Playing Games With Consumers

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My bachelor thesis on gamification in digital brand marketing from 2012. Feel free to contact me for a download or any questions.

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Playing Games With Consumers

  1. 1. Playing games with consumers How can gamification be used for attainment of common marketing objectives in the digital marketing of brands? Bachelor thesis Author: Jan Himmighofen Student number: 80383 Course: Media & Entertainment Management Stenden University of Applied Sciences Hamburg, Germany 8 June 2012 Picture by mikemcnary (2010)
  2. 2. Playing games with consumers How can gamification be used for attainment of common marketing objectives in the digital marketing of brands? Lecturer: Deike Schulz Second reader: Gregor Garn
  3. 3. 3 Abstract The objective of this bachelor thesis is to reveal the methods and insights how brands or media agencies can make use of gamification for attaining their digital marketing goals. Gamification is a relatively new and innovative approach, which has already generated very interesting results for some brands. The concept of gamification is defined as “the use of game-thinking and game mechanics in a nongaming context to engage users and solve problems.” Gamification differs from traditional games since it always uses game attributes to achieve other goals than purely providing fun. Also, gamification takes place in a non-game context and tries to turn any non-game activity into a game-like experience. Humans enjoy games very much. This is due to the fact that games very often motivate us intrinsically. We are not purely motivated by external rewards such as money or material goods when it comes to games, but by the pure act of playing. This motivation driven by the enjoyment of the task itself is called intrinsic motivation while motivation driven by external outcomes is called extrinsic motivation. Games and gamification can make use of both types, but they are particularly attractive because of their ability to provide those strong intrinsic motivators like performing satisfying work that makes us immerse in a fun and challenging activity where we see the direct impact of our efforts, have the experience to be successful, are autonomous in our own decisions, experience social connection and sometimes even feel that we are part of something larger than ourselves. Also, as with other activities that perfectly challenge us, we are often in a state called flow when playing games. In this state, our perception and senses process so much information that we lose our sense for time, place and even sense. In flow we feel extraordinarily happy and satisfied, because we are fully engaged in an interesting and challenging activity. A well-designed game or gamification experience is able to make players experience this state often by perfectly matching the challenge the game provides to the player’s ability. The player is challenged to the point that he is just able to succeed in the game without being bored or overstrained. In order to create gamification, a game needs to be constructed out of a nongame activity. This implies the application of the basic elements that make up a game such as a goal, rules, a feedback system, and voluntary participation. Next, games make use of various game mechanics to create play and fun. Some examples are achievements like trophies, medals, or badges. The game mechanic of discovery, for example, allows player to explore a new world inside the game. Levels, points and rewards make players feel that there are progressing inside the game and attach a certain status to each player. The game mechanic of ownership allows players to be creative and create something of their own. There are many more game mechanics that can be used for the creation of gamification, which are explained in this thesis. The game mechanics can also add intrinsic motivation to the gamified activity. However, there are also more ways to add intrinsic motivation, which should always be considered since the use of intrinsic motivators especially creates lasting engagement. As the recent statistics about worldwide media spend and use of digital technology show, the future belongs to digital technology. Brands have already begun to shift their marketing budgets from traditional and analogue media to new and digital media. In digital marketing, next to social and
  4. 4. mobile activities, gamification can also become an important tool for brands since it can yield great results as the case studies in this thesis demonstrate. Several aspects need to be considered when making use of gamification in digital marketing. Gamification is often poorly utilized by simply adding a few game mechanics to a product, service, or application. One needs to understand that gamification is a process that needs to be structured in order to be most successful. First and most importantly, any gamification campaign needs a goal and has to consider the brand, its product, the target group, the marketing budget and anything else that is provided in a briefing. A well-designed gamification campaign helps the consumers or users to achieve their goals, provides at least some intrinsic motivation while simultaneously attaining the goals of the brand. Typical marketing goals that can be achieved by the use of gamification are creating brand interaction, increasing customer bonds and loyalty, increasing brand awareness, and ultimately generating sales. Other goals can also be achieved, but gamification might not be the most efficient solution. There are several channels and tools that can be