Unless you’ve been under a rock for the last week, you’ve undoubtedly heard of Pokémon Go – the latest viral app. The idea is that users explore their surroundings to hunt and capture Pokémon. People chase the cartoon creatures at “pokéstops” and “gyms” plotted on a customized version of Google Maps, navigating to their real-world locations using their smartphones. As of Monday, July 11th, the game was seeing about 21 million daily active users, (for comparison, at its peak Candy Crush reportedly had about 20 million daily active users). Nintendo’s new virtual reality smartphone game has only been officially released in the United States, but Canadians are managing to play the new Pokémon game through a couple different workarounds.
It’s even one of the top searches according to Google:
One thing to look at with the advent of any new technology or social platform, is what is the impact for advertisers? Pokémon Go is a free app, but users pay in data. The developer behind Pokémon Go is planning to allow retailers and other companies to sponsor places on its virtual map.
“There are several ways that we see the potential for significant monetisation of Pokémon Go by Nintendo, and one of them is certainly the potential for paid advertising or paid deals that encourage players to come to a particular building or store. It is a huge opportunity,” said Atul Goyal, analyst at Jefferies.
In an interview with the Financial Times, John Hanke, chief executive of Niantic, which developed Pokémon Go, hinted that similar advertisements would soon be coming to Pokémon Go.
Alongside in-app payments, “there is a second component to our business model at Niantic, which is this concept of sponsored locations”, Mr. Hanke said, where companies “pay us to be locations within the virtual game board — the premise being that it is an inducement that drives foot traffic”. Advertisers are charged on a “cost per visit” basis, similar to the “cost per click” used in Google’s search advertising, he said.
Some car dealerships & local businesses have already found that positioning a pokestop on their premises has driven a rush of traffic. According to the New York Post, one pizza restaurant in Queens saw business increase 75% after buying a $10 in-game power-up that lured Pokémon to its location.
Robert Drews of Mile High Motors implemented a program to reward players. He created a Facebook graphic to promote oil change discounts, with savings that correlate with your level on Pokemon Go (Level 5 = $5 off, Level 10=$10 off etc). Within the hour he had over 32 shares and 125 likes. Creative dealers could also open their service departments as hunting grounds, or see if their location is a “Pokestop” and use that to buy lures and entice customers to visit.
Pokemon Go could become a very powerful advertising tool in a short amount of time. Since this technology is so new, jury is out on the financial impact, but we cannot wait to see how progressive dealers use tools like this to bring in more business.