Gotta Catch ‘Em All

For those living under a rock, the Pokémon franchise first appeared in the mid-nineties, managed by The Pokémon Company, itself a collaboration between game developers Nintendo, Game Freak and Creatures. The basic premise sees fictional creatures, known as Pokémon, caught and trained by humans, known as Pokémon trainers, for sporting purposes. The franchise is extremely lucrative, sitting behind only Mario in terms of video game-based franchise value, having spawned numerous video-games, television shows, films, toys, trading card games and comic books.

In a matter of days, Niantic, developers of the hugely popular Pokémon Go mobile game achieved what the First Lady of the United States, Michelle Obama, could not. That is, motivating around 21 million youngsters into leading a healthy lifestyle. For the last six years Obama tried through her ‘Let’s Move’ initiative, but evidently all that was needed to stir up real motivation amongst couch potatoes was the chance to become a real-life Pokémon trainer. By harnessing mobile GPS technology and augmented reality, Pokémon Go intuitively encourages players to get up off the couch and actively search for virtual Pokémon superimposed upon the real world.

The Pokémon Go Business Model

Primarily based upon the oh-so familiar free-to-play business model, Pokémon Go relies heavily on revenue brought about by the willingness of eager players to spend their cash in pursuit of high scores and game completion. In-game purchases are huge business, with Euromonitor International predicting the global market to grow by 20% and reach £22.5 billion in 2016.

To demonstrate how the system works, first consider the in game currency, known as Pokécoins, which are required to purchase additional in-game items such as 100 extra Pokéballs. Pokécoins are primarily garnered naturally through game progression or alternatively impatient Pokémon trainers amongst us can purchase Pokécoins instantly using real life currency. The going-rate for 100 Pokéballs currently stands at 460 coins, and clever pricing strategy ensures Pokécoins are only available for purchase in batches of 100 at 79p, 550 at £3.99, 1200 at £7.99 and so on. Therefore, assuming you have zero Pokécoins, in order to acquire the extra 100 Pokéballs quickly and basically decrease the game’s difficulty, £3.99 must be spent on 550 Pokécoins. It then comes as no surprise that this strategy catapulted Pokémon Go to the summit of Top-Grossing app store charts in a matter of days.

Attracting The Interest of Marketers

Marketers quickly realised that Pokémon Go may be the perfect vehicle for advertising considering its potential audience. First of all, an established fan base of former child gamers who grew up playing Pokémon are attracted back for nostalgic reasons. On the other hand, a new wave of children born after Pokémon’s initial burst of popularity find themselves wanting to engage in the latest augmented reality technology, despite a lack of familiarity with the Pokémon brand. Finally, Pokémon is no longer restricted to a limited console audience, instead it now exists on a near-universal platform, the smartphone.

In truth augmented reality is not an entirely new concept, exemplified in the last couple of years by car manufacturers making use of the technology to show off shiny new cars in AR showrooms. Yet what particularly attracts marketers this time around is the adoption rate of Pokémon Go amongst consumers. Never before has a new product launch gained 100 million global users so quickly. To compare, Candy Crush took fifteen months to reach that milestone, Pokémon Go took just six days.

Taking Advantage of a New Marketing Tool

Smart business owners have already started to leverage in-game items to generate more footfall to their businesses. A popular example involves the purchase of Pokéstop ‘lures’, which have the effect of increasing the amount of Pokémon at a location for thirty minutes, and more Pokémon to catch means more Pokémon hunters to hopefully engage with the business. Other institutions have taken a more traditional approach by simply erecting signs outside their doors advertising the large amount of Pokéstops available on their premises. Surprisingly, Mercedes have gone so far as to distribute manuals to staff detailing how exactly a dealership can utilise ‘lures’ as part of a vehicle sales campaign. A word of warning for Mercedes, yes ‘lures’ will increase footfall, but do not be surprised if dealerships are overrun by mostly spotty teenagers searching for a Pikachu rather than a brand-new SLC.

Google owns an interest in Pokémon developer Niantic, thus Pokémon Go capitalises on Google’s advertising model, which is well trusted amongst marketers. Unsurprisingly Google’s involvement sees key game mechanics rely heavily on Google Maps, in such a way that is unique for marketers. Traditionally, display advertisements in mobile games are known to disrupt the user experience, but Pokémon Go offers an entirely fresh approach involving sponsored geo-locations. The idea of actively encouraging users to interact with a brand via sponsored locations has the advantage of not only protecting the overall Pokémon Go user experience, but adding to it with the incentive of in-game rewards.

