What Pokémon GO means for marketing: CIM

pokemon_10_2211dd8d49adf154a386294fb279204b-nbcnews-ux-320-320The augmented reality game is one of the stories of the summer, but it’s more than a passing fad.What connects a recent spate of local news stories about suspicious-looking teens being apprehended by the police, a stampede in New York’s Central Park, churches reimagined as ‘gyms’, a dead body discovered in a river, and a spike in the trade of online accounts?

It’s Pokémon GO, of course – the location-based, augmented reality (AR) game taugust_wk_2_2016_pokemon_go_exchangehat re-boots the original 1990s Nintendo Game Boy brand for the mobile age. Launched in early July, and an instant hit worldwide, Pokémon GO has generated innumerable news stories, and opinions ranging from proclamations that it is the best game ever to scaremongering safety warnings. Pokémon GO could be decried as nothing more than a classic news story for medialand’s ‘silly season’. But its success could prove more insightful for marketers than other recent summer crazes, such as 2012’s Gangnam Style dance and viral videos, or even 2014’s Ice Bucket Challenge (which has actually gone on to provide funds for some valuable scientific research). Before dismissing the game as a passing fad, consider the following:

AR becomes a reality

Until now, perhaps the biggest story about AR in the minds of the public has been one about an expensive failure – Google Glass. Useful applications of AR tech, such as Volkswagen’s app for car mechanics, have mostly remained under the public radar. Pokémon GO has changed this. Within a couple of weeks of release, 75 million people have downloaded the app worldwide, 20 million of whom are active users – and all without a big-budget ad campaign. The uptake has been unprecedented. In the short term it’s likely that imitators will stake their claim for a share of the new AR gaming market, but the cultural impact might be much greater: the use of AR – for example, in educational and lifestyle settings – might suddenly make sense to consumers, and that potential will drive further innovation and funding. Pokémon GO might come to be seen as AR’s tipping point.

Next-level freemium

Pokémon GO is free-to-play. Niantic, the developers, have literally given it away. OK, so this is hardly a novel strategy – Candy Crush Saga made a success of a freemium model in 2012 – but Pokémon is surely the most high-profile example of its kind to date. The value proposition of such a big hit is clear, but when it comes to monetization the game is again pushing boundaries. The freemium model, where users can download the game for free and then choose to make in-app purchases to fuel additional gameplay, will only drive so much revenue. Ads will bring more. Sponsored locations, however, where local businesses can pay to become real-world destinations for virtual-world gameplay, could also provide a huge opportunity. It’s a game-changer.

High street brands

Small businesses have already leapt at the chance to join in the fun, setting themselves up as ‘Pokéstops’ to attract the virtual monsters and in turn drive customer traffic in stores and restaurants. It’s cheap and perhaps effective in the short term, but after the ‘Pokébuzz’ volume drops, we might find that the high street has found in AR a way to reinvigorate itself. What is certain is that the big brands have already taken note. At the end of July, McDonald’s in Japan became the first brand to sign a sponsored location deal in which its restaurants will become PokéStop and Pokémon ‘gym’ sites. If the deal shows itself to have legs, similar brand tie-ups are likely to become a familiar part of the marketing mix in the coming years.

Tried, tested and fun

Of course, sceptics will say all this is just a fad – we’ll witness a Pokémon Christmas with Santa delivering all kinds of ancillary branded merchandise… and then consumers will move on to the next big thing. Perhaps. Meanwhile, everyone can argue whether this really does signal the often-predicted dissolving of the divide between real and virtual worlds, or that in getting players outdoors Pokémon has finally made gaming a healthy pastime. For marketers, however, there is a simple underlying truth about the game’s success that should not be forgotten. The principles of Pokémon GO have been tried and tested over centuries. It’s part treasure hunt, part I-Spy, part orienteering. What’s more, the ROI for users is undeniable. It’s free! It’s fun! And if you can make something free and fun, then you’re onto a winner.

Martin Bewick, Chartered Institute of Marketing

Can Virtual Reality Produce Real Travel Sales?

Looking for a competitive edge, pioneering destinations and travel industry suppliers are utilizing virtual reality to create compelling sales tools that help increase sales and profits.

Companies like YouVisit are producing 3D, 360-degree views of real-world surroundings for a variety of travel destinations, cruises, and hotels, helping those organizations market themselves to prospective travelers.