used for a gamification campaign in digital marketing. In general, gamification requires interaction and an interactive platform. In digital marketing, channels such as mobile, mobile apps, online and social media are most commonly used and provide a great basis for providing a gamification experience. For small or medium budgets (€10,000 - €70,000) the use of a gamification service vendor like, for example, Badgeville, Bigdoor, or Bunchball makes sense since those provide inexpensive prepackaged gamification tools than can easily be implemented into a mobile or web site of any brand. They make use of several game mechanics and can yield great improvements in user engagement, for example, but also often suffer from attracting only some of the different player types. Gamified mobile apps such as foursquare or SCVNGR also provide inexpensive means to create basic gamification and provide the advantage to access an already existing user base. When implemented into an overall strategy, those tools can yield great results, but the possibilities to gamify are also limited with these tools. A premium method to create gamification, which is only suitable for higher budgets (€100,000 and more), is the creation of an own and unique gamification platform, which can be customized to the brand. The design process of any gamification application is vital. A well-designed gamification campaign is tailored to the goals of the brand, attracts different players types, motivates people and helps them to achieve their own goals, provides intrinsic motivation and implements multiple game mechanics in a clever and attractive way. It also allows the players to experience flow and optionally offers extrinic rewards such as prizes or monetary goods. At the same time, the preparation of additional marketing and promotional activities, proper campaign timing, proper staff traing, and the testing of the gamification experience are important prior to launch. Finally, a gamification application never ends once it is launched. It requires constant monitoring, analysis and evaluation. Technical issues and bugs might need to be fixed and cheating players or inappropriate content might need to be dealt with. Also, the gamification application can constantly be improved according to the feedback of the players in order to provide the best possible experience. The learnings that are made from the development and execution of one gamification campaign can be used to optimize the next. When applied with care and proper consideration, gamification can yield impressive results for any brand and create memorable and long-lasting positive brand experiences in the consumer’s perception. 4
  5. 5. 5 Preface The rapid development of digital technology in recent years has led to radical changes and various new possibilities in marketing. During the last decade, one of the most important developments in terms of marketing communication was the emergence of social media and social network platforms such as Facebook. As, for the first time, millions of people were able to stay connected with their friends and a larger social network by using these services, brands and marketers realized that social media offers excellent means to connect with customers and allows them to interact with the brand at nearly all times. Through the emergence of smartphones and other mobile devices with mobile Internet access, connectivity has increased even more allowing everyone to participate from nearly anywhere in the world. Today, consumers have the means and resources to actively participate in the media world and shape brand images. Consumers not only receive marketing messages, but also can send messages back to the brand easily as well as share messages with the whole online world. These developments have forced brands and marketers to rethink their marketing strategies and methods. In the digital and social media marketing world, it has become increasingly important not only to raise awareness of your brand by issuing marketing messages on a regular basis, but to actively engage consumers in activities that are related to the brand. A yet very young and promising approach to consumer engagement in marketing is gamification. The underlying system behind gamification is games and how game techniques can transform any non-game activity into an activity that is more engaging and more fun. Gamification can be applied in a broad variety of fields. There have been some great first gamification trials not only in marketing or entertainment contexts, but also in fields such as education, training, business management, fitness & health and many more. We enjoy games vey often and experience them as very engaging. Games seem to have a certain power and certain characteristics that attract us and make us enjoy playing them. The aim of this bachelor thesis is to find out about the characteristics and possibilities of gamification and how the concept can be incorporated into the marketing of brands in the digital world. Today, the aim of many brands in the modern media world is to engage their fans and customers as much as possible in order to increase loyalty, brand awareness and ultimately turnover. The possibilities of social media have allowed brands to make a big step towards higher customer engagement. According to Gartner, “by 2014…more than 70% of Global 2000 organizations will have at least one gamified application, driving 50% of all innovation.” (The Gamification Summit, 2011) Can gamification provide the next step towards increased engagement? At this point, I want to thank everyone who assisted and supported me in the development of this bachelor thesis.
