As Pokémon fans all over Japan finally got their hands on the popular smartphone app this weekend, Niantic and McDonalds trialled their potentially game-changing sponsorship model.
Since it first launched earlier this month, PokémonGo has dominated headlines. We’ve seen Pokémon-related accidents and crime, anecdotal reports of the game’s mental and physical health benefits and, most importantly for its creators, record breaking financial success. It topped US sales charts in 13 hours and added over £5bn to Nintendo’s market value.
Currently the augmented reality game makes its cash through micro-transactions alone, with its millions of users worldwide reportedly spending an average of $1.6 million daily.
But relying on user spending alone is not the extent of Niantic’s strategy. If the McDonald’s sponsorship is a success, we will likely see the partnership rolled out to PokémonGo’s global audience and replicated with other brands.
This week McDonalds became the game’s first official sponsor, with a business model based on in-game content exclusive to real life areas. The idea behind this is to drive foot traffic to certain locations.
Currently, users travel to find a variety of Pokémon characters which they then battle against other players in the game’s ‘gyms’. These gyms are in set locations, so in order to play the game and defeat a gym, users must travel to find one and stay there for the entire battle.
In the case of McDonalds, the deal sees 3000 restaurants all over Japan become gyms, which in theory will drive players to the fast food outlets.
If sponsored locations do prove to be successful, we will most likely see this idea rolled out globally in the near future.
Local Marketing and Lures
Location sponsorship involves a complex partner relationship that will change the location of important game mechanics and possibly brand these inside the game. There are however plenty of companies already taking advantage of this idea at a more basic level.
The game’s Pokéstop mechanic can be enhanced so that more rare characters appear when players are around the physical location. Users can do this by purchasing ‘lures’ from the game’s menu of micro-transactions and placing them on the ‘Pokéstop’ locations.
Many small businesses have inadvertently found themselves beside a Pokéstop, and for retail stores, restaurants and bars that rely on foot traffic from 18-34 year olds, lures are a great unofficial way to use the app to bring in new customers.
This has included companies buying the lures from the game and then either advertising through social media or relying on player’s spotting the location on their screens – which shows up as highlighted to all players when a lure is in use.
Of course, having users travel around with the application open is valuable in and of itself. One of PokémonGo’s greatest assets is its millions of daily users and the GPS data they volunteer.
The game is designed to reward players for travelling around with the app open on their screen. It does so mainly through Pokéstops, real life locations that give out free items when swiped in game, and Eggs, in game items that activate after you walk a certain distance with the app open.
The result is users are inclined to leave the application running as they travel, meaning the game has access to their location and can record habits based on visits to these Pokéstops. That geographic data, together with the basic demographic information volunteered by every user, is incredibly valuable and has all sorts of implications for precise, targeted marketing campaigns.
Access to this data gives an exceptional understanding of the game’s users and their behaviour. Brands are already using the smartphone app’s success unofficially to target this audience with offers and services aimed at a similar demographic.
Virgin gym in London recently announced Pokémon workouts, where trainers lead groups along a route designed for catching the pocket monsters during interval training. Theming their service around the game allows them to target young professionals with a USP they can’t find at other gyms.
Similarly, T-Mobile has offered customers who download their app unlimited data until August 2017, as well as entering them into a draw to win Pokémon themed prizes.
The game has experienced phenomenal popularity and has dominated both headlines and social media trends in recent weeks. Even mentioning the game in marketing efforts can offer free viral publicity and target a very clearly defined audience.
Currently Niantic do not fill their games with advertising banners or force players to watch adverts to unlock content, both of which are strategies common with similar free-to-play games.
But there are ways in which they can feature advertising within the game without taking up space on the navigation screen or irritating users.
The game is designed to track players via GPS and displays their location on a map of their area. Because of this, advertising could be as simple as having near-by places to eat or shop marked on the player’s map.
If the location sponsorship currently on trial in Japan is a success with McDonald’s, it could see the brand’s restaurants across the world marked with golden Ms on the smartphone screens of millions of players.
Currently there is a feature that tells users if they are in the vicinity of certain Pokémon by displaying their picture in the corner of the screen. It is easy to see one of these slots taken up by a hamburger to denote a nearby McDonalds.
But will the popularity of PokémonGo last?
Whether we see the sponsored location strategy hit other markets depends on McDonald’s success in Japan, but it is also reliant on the game’s ability to maintain its player base.
Nintendo’s last mobile game Miitomo quickly rose to the top of the free to play charts, but it failed to retain its user base and dropped below 60th in the first two weeks. Meanwhile, Pokémon was released three weeks ago in several major markets and it continues to dominate the charts.
Updates to the game’s content and mechanics teased by Niantic at this weekend’s San Diego Comic Con might keep players hooked on app for now, but its continued success is completely reliant on the viability of these updates if they are to hold on to those impressive daily user stats.