“We’re changing the way travel suppliers and agents use virtual reality,” said Abi Mandelbaum, CEO and co-founder of YouVisit. His company has been developing virtual-reality experiences for more than six years, including work for Alaska, Croatia, and Carnival Cruises. To create a VR film, videographers capture images from all angles. The footage is then digitally stitched together to create the final “immersive” product.

In a travel marketplace saturated with competing advertising and marketing, utilizing technology to grab a prospective client’s attention can be a major differentiator, and help close a sale, Mandelbaum says. Travelers tend to think that “if a supplier is on the cutting edge of technology, it will offer a cutting-edge travel experience.”

Ultimate Jet Vacations (UJV)—a boutique Miami tour operator —is using virtual reality experiences produced by YouVisit to grow its business and help hotels market their properties, “We find that it’s a unique and fun way to promote our properties. Agents, young and old, have fun with it and remember the experience,” said managing partner Steven Kadoch.

For Ultimate Jet, YouVisit booked camera crews to travel to one of their top suppliers, an upscale resort on the French Riviera. Kadoch said he is working on building a portfolio of VR tours for his top-selling resorts. “Then, when we visit our travel agency partners, we take a VR headset and ask them: ‘Have you been to Nizuc Resort & Spa yet? No? Here, put these on and take a tour!'”

Matoke Tours, an African travel tour operator, produced a “Virtual Gorilla” travel brochure, featuring six travel offerings in Uganda, which can be accessed on their website. “This app enables us to convey the intensity and emotion of the travel experience before the journey has even started,” said Wim Kok, director of Matoke Tours Uganda, in a press release launching the virtual reality tour. “Travelers are then better able to decide which excursions they want to book.”

Last year, Thomas Cook Travel teamed with Samsung and YouVisit competitor Visualise to create a series of short films of several destinations for customers visiting its U.K., Germany, and Belgium stores. Visualise claims the films generated $17,500 in flights and hotel bookings in the first three months of the campaign.

YouVisit measures customer online viewing time for its clients’ VR experiences. “We’re seeing an average time spent of over 10 minutes,” Mandelbaum said, and more importantly, a customer conversion rate of more than 13%.

YouVisit has created more than 1,000 virtual experiences around the globe, most of which are interactive, including more than 300 in the travel sector. The company has been working primarily with travel destinations and hotels, as well as cruise lines and other attractions.

A video doesn’t come cheap.  A basic YouVisit package costs about $10,000. But as VR camera technology improves, and more players manufacture camera equipment, that price will drop, experts say. For example, Google recently teamed with GoPro to produce Google Jump, a circular device that holds 16 GoPro cameras for capturing virtual reality video. Samsung is experimenting with its Project Beyond camera, a virtual reality video camera capable of live-streaming footage.

Facebook owns Oculus, a VR firm that recently released its first commercial VR headset, the Rift, which retails for $599. While high, that price hasn’t stalled demand. Facebook began taking preorders for the Rift in March and sold out all of its production run for the month.

Google recently released Google Cardboard, a lightweight viewer that retails for as little as $15 online. The Cardboard can be emblazoned with a company’s logo, and has high-quality lenses that transform VR content on a smartphone into immersive experiences.

Ultimate Jet uses both Oculus Rift and Google Cardboard, Kadoch said. Matoke Tours leverages Google Cardboard as well, while Thomas Cook customers in the U.K., Germany, and Belgium use Samsung’s Gear VR headset.

Marriott Hotels & Resorts also has used the Samsung VR Headset as part of its VRoom Service kit. Guests can borrow a VR device and experience “VR Postcards,” where the users can visit destinations around the world.

There are expected to be 2.3 million total U.S. VR headset sales in 2016, according to Greenlight VR and Road to VR. The two firms, who just released their “2016 Virtual Reality Industry Report,” forecast that number to grow to 136 million in 2025.

For agents thinking high-tech sales are only for the young, Kadoch offers his personal experience. “I think VR has no barriers when it comes to demographics. We’ve had 70-year-old travel agents hold us up in meetings for 20 minutes because they don’t want to take the VR goggles off,” said Kadoch, who doesn’t describe himself as “tech friendly.”

In fact, he relied on his team members to help him take the plunge into Virtual Reality films and marketing.  “When I saw how excited they were about VR, and they slowly walked me through it, I became a big fan.”

Source: Can Virtual Reality Produce Real Travel Sales?