  6. 6. I want to thank my university lecturer Deike Schulz for supervising the development of my thesis and offering help throughout the whole process. Furthermore, she constantly provided me with constructive feedback, which certainly helped to improve this thesis. In addition, I want to thank my colleagues at OMG Fuse, especially Christian Adams and Gregor Garn. The conversations that I had with Christian Adams about my thesis were very helpful for developing the research questions and a basic orientation within the research topic. Gregor Garn also provided a lot of constructive feedback, which helped to improve the thesis. It was great to hear a second opinion from the professional field of digital marketing about the content of the thesis. Of course, I also want to thank Andreas Harnischfeger, Markus Breuer and Mario Herger for participating in an interview and contributing valuable time and expertise although they all are very busy people. Finally, many thanks go to my family, friends and girlfriend, who accompanied and supported me throughout the whole process. 6
  7. 7. 7 Table of Contents List of appendices ................................................................................................. 9 List of tables ........................................................................................................ 10 List of figures ....................................................................................................... 11 Introduction ......................................................................................................... 12 1 Literature review ............................................................................................ 15 1.2 Gamification ............................................................................................................................ 15 1.2.1 Definition .......................................................................................................................... 16 1.2.2 The power of games .......................................................................................................... 18 1.2.3 Creating gamification ....................................................................................................... 23 1.3 Digital marketing ..................................................................................................................... 29 1.3.1 Definition .......................................................................................................................... 29 1.3.2 Digital marketing methods ............................................................................................... 31 1.3.3 Digital marketing practice of brands ............................................................................... 33 1.3.4 Objectives in digital marketing ......................................................................................... 36 2 Methodology ................................................................................................... 39 3 Findings .......................................................................................................... 41 3.1 Gamification case studies ........................................................................................................ 41 3.1.1 Gamification service vendors ........................................................................................... 41 3.1.2 Mobile applications for gamified experiences .................................................................. 44 3.1.3 Case study: Buffalo Wild Wings ....................................................................................... 45 3.1.4 Case study: Nike+ ............................................................................................................ 48 3.1.5 Case study: Greenpeace VW Dark Side ........................................................................... 50 3.1.6 Comparison of the cases ................................................................................................... 52 3.2 Interviews ................................................................................................................................ 54 3.2.1 Andreas Harnischfeger ..................................................................................................... 54 3.2.2 Markus Breuer .................................................................................................................. 54 3.2.3 Mario Herger .................................................................................................................... 55 4 Evaluation ....................................................................................................... 57 5 Results and conclusion ................................................................................. 58 5.1 Gamification in digital marketing ........................................................................................... 58 5.1.1 Channels and methods ...................................................................................................... 58 5.1.2 Marketing objectives ......................................................................................................... 59 5.2 Successful gamification ........................................................................................................... 61 5.3 Implementing gamification ..................................................................................................... 63
  8. 8. 6 Discussion ...................................................................................................... 69 7 Reference list ................................................................................................. 70 8 Appendices ..................................................................................................... 79 A Definitions .................................................................................................................................. 79 B Digital marketing methods from chapter 1.2.2 .......................................................................... 81 C Interviews ................................................................................................................................... 84 C.1 Andreas Harnischfeger ........................................................................................................ 84 C.2 Markus Breuer ..................................................................................................................... 86 C.3 Mario Herger ...................................................................................................................... 94 8
  9. 9. 9 List of appendices Page Appendix A - Definitions ……..………………………………...…………………………. 79 Appendix B - Digital marketing methods from chapter 1.2.2 ……………………………... 81 Appendix C - Interviews ……………………………………………………………..……. 84
  10. 10. 10 List of tables Table 1. Methods and sources used for answering the sub-questions. ............................................. 13 Table 2. Intrinsic motivators according to McGonigal (2011) ......................................................... 19 Table 3. Game mechanics ................................................................................................................. 25 Table 4. How Nike+ works ............................................................................................................... 48 Table 5. Comparison of the gamification cases studied ................................................................... 52 Table 6. Game mechanics to attract different player types ............................................................... 67 Table 7. Methods and game mechanics to promote different kinds of intrinsic motivation ............ 67
  11. 11. 11 List of figures Figure 1. Farmville, Zynga (left); Diner Dash, Playfirst (right) ....................................................... 15 Figure 2. Games, serious games, and gamification .......................................................................... 18 Figure 3. The state of flow is achieved when skills and challenge match ........................................ 22 Figure 4. A player's overall result after completing Yee's motivations assessment ......................... 23 Figure 5. Global ad spend by media 2010 – 2014 ............................................................................ 34 Figure 6. Worldwide social networking ad spending ....................................................................... 35 Figure 7. Big Brother Superfans Leaderboard by Bigdoor ............................................................... 41 Figure 8. Badgeville's Widget Studio & API for web and mobile sites ........................................... 42 Figure 9. HopeLap for ZAMZEE by Bunchball ............................................................................... 43 Figure 10. foursquare on an iPhone .................................................................................................. 44 Figure 11. Web integration of Buffalo Wild Wings' SCVNGR challenge ....................................... 46 Figure 12. Challenges and impressions during the campaign ........................................................... 46 Figure 13. The VW Dark Side online platform ................................................................................ 51 Figure 14. The gamification design and implementation process .................................................... 64
  12. 12. 12 Introduction Games have become an important part of our every day life. Many people across the globe play regularly because they enjoy their favorite games so much. At the same time, some brands have already utilized games as a tool for marketing purposes. A yet very young and innovative approach for making use of the power of games is called gamification. The aim of this thesis is to explore and analyze this new approach in detail and provide a recommendation how brands or media agencies can utilize gamification successfully for marketing via digital media. Limiting the focus on digital marketing was necessary because a general marketing approach would go beyond the possible scope of a bachelor thesis. This thesis will focus on the following main question: How can gamification be used for attainment of common marketing objectives in the digital marketing of brands? In order to answer this question, a couple of sub-questions need to be considered first: 1. What is gamification and how does it work? To get a first understanding about the subject of gamification, the general approach will be explained. Taking a look at the importance of games today and the characteristics of a well-designed game, we will also find out how gamification can be created. 2. What is digital marketing? How do brands use digital marketing today? In order to use gamification for digital marketing, it is vital to understand what digital marketing is about and what different kind of possibilities it provides. Also, today’s digital marketing practice of brands needs to be considered. 3. What are the common marketing objectives of brands using digital marketing? Before pursuing any marketing activity, a brand must define some objectives that it tries to attain using marketing methods. The most common marketing objectives that brands try to achieve using digital marketing will be compiled. 4. Where can gamification be implemented in digital marketing? Where not? What this question focuses on is whether and how the different channels and methods of digital marketing can be used when creating gamification. Some digital channels might be very suitable for gamification; others might not be suitable very much. 5. Which marketing objectives in particular can be attained through the use of gamification? Which not? What is the benefit of gamification? After having analyzed the marketing objectives of brands for digital marketing, it is necessary to find out which marketing objectives can be attained through the use of gamification methods by analyzing different gamification cases and talking to experts. Gamification methods might prove to be strong for attaining some marketing goals, but might not be very suitable for others.
