Mobile platforms are rapidly developing markets that will continue to be of interest to marketers in the future. Data from comScore shows that the number of total of mobile device users has outpaced the number of desktop users worldwide for the past few years.
As generations raised on Internet 2.0 technology continue to rise in numbers, so too will the prominence of mobile devices. If mobile use trends continue to outpace desktop use, marketers will need to place more importance on understanding these platforms and delivering valuable content to consumers in these spaces. However, the strategies that we employ for mobile internet use will likely not be as engaging when translated to a mobile app strategy. For those who do not understand mobile app strategy, this raises many issues, as Nielson researchers report that mobile use time is approximately 89% app usage and 11% mobile web usage. To highlight the differences in creating engagement with a mobile app vs. mobile internet, I want to examine an app that I think has been handling its marketing well. While it is still less than a year old, I think that Pokémon Go offers marketers some valuable insight into the potential of apps for engaging consumers.
Pokémon Go is the joint creation of Niantic (a company that is known for its augmented reality game Ingress) and the Pokémon Company. Like Ingress, it is an augmented reality game where players advance through a map overlay of their current location by walking in real life. The objective of the game is to catch Pokémon, which appear at somewhat randomized locations on the map, and also to battle the gyms of opposing teams. The hype surrounding the game, even before its launch, propelled it into the media spotlight and made Pokémon Go one of the most successful apps of all time. On the first day of launch the app had already achieved 6 million downloads and only one month later, in August of 2016, had generated an estimated $258 million in revenue from in-app purchases. At the height of the game’s popularity, it had over 20 million daily players. As of September 2016, the app had in excess of 500 million downloads and is currently earning about $2 million per day.
The majority of the money generated by Pokémon Go comes from in-app purchases; items that make certain aspects of the game easier to play, but do not give most players an unfair advantage.
However, this is not Niantic’s only source of revenue. Shortly after launch, Niantic began creating sponsored Pokéstops; a twist on traditional advertising in a sense. Pokéstops are important locations in the game as they allow players who are within range of them to stock up on a limited number of essential items for free. Stops are linked to interesting in-game locations, such as statues, buildings, and historical sites, which helps facilitate the exploratory nature of the game. Companies, such as Sprint, Starbucks, and Boost Mobile paid Niantic to have their U.S locations become Pokéstops. In my opinion, this creates much more engagement than a traditional banner advertisement, because 1.) it plays into the mechanics of the game and 2.) because in order to get the reward of free items, users need to be physically near a store location, which leads to increased foot traffic. This creates value for both the company and the user, as the advertising is low pressure, relatively unobtrusive, and it allows players more opportunities to get needed items. The companies, on the other hand, have found a unique way to engage a large, young (mostly millennial) audience.
In addition to sponsored Pokéstops, Niantic occasionally sponsors special events. One popular event increased the amount of a certain rare Pokémon, Lapras, in a small area. The idea was to use increased spawn rates of rare Pokémon to drive tourism in the Tohoku region of Japan. The Tohoku region was hit particularly hard by a tsunami years ago and is still in the process of rebuilding. As this was a charity event, Niantic reportedly refused to accept payment for their efforts, however, it still cost the region approximately $280,000 to host and market the event for 11 days, but by most measures the money was well spent. Approximately 100,000 tourists from around the world visited the Tohoku region over the course of the event and their increased spending (though they knew it was for a good cause) raised about $17.8 million to help rebuild the cities in the region. While this event was charitable, it demonstrates the power of a single app to bring people together and create positive social interaction. The event was not sponsored by any particular company, but in the future there is potential for players to see similar events hosted by marketers.
From creating unique marketing opportunities within the crowded app space, to creating real social value for consumers, I think that Pokémon Go is a great example of an innovative app, which showcases the potential for leveraging emerging technologies within the mobile industry. The game has generated massive amounts of location data and details about consumer travel habits, but this is currently not being used outside of Niantic. Three months after the game launched, Niantic claimed that the app had tracked a whopping 4.6 billion kilometers of walking distance, which increased to 8.7 billion in December of 2016. A lot of gamers, who may otherwise be sitting on the couch playing their favorite games, are now getting outside and staying active. An interest in the longevity and happiness of a company’s customers is not just good business, it’s good ethics.