apple Throws Down The Gauntlet

As expected, Apple has introduced its own ad service, something that all iPhone/iPad/iPod Touch developers can tap into. What wasn't expected was just how they've implemented it. Clearly, from what they said, they are throwing down the gauntlet with Google. This is clearly a way to take charge of the mobile ad market. If Google was thinking about implementing some version of their text ads on phones, they may want to think again. Apple is doing nothing less than trying to reinvent the whole concept of online advertising. If they succeed, and Google doesn't come up with a good answer, Google may be the Microsoft of the new decade.

Details are still forthcoming, and of course much will depend on exactly how this is implemented. Part of Google's success is due to how easy it is to create and place ads, and how easy it is to control the spending, and how easy it is to get excellent information on the performance of your advertising. Also to be seen is how obtrusive the ads are in use, and how relevant they are to the context, and how customers will respond to them.  Still, I have to give credit to Apple for taking an aggressive move. It may be ambitious, but even if it fails it will probably move the technology forward overall. Google could use some smart competition to help sharpen their game.

Social Marketing

Marketing through use of social networking tools is a hot area, and it's not as cut and dried as more traditional marketing tools. You have to provide authentic information and a distinctive voice, which means being entertaining and informative. That's a tough prospect, especially if you're trying to create new posts every day. Part of how you build an audience is with frequent bits of new info. You have to work on providing all of this through a variety of sites and tools, not all of them cross-connected.

A good piece of advice is to try and build an inventory of content in advance. If you have a good stockpile it doesn't take too much time each day to post something that's already written. Start with your friends and business acquaintances, and have them help you build up your fan base to start with. Give fans some incentive to spread the news to other people. Regular new bits that are interesting will get passed along... is there some part of your game design that you can add to over time? Release new info and it will help expand your fan base. World of Warcraft has an expansion coming up sometime in the next year, but they've been steadily releasing bits of info for at least a year already. Info on the new character classes, concept art, occasional news items... it all adds up to keeping a constant presence in the fan base.

This doesn't happen by accident; you need to plan for this and keep it in mind as you create new products. Social marketing is a process, not a single event in time, and thus needs constant care and feeding.

Apple's Ad Network

I predicted this when Apple bought Quattro last year: They're gonna roll their own ad network. Not that everyone else didn't figure it out, too, since it was pretty obvious. But it is of importance to iPhone and iPad game developers, since so many of the games are free or ad-supported. If Apple's implementation is good, this will be an important way for developers to make up for the low average price of iPhone games.

Part of it, of course, will be what users think of it, and that depends on how it gets implemented. But users don't seem to mind the current ads appearing on many iPhone games... and if they do, spending a buck or two to get rid of them hardly seems like a big deal if you like the game.

When it gets more interesting is if this will be available for e-books. I see no technical reason why not. It will be interesting to watch as a whole cultural segment gets transformed. Look, there have been ads in books before, but never in a widespread way. Apart from ads in the back for other books, very occasionally I remember seeing a cigarette add as an insert in a paperback... long long ago, that is. I think it will be seen differently these days, especially if many e-books are priced over $10. I bet an e-book at $5 with a few ads might go over very well... again, depending on how the ads get implemented.

It's an exciting time for the game and book publishing business.

The Splinternet and Social Marketing

An excellent post from Josh Bernoff at Forrester Research talks about how the Internet is fragmenting into separate technologies. For marketers, this is also important because the Internet is less interconnected than it used to be for marketing messages. Already, Facebook walls off its network from search engines, so all the data that's flying around there is mostly not accessible from a search. Which is why you have to build a Facebook page for your product or company in order to build a brand among your friends and acquaintances.

It's going to mean that marketers have to stay abreast of the latest social networking and other technologies to make sure their marketing message gets out there as widely as possible. Social marketing is becoming a lot more work. Somebody has to spend their time on Facebook, in forums on enthusiast websites, on Twitter and MySpace and LinkedIn and Plaxo and... well, you get the picture. It's also true that you can't just hire someone at minimum wage to post standardized messages for you. That sort of marketing spam quickly gets filtered out; if not by software, then by the customer's attention filters. You have to have an authentic voice speaking knowledgeably about your product, and glib fact-free speech just won't cut it.

Marketing gets easier and tougher moving into the future. Thanks, technology! I think...

Game Distribution, 2015?