  13. 13. 13 6. What is important to consider when making use of gamification in digital marketing? The success factors of gamification will be identified according to an analysis of some gamification case studies and expert interviews. 7. How can brands implement gamification in their digital marketing? By answering this question, a recommendation for brands will be created. The findings of the previous parts will be summarized and the implementation of gamification into digital marketing practice will be explained. Qualitative research methods will be used to understand the phenomenon and its specifics. This implies an analysis of data from a limited number of example cases, theories from literature and expert interviews. The first three sub-questions will mainly be answered using desk research and literature analysis. The additional sub-questions will be answered by conducting some gamification case studies and applying information that has been collected using expert interviews. Finally, the results of this research will lead to a recommendation for brands or media agencies on how to make use of gamification in the near future for their digital marketing campaigns. This means that an inductive research approach will be used for this thesis since a theory will be developed as a result of the data analysis. (Saunders, Lewis, & Thornhill, 2007, p. 117) By using qualitative research, the findings of this thesis may not be conclusive and may not be used to make generalizations, but will provide an initial understanding about gamification and a sound base for further decision-making about the topic in marketing. (Saunders, Lewis, & Thornhill, 2007, pp. 100-121) (Higher Education Academy's Centre for Sociology, Anthropology and Politics, the Centre for Social Work and Policy and Sheffield Hallam University, n.d.) The following table describes the research methods and sources used in more detail. Table 1. Methods and sources used for answering the sub-questions. Sub-question Research methods Most important sources 1. What is gamification and how does it work? Literature analysis (McGonigal, 2011); (Zichermann & Cunningham, 2011); (Zichermann & Linder, 2010); (Csíkszentmihályi, 2004); (Pine & Gilmore, 1999) 2. What is digital marketing? How do brands use digital marketing today? Literature analysis (Kotler, Wong, Saunders, & Armstrong, 2005); (Ryan & Jones, 2011); (Solis, 2011); Internal documents of OMG FUSE 3. What are the common marketing objectives of brands using digital marketing? Literature analysis Internal documents of OMG FUSE; (Farris, Bendle, Pfeifer, & Reibstein, 2009); 4. Where can gamification be implemented in digital marketing? Where not? Expert interviews Interview: Andreas Harnischfeger; Markus Breuer
  14. 14. Case studies Case documentation and articles: Buffalo Wild Wings & SCVNGR; Nike+; Greenpeace VW Dark Side 14 5. Which marketing objectives in particular can be attained through the use of gamification? Which not? What is the benefit of gamification? Expert interviews Case studies Interview: Andreas Harnischfeger; Markus Breuer Case documentation and articles: Buffalo Wild Wings & SCVNGR; Nike+; Greenpeace VW Dark Side 6. What is important to consider when making use of gamification in digital marketing? Expert interviews Case studies Interview: Andreas Harnischfeger; Markus Breuer; Mario Herger Case documentation and articles: Buffalo Wild Wings & SCVNGR; Nike+; Greenpeace VW Dark Side 7. How can brands implement gamification in their digital marketing? Expert interviews Case studies Interview: Andreas Harnischfeger, Markus Breuer, Mario Herger Case documentation and articles: Buffalo Wild Wings & SCVNGR; Nike+; Greenpeace VW Dark Side
  15. 15. 15 1 Literature review 1.2 Gamification Throughout the last decades, games and our possibilities to play have developed very drastically. Especially through the advance of digital technology and the widespread use of the Internet, people have been provided with new and extremely engaging ways to play. As a result, many of us have begun to experience games more frequently and to try out and test many different games since there are so many of them available. With over 600 million computer and video game players around the globe and games available for our computers, our mobile phones, and for our home entertainment systems, the video game market, which is only a part of the whole game market, is expected to become a 68 billion dollar industry annually by the year 2012. (McGonigal, 2011, pp. 3-4) Surprisingly, games don’t need thrilling themes or activities in order to be fun as the success of many social and casual games on Facebook, mobile devices, or other systems has demonstrated over the last years. Many of the most popular social games of the last five years are based on incredibly simple and banal ideas such as planting crops in FarmVille1, waiting tables in Diner Dash1 or diapering a baby in Diaper Dash1. (Zichermann & Cunningham, 2011, p. 2) Figure 1. Farmville, Zynga (left); Diner Dash, PlayFirst (right) (Dignan, 2010) (PlayFirst, 2011) This is good news for marketers, since it means that game-techniques by themselves provide engagement and interest for players and might be applicable to nearly any products, service or activity. (Zichermann & Cunningham, 2011, p. 2) Furthermore, games fit perfectly into today’s experience economy, as defined by Pine & Gilmore (1999). The experience economy describes an economy in which the highest form of value creation and differentiation is reached by offering experiences to customers. All prior economic offerings such as commodities, goods, or services usually cannot create the same value in customer’s 1 A description of the game can be found in appendix A.
