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July 20, 2016
Pokemon Go App Icon on iPhone

Businesses Excited for Pokemon?

A blast from the past: Pokemon is back and businesses could not be happier.

If you have not downloaded the game, we are sure you have seen people playing it. People walking with their heads down, glued to their phones, searching to catch the next Pokemon. We are talking about the new hit game Pokemon Go, which saw Nintendo’s stock rise up 50% only within a few days. The new app has taken over the gaming world with both old and new generations playing. The former google startup, Niantic raised $20 million in investments from Google, Nintendo and Pokemon Co. and has seen $1.6 million in revenue each day since the release on July 6. All while the app is free to download, unless you want to purchase PokeCoins that allow you to purchase useful items and upgrades. Pokemon Go has forced players to get outside to search for Pokemon, meet up at local “gyms” or specific locations to battle other Pokemon gamers, and receive eggs that hatch only after a certain distance walked. The game has sparked the attention of local businesses in regards to marketing. As Pokemon Go has not provided any in-app advertising, this has not stopped businesses to persuade potential customers from walking into their store.

The marketing for local stores is endless with the game providing many of the hot spots located in or around businesses, which allows them to promote deals or any other creative ideas from the constant traffic. Store owners are also taking advantage of the game by purchasing “Lures” – that is a feature of the game that attracts more Pokemon towards a certain area. They do this in hopes of reeling in more customers, some using signs that say “Pokemon for paying customers only.” The New York Times stated that a pizza shop in New York purchased a Lure for $10 to see a 75% increase in business. While a few businesses have embraced the game and seen increased success as a result, others are trying to keep the gamers out of their store.

As the game becomes a cultural phenomenon and businesses are creating their own marketing techniques, paid advertisers are itching to get their opportunity. Pokemon Go Chief Executive Officer John Henke, of the Google-funded Niantic, has expressed his interest with including advertisements into the game. Hanke intends to give retailers and other businesses an opportunity to sponsor locations on Pokemon Go’s virtual map, which would allow businesses to pay Niantic for a spot on the map to drive foot traffic. Hanke told The Financial Times that “sponsored locations” could provide an additional revenue model, and advertisers could pay per visit; similar to pay per click on Google’s search ads. Niantic has dealt with a similar virtual reality game, Ingress, that allowed sponsored locations to provide portals to specific locations within the game. Brands like pharmacy Duane Reade, Jamba Juice, and Zipcar have paid to sponsor Ingress portals aiming to encourage more customers.  Although sponsored locations sound like a great opportunity, in-app adsmay not be the same case if not done right.

As it would not be the first mobile gaming app to provide pay per visit advertisement, the difference is Pokemon Go has 10 million daily players. The cause of concern is the overabundance of ads hurting the game as the creators do not want to dissuade gamers with pop-up ads and videos making the game too commercial. This has forced the creators to be careful with how they proceed with in-app advertising. Once as popular as Pokemon Go, Angry Birds may be an example for successfully integrating advertisements in a mobile app game. Through native ads, Angry Birds developer, Rovio, was able to run a full State Farm Insurance campaign inside their new game: Angry Birds Go! Part of the game was the State Farm power-up that players could unlock when racing. As the ad meant for an accomplishment and not an interruption, it proved to be a positive image. The campaign was a success as it had more than 240 million impressions and in-game creative held a CTR 4.5 times higher than buys placed in a mobile network. The successful Angry Birds implementation of advertisement should provide a sample to Pokemon Go developers. If the Pokemon Go developers decide to go this route, then it sure will provide plenty more additional revenue to an already extremely profitable game.