Companies Use Online Games as Marketing Tool

Because kids have been known to change their minds almost as often as they blink, Joyce Harris understands that she and her staff face constant challenges in luring children to The United States Mint’s website, www.usmint.gov. But The U.S. Mint has been doing it, and doing it well, since Harris came aboard as a division chief of Web content in 1999.

Two years earlier, in April 1997, former President Clinton asked 30 federal agencies to find ways to "enrich the Internet as a tool for teaching and learning." The Mint was eager to answer Clinton’s call, but it struggled to find the best way to attract kids raised on Sony PlayStations and PokŽmon and keep their attention long enough to teach them about the role of currency in the history of the United States.

Harris looked around the Web for the answer and found pieces of a solution at sites such as Cartoonnetwork.com, Clevermedia.com, Disney.go.com and Web Business 50 winner AtomShockwave’s Shockwave.com. She saw hundreds of interactive games, from simple jigsaw puzzles and card games to revivals of arcade classics to new 3-D titles. And millions of Americans were playing. In 2000, about 35 million people played games online, according to a study by Jupiter Media Metrix. The company believes that that number will reach 45 million by the end of this year, and more than 100 million by 2005.

While the Mint is going after the kids, companies such as Web Business 50 winner Ford, Microsoft and Siemens are hoping that their online games will appeal to an older audience as well. And there’s every reason to believe that they will. A May 2001 survey by Boston-based Yankee Group found that 60 percent of 25- to 34-year-olds and 56 percent of 35- to 44-year-olds play an online game at least once a week. This year, many companies with a strong Web presence are using games to attract customers, expose them to branding messages, and collect user data and sign them to mailing lists. This strategy, in which advertising and marketing objectives are blended into an online game, is known as advergaming. Companies are spending anywhere from a few thousand dollars (for a two-dimensional Java-based game) to several hundred thousand dollars (for a 3-D game) because they believe play will pay off in name recognition and positive impressions. At the same time, many other organizations are successfully marrying educational and training materials with games?known as edutainment?to satisfy their audiences and reach their business objectives.

How the Mint Makes Money

Since its launch in 1998, The U.S. Mint’s website has been writing its own success story. Monthly traffic has grown from 176,467 visitors in January 1999 to more than 930,000 in January 2000, and it now eclipses more than 1 million visitors per month. In addition to providing the general public with a wealth of information on the Mint, its history and the process of coining, it was also making money?electronically, that is. The site generated $156 million in 2000 through its online catalog, which had launched in April 1999. There, shoppers can buy coins, money clips and even bolo ties. (The Mint’s total annual revenues are more than $1 billion.) By September, the site also signed 460,000 subscribers to its product newsletters. But money wasn’t the only thing that the Mint was after. Harris wanted the site to provide important lessons in American history to school-age children, and she had been given a $50,000 grant from the Department of Education to do just that.

The education project, HPC (an abbreviation for History In Your Pocket [HIP] Pocket Change), was redesigned last year with faster downloads and more animation.

New versions of the site’s most popular games?Puzzle Mint (a collection of online jigsaw puzzles of the new state quarters), Mark My Words (an interactive and downloadable word search with a coin theme) and Cents of Color (where users can design their own color schemes for the state quarters)?are making the site more popular than ever. They also turned the Mint into a Web Business 50 winner. While users are playing Mark My Words and putting together puzzles at Puzzle Mint, they are exposed to factoids?for example, the Constitution was approved by the Second Continental Congress Sept. 17, 1787?about the Mint, U.S. history and coins.

"Because the success of the online gaming community is so well-known, the Mint sought to use it as a vehicle for its educational information," says Harris.

HPC has seen traffic jump 325 percent from July 1999 (17,989 users) to July 2001 (58,505 visitors). More important, she says, the share of HPC traffic as it relates to the rest of the site has grown from 2.9 percent to 6.9 percent over the same period.

"It’s what users want," says Harris. "They want to be entertained. We use games to lure and engage users, but we also use them to educate. With most of our games, we have decided that those who play them will not leave without learning something about coins, history or geography."

Killing Clippy

The rasping voice of Comedian Gilbert Gottfried was the perfect choice for Clippy, the animated office paperclip that has agitated Microsoft Office users since 1997. (Gottfried is also behind the equally annoying Aflac duck.) Signing the celebrity was part of Microsoft’s $30 million campaign to promote its Office XP software. Less than $150,000 of that went to pay for an interactive game called X-tract Clippy, in which players could use office supplies like rubber bands and staplers as weapons to silence this menace to productivity once and for all.

The integrated marketing campaign, which included a massive PR push and e-mail barrage directing people to the website, generated 22 million hits on www.officeclippy.com within the first month (April 2001). According to Microsoft, the number of product information requests on Office XP was 60 times that of other campaigns added. Matthew Ringel, vice president of strategy and digital solutions for KPE, a New York City-based marketing communications agency that helped develop the Clippy game, says the game was the key to the whole campaign.