  16. 16. perception as an experience, because they remain outside the buyer. Experiences, on the other hand, are inherently personal, memorable and actually occur within any individual who has been engaged on an emotional, physical, intellectual, or even spiritual level. Therefore, in the experience economy, it is increasingly important to create an emotional connection with a customer. (Pine & Gilmore, 1999, pp. 1-15) And games do create very personal and emotional experiences in the player’s or customer’s mind, which is why they are enjoyed by millions of people and can provide a great tool for brands to create experiences around their products. As markets gamify and consumers demand fun, engaging, and creative experiences, brands are challenged to satisfy these demands or be left behind the competition. (Zichermann & Cunningham, 2011, p. 13) These developments have led to the creation of the term gamification, which has been one of the most frequently used marketing buzzwords of the last years. According to M2Research, the gamification market is currently estimated at around $100 million in size and will grow to more than $2.8 billion by 2016. Top gamification vendors like Badgeville, Bunchball, etc. have shown 155% growth in 2011 and are projecting an even larger 197% growth in 2012. (The Gamification Summit, 2011) But the meaning of the term gamification is not so simple and many people in marketing still not really understand its core meaning. Definitions in literature about the topic also vary to some extend. The following definition has been formulated using and combining several definitions from literature. 16 1.2.1 Definition Gamification is the use of game-thinking and game mechanics in a nongaming context to engage users and solve problems. In that sense, gamification is used to enhance products, services or applications that are not games and to encourage people to adopt them or to influence the way in which they are used. (Zichermann & Cunningham, 2011, p. xiv) (McGonigal, 2011) (Gamification Wiki, 2012) In order to understand gamification and how it can be utilized to make something more fun and “game-like”, it is important to understand what games are in the first part. Today, there are games in various forms. There are singleplayer and multiplayer games. There are games that can be played at home, outside, over the Internet, on a field, at a computer, with a board, with cards, with a controller, on a mobile device and more. Many games have become so successful that they are played all over the planet and by millions of people regularly. Many sports games like football and basketball, for example, are highly popular around the world making professional players, clubs and leagues earn millions of Euros since many years. And even video games are able to attract an increasing number of people recently allowing e-sport tournaments to be broadcasted on national television in some countries, such as South Korea. (McGonigal, 2011, pp. 20-21)
  17. 17. Although there are many different game types, platforms on which games are played and genres of games, there are some attributes that all games share and that define them. According to McGonigal, these are: a goal, rules, a feedback system, and voluntary participation:  Goal: a goal is the desired outcome that players will plan and strive to achieve. It gives players a destination to go and focuses their attention. Throughout the game, players will constantly orient their participation towards achieving the goal. The goal provides players with a sense of purpose.  Rules: rules provide structure to the game. They limit the possibilities of how players can achieve the goal. By adding rules that prohibit the obvious ways of getting to the goal, players are forced to think of alternative and creative methods to attain the goal. Therefore, game rules also foster strategic thinking.  Feedback system: a feedback system supports players on their way towards achieving the goal by providing constant feedback about how well they are doing and how close there are to achieving the goal. For example, this can imply the use of points, levels, a score or a progress bar. Real-time feedback motivates the players to keep playing because it serves as a promise that the goal is definitely achievable.  Voluntary participation: games are played voluntarily by people. This voluntary participation implies that every player knowingly and willingly accepts the goal, the rules, and the feedback. This is also why games provide common ground for multiple people to play together. These factors are the core features of any game. Everything else, like rewards, graphics, interactivity or competition, is an effort to reinforce and enhance these four defining elements. (McGonigal, 2011, p. 21) Another very compelling definition of a game that summarizes its core meaning is this of the philosopher Bernard Suits: 17 “Playing a game is the voluntary attempt to overcome unnecessary obstacles.” (Suits, 2005, p. 38) What he means is that games challenge us harder than reality because we accept voluntary obstacles when playing games. These obstacles motivate us to make use of our personal strengths and do our best to reach the goal. The following figure visualizes the distinction between games and gamification.