At present, sponsored locations are sold to advertisers with a pay-per-visit model in mind, similar to Google’s pay-per-click search advertising strategy. Niantic gains an additional revenue stream, and in return advertisers hope a paid opportunity to feature prominently upon the game’s map drives customers towards their brand. Suggestions of higher ad rates revolving around rare Pokémon packages may also come to fruition, an idea designed to further increase the incentive to visit a certain location. Alternative methods interesting advertisers include sampling at Pokémon ‘gyms’ and the use of discount coupons collected in-game, then redeemed via smartphone at point-of-sale.

The Risk of Upsetting Consumers

A Pokémon tracking feature obviously presents a huge timesaving shortcut for a game focused on physically searching your nearby surroundings. Many enjoy the idea of collecting Pokémon but simply do not have the time or inclination to search unaided. For precisely this reason Niantic included the ‘Nearby’ feature, designed to help locate Pokémon lurking close by. Unfortunately, players found the feature to be confusing and unusable. Niantic reacted by removing ‘Nearby’ completely and proceeded one step further by shutting down all third-party tracking apps. As angered players requested refunds for in-game purchases in their droves, Niantic was forced to perform a U-turn by introducing a new tracking feature called ‘Sightings’. Although only the most dedicated fans are affected by a lack of tracking feature, Niantic risked losing the backing of advertising partners whose aim of utilising Pokémon Go as a marketing tool is to capitalise on its highly targeted audience. Hopefully Niantic’s latest update goes some way to repairing their damaged relationship with hardcore Pokémon fans, which in-turn keeps advertising partners happy.

Security Concerns Spark Debate

Citing security concerns, Iran recently became the first country to completely ban the use of Pokémon Go, yet the exact nature of such security concerns are not yet known. Iran’s regulatory body overseeing online activity, the High Council of Virtual Spaces, has a history of implementing restrictions on internet usage, echoing the sentiment of many other Middle Eastern countries. For instance, a leading Saudi cleric has urged his people to abandon Pokémon Go because the game contains un-Islamic ‘forbidden images’, in addition to violating an Islamic ban on gambling. Further reasons for prohibition in the Middle East include blasphemy (promoting the theory of evolution), and an objection to the use of symbols and logos of ‘devious religions and organisations’.

News of a Pokémon ban throughout emerging markets will not please marketing executives at top brands whose purpose it is to increase worldwide exposure. When it is possible for a potential audience to shrink overnight, alarm bells will surely ring, as cost-effectiveness is key.

Beyond the Middle East, safety fears have sparked worldwide after a number of incidents directly involving the use of Pokémon Go. Avid Pokémon trainers are becoming wrapped up in augmented reality to the point of forgetting about the real word around them. The most high-profile reports include two men falling off a cliff in California, a man crashing into a parked police car in Baltimore, a boat stolen in Liverpool and a teenager killed in Guatemala. Unfortunately, what was once an exciting and unique opportunity has soured somewhat because brands will not willingly advocate a game that can be construed as dangerous, and neither will they want to absorb the negative effects gained by association.

For every negative story reported there exists an inspiring story, so advertisers need not worry too much. The latest comes in the form of a BBC report claiming that the game should be commended for transforming the life of a teenager suffering from autism. Apparently blurring of real and virtual reality assisted in breaking down the social barriers usually experienced by autistic people.

Don't Get Left Behind

Following the viral success of Pokémon Go, marketers should look to create their own unique AR experiences and capitalise on a growing trend. Presumably, Hilary Clinton of all people sees value in such a proposition, as seen by her cringe worthy attempt at referencing Pokémon Go at a recent presidential rally. In her speech the presidential candidate joked of an app entitled ‘Pokémon Go To The Polls’. Ten out of ten for creativity, five out of ten for execution.

In recent times it could be said that Nintendo has done it again. First the Wii game console changed the way we played games with its innovative motion-based controller, now Pokémon Go has influenced gaming habits once more. To top it all off, rather than a fad or even fashion, the latest version of Pokémon has evolved into a game changer for the marketing industry too.