At a game marketing conference in San Francisco, some executives held a panel discussion on what game distribution will look like in 2015 (a report from Gamasutra here). As you might expect, the answers tended to be in line with what their companies are planning to do. So GameStop thinks that retail will become "more experential, something like an Apple Store"... really? I have a rather hard time visualizng GameStops becoming similar to Apple Stores. I can say my that my Hyundai econobox plans to become a Mercedes sport sedan, but that doesn't mean it's likely to happen. GameStop seems to think that it can ride the wave of digital distribution. Heck, Rich Hilleman (Creative Director at EA) is even feeding their illusions: "My opinion is that Target or GameStop or Best Buy or Amazon has nothing to worry about, digitally, because they understand their customers really well, and they know things we don't know." Rich, I think you know better than that. EA is already striving to establish direct relationships with customers, and in five years I would think that EA should know a hell of a lot about their customers.

Sure, Apple has taken the lead in digital music distribution... for that matter, in all music distribution. Partly because the music industry was bone-stupid about making the transition to digital distribution. They didn't want to believe that digital distribution would ever replace CDs. They saw their business as depending on the huge margins of CD sales, so they saw themselves as in the CD-selling business rather than selling music. So they let Apple determine pricing and presentation of their titles, and now many musicians are abandoning the classic model of signing with big labels.

Digital distribution of games is not exactly the same, of course. But many developers are beginning to wonder why, exactly, they need to sign a deal with a publisher when they could sell a game directly to consumers. And some are making good money with non-traditional models (see League of Legends, for instance.) It's a time of great change in the game business, and we will see many winners and losers emerge. I suspect companies that insist things will remain pretty much the same as they have been will be among the losers.

iPad As PR Vehicle

There is a window of opportunity now, before the iPad becomes old news, to garner a great deal of free publicity with a new iPad app. The version of Scrabble for the iPad has done this, with the clever feature of allowing an iPhone/iPod Touch to be used as a tile rack with the Scrabble board on the iPad. The iPad clearly has potential as a gameboard; you could lay it on a table and all the players could touch it. The multitouch capability, along with all the graphics and animation and sound abilities, allow for whole new types of designs for multiplayer in-person gaming. Those who are there first will be able to get lots of free ink in magazines and newspapers, as well as web sites and television coverage.

A similar opportunity exists for e-books. While a basic print edition of a book can be easily swept onto the iPad, the technology allows for a very different book experience to be created. Interesting ideas should have no problem getting good press coverage.

While the inital hoopla will die down, I expect the iPad and devices like it will continue to generate interest for the next few years. Interesting new apps will have an easy time getting media coverage. This is true for other technologies that are being pushed by electronics manufacturers; 3D being a case in point. Games taking advantage of 3D displays will have an easier time getting press coverage.

This is another type of hook you can use to get a whole lot of press coverage. All you need is to be on the cutting edge of the technology curve... and sometimes it doesn't even require a rocket scientist to get there.

Tchotchkes

Tchotchkes, schwag, chump chum... it goes by a variety of names (some less flattering than others), but it all refers to stuff companies hand out (usually at trade shows or conventions). There's an amazing range of products available to customize with your company's logo, from M&M's to pens to mugs or tote bags, and many things far less obvious. So how do you decide whether or not to pay for some of these items, and if you do, which ones are worthwhile from a marketing standpoint?

Ideally, you want to draw people to your product or your company; perhaps get them to come to your booth in order to get a tchotchke; maybe to visit your web site later, or have your contact info for some time after the show. In all cases, you want to leave a good impression of your company or your product. A cheap pen that leaks ink or doesn't work is not a worthwhile investment.

If you are trying to draw people to your booth at a show, then the product should be desirable (either because it's cool, or it's classy, or it's unusual, or it's useful). If every other booth has a free pen, then no one will care much about your free pen unless it stands out in some way. Maybe in that case you offer a pen holder... and tell the customers it's for all the other companies' free pens.

A tchotchke that's directly linked to your product or company is great, as long as it's still useful or cool. Foam dice for a gaming company? Yup, I still keep those around. Pens? I got a zillion of them, hardly ever look to see whose it is. That heat-sensitive mouse pad I got from Zynga? Use it every day. Post-it notes from Sony? Use them all the time.

Always compare the cost of tchotchkes to some other way in which you could spend those marketing dollars. If there's some way to track the performance of the tchotchke, use it! (A unique landing page on the item, for instance, will let you know how many visitors you got from it... or you could do a survey... at least try to track it somehow.) Maybe you're better off printing up some fliers rather than making pens, especially boring pens.