  18. 18. 18 Figure 2. Games, serious games, and gamification (Wu, 2011) While games are mainly designed purely for entertainment, gamification should not be confused with games. Gamification always uses game attributes to achieve other goals than purely providing fun. In addition, gamification always takes place in a non-game context and tries to turn any non-game activity into a game-like experience. (Wu, 2011) In the overlapping area between games and gamification there are the so-called serious games, which are games that have a certain purpose except from providing fun and entertainment like, for example, educational games, games that drive awareness of certain issues, etc. In fact, gamification and serious games are related because both try to leverage aspects of games to achieve something else. A serious game does it through an actual game. Gamification does it through a non-game context that is turned into a game-like experience by utilizing a broader set of tools such as game mechanics, game design, gaming psychology, and more. (Wu, 2011) 1.2.2 The power of games Probably anybody has played a game in his life at least once. Most people, however, have played many different games or even play their favorite games regularly. According to the Interactive Software Federation of Europe, one in three Europeans plays computer and video games regularly. A total of nearly 100 million people in Europe play computer and video games. This is quite a large number and it does not include many other games that are not played on a computer or console such as sports games, card games, board games, or any other. Digital video gaming is most popular among the young, however, almost 30% of 30-49 year olds play video games in Europe today. Furthermore, video gaming no longer is a male only preserve. 20% of females in Europe indicate that they are gamers. (Interactive Software Federation of Europe, 2011) (GameVision Europe, 2010, p. 16) (McGonigal, 2011, p. 3) But what is it that makes games so interesting that many of us play and enjoy them regularly? According to McGonigal, the answer can be found in the research that has been conducted in the field of positive psychology. The relatively new science of positive psychology is concerned with
  19. 19. the study of how people can achieve different kinds of happiness. McGonigal describes that according to virtually all theories in positive psychology, there are many ways to be happy, but happiness has to come from within oneself in order to lasts for a longer time period. If one performs tasks that provide intrinsic motivation, which is motivation that is driven by an interest or enjoyment in the task itself, one tends to be happier for a long time. And games can provide this intrinsic motivation very well. On the other hand, extrinsic motivation, which is motivation not driven by the enjoyment of the task itself but by external outcomes, such as money, material goods, fame, status, or threat of punishment, cannot provide long-lasting happiness. When people play games, they experience intrinsic motivation such as positive emotions, personal strengths, social connections and full engagement. (McGonigal, 2011, pp. 37, 45) The following table shows the most essential intrinsic motivators according to McGonigal and how these motivators are used in a well-designed game such as World of Warcraft2. 19 Table 2. Intrinsic motivators according to McGonigal (2011) Intrinsic motivators Use in World of Warcraft Satisfying work Satisfying work means being immersed in clearly defined, demanding activities that neither make us feel subchallenged nor overstrain us and allow us to see the direct impact of our efforts. In World of Warcraft, your workflow is nearly endless. There is always something to do and different ways to improve your avatar. Every mission or “quest” has a clear goal and fits to your current skills so that you are always able to accomplish your mission. As you improve in skills, your missions get harder. You battle powerful opponents that you are just barely strong enough to defeat. The experience or hope of being successful We want to be powerful in our own lives and be optimistic about our chances for success. We also want to feel that we are able to master something and that we are getting better over time. In World of Warcraft, your most important job is self-improvement. You have an avatar that you need to make better, stronger, and richer in many different ways. You start at a very low level and work your way up to the top level. Your odds of success are great. If you invest a lot of time and effort, you can achieve mastery. Due to the level and ranking system, you receive constant feedback and always know what your progress is and how far you still have to go. Social connection Social connection and interaction with other In World of Warcraft, you are required to do a lot of teamwork. The fun really starts as soon as 2 A description of the game can be found in appendix A.
