May 3, 2001 11:10 AM PDT

Major brands play for attention

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We've all heard of infomercials and advertorials. But advergaming?

A list of who's who in advertising is attempting to make Web visitors familiar with the concept, if not the obscure term describing a cross between advertising and online games.

Like the public service-style bulletins meant to sell more products, advergaming seeks to attract similar attention--but by appealing to the child in the consumer. A manufacturer could send a branded game via e-mail to potential customers inviting them to play to win prizes or just experience a new product line. The game could then pass from friend to friend via e-mail.

Nike, Burger King, General Motors, ESPN, Pepsi, Nickelodeon and Paramount like the idea and are lining up to create such games in homage to their products using technology from Los Angeles-based start-up Yaya.

Nike is planning to launch a hoops game in June featuring its Nike Shox shoe line. Ford of Canada recently invited car enthusiasts to "race on the moon" in a game promoting its new compact sports utility vehicle, Ford Escape.

Such marketing is part of a broader campaign to wake up consumers to online advertising. Web visitors fell asleep to banner ads long ago, clicking on standard banners only four times for every 1,000 ads shown. The slack attention, and a downfall in ad spending, has prompted Web publishers and advertisers to experiment with the Net's flexibility.

Earlier this year, CBS MarketWatch began running "wallpaper ads" with Budweiser logos plastered across its data pages. CNET, publisher of News.com, started displaying larger, interactive ads on its pages. Salon.com, Yahoo and The New York Times followed suit. Now, manufacturers are beginning to play with interactive games.

"Interactivity is a big hook," said Van Baker, vice president in e-market intelligence at research firm Gartner. "Anything that is engaging for the consumer will make the ad more appealing by definition.

"It's a natural evolution of advertising, but whether they have the ability to sustain interest is under question."

Marketers have long tested games within ad banners and Web pages in hopes of creating stronger relationships with customers. Despite endorsements from several major brands, efforts to date have brought weak results.

Jim Nail, senior analyst at Forrester Research, said that Hewlett-Packard introduced a game for one of its products years ago but found it failed to entice consumers to buy anything.

"I'm not sure games impact purchase decisions, but they may impact brand attributes," Nail said. He added that marketers must ask themselves what they're trying to achieve and how they plan to measure success, since a game could be costly and produce little results.

Playing for success
At least Torrey Galida, vice president of general marketing at Ford of Canada, is a believer. He said response rates to the game are "off the charts," garnering "click" rates up to 40 percent. The game, sent via e-mail to Ford enthusiasts, challenges players to race around a lunar track to rack up points. The player with the highest score at the end of the week wins a two-year lease on a Ford Escape.

"I've been frustrated over the last couple of years with the performance of banner advertising," Galida said. "The car is supposed to be fun and accessible and exciting--the game allows us to accent that brand positioning in a way that's interactive, which we weren't getting with other online advertising."

The majority of people who played the game said they would like to receive more information on the car. "This was the most important result," Galida said.

The game's developer, Yaya, is a year-old company with investments from Michael Milken's educational venture, Knowledge Universe and Entertainment Media Ventures. It developed a proprietary technology to create two-dimensional and three-dimensional promotional games that can be embedded in a Web site or in e-mail, although Yaya's production manager acknowledges that they run better on a Web site.

Low-bandwidth Macintoshes or PCs can run the games; however, they're best viewed on a system running a 3D accelerator, which gives it "PlayStation-quality graphics," according to the company.

Research firm KPE, which introduced the term, advergaming, wrote that games "encourage customers to provide rich and valuable information through registration and game play."

One key enticement for offline brands is the games' viral nature. When they're sent via e-mail, players can pass them on or challenge a friend to play. A database keeps track of scoring and consumer game choices. Nike, for example, could keep count of how many consumers choose to wear a green shoe over a blue shoe and use this intelligence in product development.

"The most valuable form of marketing that exists is peer-to-peer marketing, when friends market to each other," said Yaya CEO Keith Ferrazzi, formerly chief marketing officer for Starwood Hotels.

Ferrazzi sees a fortune in the popularity of games online. Nearly 45 million people will play online games this year, and more than 68 million are expected to do so by 2003, according to Jupiter Media Metrix. Advertising revenue for such games is expected to reach more than $1 billion in 2005.

Especially with the advent of interactive television, marketers are taking the temperature of advertising when consumers can simply fast-forward over commercials, Ferrazzi said. He said that Warner Bros., Walt Disney, and Cox Communications are interested in online games that promote products to partially remedy to this problem.

Major brands such as Nickelodeon, Burger King, Paramount and Nike have already worked with the company to develop promotional games, Ferrazzi said. Honda, General Motors, and Pepsi are a handful of others in line to introduce a game, which can cost hundreds of thousands of dollars to develop. A game developed for the Korean World Cup cost about $400,000 to create, he said.

 

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