Alex St. John, CEO and cofounder of Redmond, Wash.-based WildTangent, a 3-year-old interactive media company, believes that games will become even more effective marketing tools as the Web and new technologies bring richer game experiences to users. One of WildTangent’s more successful campaigns was an online game for the film Jurassic Park III. In July, the joint venture of DNA Studios, Universal Pictures and WildTangent generated 284,000 plays (more than 20,000 per day) for an average of 19 minutes per game. Not a bad return when one considers that banner and pop-up ads get a few seconds’ notice at most, and that click-through rates (CTRs) have sagged to 0.1 percent on average.

"Games are a media type," says St. John. "In fact, they are more effective at marketing than any other media type that has existed before."

The House Wins

Online gambling is illegal in the United States, but that hasn’t stopped Las Vegas-based Harrah’s Entertainment, another Web Business 50 winner, from offering a virtual casino as part of its Total Rewards loyalty program. The Play for Fun gaming page, which was launched in September 2000, allows members to sharpen their skills at blackjack or learn to play other casino favorites such as roulette. According to Harrah’s, more than 30,000 users visited the virtual casino in July, spending an average of more than 23 minutes per visit.

David Norton, vice president of loyalty marketing, says that although other virtual gaming sites are popping up all over the Web, he believes that Harrah’s will thrive. More important, the site will help cement the users’ relationship with the resort, Norton says. "The games introduce them to other things. Things like promotions and hot deals, and it gives them an incentive to come to one of our properties."

Over the long term, the virtual casino should help Harrah’s build a better customer experience for people who visit the casinos, says Tim Stanley, vice president of IT development.

"As we implement an even more personalized experience on the website, we would also expect to utilize customers’ product preferences to tailor their experience on and offline," Stanley says. "That info can come from both their actual activity and preferences demonstrated on the casino floor?as well as from data learned from Play for Fun."

And if and when online gambling is ever legalized in the United States, Harrah’s Entertainment no doubt will have a healthy piece of the action.

Maximum Exposure

One lesson learned by all organizations that put online games to work is this: The greatest online game ever invented won’t do a thing for you if no one is playing it. So many companies turn to game portals such as San Francisco-based Shockwave.com, another Web Business 50 winner, to promote and host their games. Shockwave.com and its sister site, Atomfilms.com?where users watch animated and live film shorts?lure more than 24 million visitors per month and lay claim to 60 million registered users. On any given day, Shockwave.com sees between 600,000 and 700,000 unique visitors.

In addition to selling subscriptions for users to play some of its games, Shockwave.com earns money by developing and promoting games for others. Real Pool, a popular and free online game of pool that was developed by the Groove Alliance and is hosted by Shockwave.com, is sponsored by Jack Daniel’s whiskey. According to a white paper written by the marketing company KPE, external banners placed around the game generated a CTR of 0.42 percent. Meanwhile, the ads embedded in the game saw a CTR of 2.2 percent.

Incorporating logos and branding messages in content is becoming more popular because players tend to play a game more than once, thereby offering the advertiser multiple opportunities to reach the player, says John Welch, vice president of games and product development at AtomShockwave.

"Games work because of the interactivity and the long time of exposure and repeat exposure," Welch says. "People will come back to play again and again. It’s an opportunity to drive different stages of a campaign."

Dearborn, Mich.-based Ford agrees. The automaker coproduced three short films with AtomFilms to promote its new Focus line of cars, then turned to Shockwave.com when it wanted to develop a game to turn the buzz up a notch?and DJ Fu Wax Attack was born. Players control DJ Fu, the main character, and navigate urban surroundings (populated with Detroit landmarks such as the Ambassador Bridge) as they collect and spin records and knock off bad guys with a series of kung fu punches and kicks. Ford billboards scroll across the screen in the background as DJ Fu advances. When he successfully completes a level, a Ford Focus ZX3 takes him to the next one. Bob Fesmire, Focus marketing manager, says he knew the game was fun but wasn’t sure how to get it in front of its target audience of 16- to 24-year-olds. Then he found Shockwave.com, and from June to September the game has seen about 700,000 plays at its original Ford address, www.focus247.com, and nearly 3 million plays at Shockwave.com. As a result of this success, Ford and Shockwave.com are negotiating a sponsorship deal for a DJ Fu sequel, which would be an industry first.

"What we’re always looking for are new and unique ways to connect with our consumers and expand the Focus brand," Fesmire says. "It’s kind of a cutting-edge area. It’s certainly where our target consumers are. You bring all of those things together and it makes sense."

Game (not) Over

The numbers suggest that like the Internet, games are here to stay, not only as an entertainment medium but as a medium for advertising, branding, learning and teaching.

Game developers such as Keith Ferrazzi, the president and CEO of Los Angeles-based game developer YaYa, which has helped design games for GM, IBM, Pepsi and others, are wide-eyed about a future where online games will become more intense and rival or even exceed those played on PCs and game consoles.

"It’s an area that’s found its sweet spot on the Net. Games are used more and more for education, marketing and pure entertainment value," Ferrazzi says. "I believe we are just seeing the tip of the iceberg."

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Copyright © 2001 IDG Communications, Inc.

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