  20. 20. 20 people around us contributes a great deal to our happiness. We want to spent time with the people we care about, share experiences, build bonds and do things that matter together. you join forces with other players. Some missions require you to join a group of other players. Social interaction is very important as well as collaboration and strategic group work. Building bonds with other players from around the world is common. Meaning / Purpose Activities that have meaning or purpose give us the chance to be part of something larger than ourselves. We want to belong to and contribute to something that has lasting significance beyond our own lives. In World of Warcraft, as you progress and complete your missions, the world around you changes. Players feel like they have a significant impact on the world around them. Players can also take part in fights between hundreds of different players from different teams and change the game world drastically together. (McGonigal, 2011, pp. 49-50, 53-63) As World of Warcraft makes use of all these very strong intrinsic motivators, it is not surprising that the game has generated exceptional player engagement and productivity. In fact, since it launch in 2004, players have collectively spent 5.93 million years playing World of Warcraft. Each of the 11.5 million subscribers of the game spends on average between seventeen and twenty-two hours per week in World of Warcraft. The intrinsic motivators must have played a key role in achieving these great results. (McGonigal, 2011, p. 52) Daniel Pink is another author that conducted research on the drivers of human motivation. He distinguishes between intrinsic and extrinsic motivation, too. Since extrinsic motivation relies on external and monetary rewards, it is able to engage us in routine tasks very effectively and for a short time period. However, as Pink explains, extrinsic motivation and monetary rewards are harmful when trying to motivate people to do non-routine and creative tasks. Even worse, when monetary rewards are in place, they have to be increased in value continuously to remain motivating. If monetary rewards for a specific task are suddenly removed, motivation will vanish nearly completely. Intrinsic motivation, on the other hand, provides renewable and sustainable motivation that will engage humans in a particular activity for a very long time. (Pink, 2011, pp. 1- 81) Pink identifies three essential elements that are required to motivate humans intrinsically:  Autonomy: Autonomy describes our desire to direct our own lives. In order to motivate people intrinsically, they need to have autonomy over task, time, team, and technique. This means that they are able to decide on their own what they do, when they do it, who they do it with and how they do it.  Mastery: Mastery is the urge of humans to get better and better at something that matters. Only when humans are highly engaged in something they are able to improve their skills and abilities to achieve mastery. Mastery also relies on a phenomenon called “flow”, which will be explained later.
  21. 21.  Purpose: Purpose describes our desire to contribute to a greater cause. When people work for something larger than themselves they feel that they are contributing to something that has a lasting impact on the world. (Pink, 2011, pp. 83-146, 203-208) When humans experience all of these three elements, they are deeply motivated. Applied on gamification, this means that players should ideally have the greatest possible autonomy within the game, should be able to master the game and get better at it regardless of their prior skills and abilities, and should be able contribute to something they regard as a greater cause. Although McGonigal’s and Pink’s definitions of intrinsic motivators are different from one another, they describe more or less the same elements and are both important for understanding motivation by gamification. In order to understand how games motivate and engage us, it is also important to look at an idea called flow. The American psychologist Mihály Csíkszentmihályi was the first researcher to analyze this phenomenon. He has defined flow as: “The satisfying, exhilarating feeling of creative accomplishment and heightened functioning.” (McGonigal, 2011, p. 35) In his experiments, Csíkszentmihályi found out that the most satisfying experiences in people’s lives were when they were in flow. In the state of flow, we feel extraordinarily happy and satisfied, because we are fully engaged in an interesting and challenging activity. When being in a state of flow, we live so deeply in the moment that we forget everything around us and lose our sense for time, place and even sense. After many years of research, Csíkszentmihályi also found out when we are experiencing this state most. The perfect setting for flow is when we are actively engaged in an activity and the balance between what we have to do and what we are able to do is perfect. We are neither overcharged with tasks that are too difficult, nor bored because the tasks are too simple and do not challenge our abilities. (Csíkszentmihályi, 2004) (Pink, 2011, pp. 114-115) (Zichermann & Cunningham, 2011, pp. 16-17) (McGonigal, 2011, p. 35) Game designers around the world are using this knowledge to create the state of flow. As well-designed games today create a perfect balance between hard challenge and the player’s ability, people experience flow when playing games very often. Players often feel extraordinarily satisfied when playing a game, because they are actively engaged and are always performing on the very limits of their current skill level. (Zichermann & Cunningham, 2011, pp. 16-17) (McGonigal, 2011, pp. 24, 35) In well-designed games, the challenge that players are experiencing is not too easy, nor too difficult. The following figure visualizes the idea of flow and the state in which it is achieved. 21
  22. 22. 22 Figure 3. The state of flow is achieved when skills and challenge match (Zichermann & Cunningham, 2011, p. 18) When a player is performing below his skill level, he is not engaged and gets bored. On the other hand, when the challenge level is too high for the current ability of the player, he shuts down because he is too afraid of the task. The optimal point of engagement and satisfaction is reached in the “flow zone” where challenge matches ability. Over time, the player ideally is led along that flow zone, beginning with only some skills and small challenge and eventually working his way up to the point where challenge has become high as great skills have been achieved. However, according to research on the motivation of players, not every player experiences the individual elements of motivation in the same way. For example, some players feel extremely motivated when they are able to play together with friends while other players are driven more by competition and advancement and less by social components. Due to this fact, several player types can be identified. In the 90th, Richard Bartle published the most common classification of player types. However, since his classification suffers from several limitations, Nick Yee revised it and published an updated version. (Breuer, 2011c) (Yee, n.d.) According to Yee, there are three motivation components by which players can be classified:  Achievement: Achievement describes the desire of players to achieve in the game. Typical elements that achievement players enjoy are progression, advancement, competition and understanding the mechanics of the game.  Socializing: Socializing means the desire of players to interact and form relationships with other players. Typical elements that socializing players enjoy are communication, relationships, teamwork and collaboration.
  23. 23.  Immersion: Immersion means the desire of players to immerse in the game and its contents to relax or relieve their stress from the real world. Typical elements that immersion players enjoy are discovery, role-playing, customization and escapism. In order to find out what type of player they are, players can complete a survey with an inventory of 39 items developed by Yee (2006). Some example questions from the survey are “How important is it to you to be well-known in the game?” or “How much time do you spend customizing your character during character creation?” (Yee, 2006b) It is important to understand that players are not exclusively one or another of the three player types, but can have characteristics of all types at the same time. Usually one type is more prominent than the others. In the example below, a player scores 89% on achievement, 58% on socializing and 39% on immersion. Therefore, he is most prominently an achievement type of player. (Yee, n.d.) (Yee, 2006a) (Yee, 2006b) 23 Figure 4. A player's overall result after completing Yee's motivations assessment (Yee, 2006a) For the practical side of gamification, this means that a gamification application which aims to attract a larger target group should not exclusively make use of one of the three motivation components, but implement mechanics that attract and motivate people of different player types. (Breuer, 2011c) 1.2.3 Creating gamification What gamification tries to achieve is to create play and fun around a product, service, or application that does not contain these features otherwise or by itself. In contrast to our ordinary reality, games provide freedom and allow unexpected and unusual behavior. By accepting voluntary obstacles in games, like, for example, kicking the ball with the feet in football instead of using the hands, people feel challenged and want to put their personal skills to use. Games free us from stress, anxiety, and the pressure of the daily life and put us in a new and more liberate situation. By applying game thinking and game mechanics on activities in
  24. 24. our daily life, stressful and challenging work can be experienced as safe and pleasurable since we fell autonomic inside the game to the limit of the rules and we are free to enter or leave the game at will. (McGonigal, 2011, pp. 21-22) So how can these great features be utilized when applying gamification? How can play and fun be created? Initially, any gamification application requires the four core elements of a game as explained before: a goal, rules, a feedback system, and voluntary participation. Once this is set, it is important to think about how people can be intrinsically motivated to play the game. Ideally a gamification product should make use of the essential intrinsic motivators listed above: satisfying work, the experience or hope of being successful, social connection, and meaning. In addition, it is important to allow players to experience flow when playing the game. The perfect setting for this to happen is when the game system constantly adapts the challenge the game provides to the skills and abilities of the individual player. A player should always be challenged to the point that he is just able to succeed in the game. (McGonigal, 2011, pp. 49-50, 53-63) (Zichermann & Cunningham, 2011, pp. 16-17) The next step is to enhance these core elements. In order to allow great gameplay in games and gamification, the use of game mechanics is vital. According to Zichermann & Linder (2010), “a game mechanic is any technique implemented by game designers in order to create play.” (Zichermann & Linder, 2010, p. 25) Many game mechanics originate from traditional games such as board games, sports games or any other game and can be very different in type. One thing that all game mechanics have in common is that they allow and create play and contribute to a great deal to the fun and motivation of players. Game mechanics can be part of the rules of a game, make up the feedback system or more. The following table contains a compilation of game mechanics that are commonly used in many different games. 24
  25. 25. 25 Table 3. Game mechanics Game mechanic Definition Examples Purpose Achievements A virtual or physical indication of having accomplished something. Trophies, Medals, Badges  Show progression  Indicate status & skill  Give players a representation of what they have done  Add challenge and character to the game Appointments A predetermined time/place a user must log-in or participate in game for positive effect. FarmVille: players are required to harvest their crops after a specific amount of time. “Happy hour” at a bar: get discount on drinks at a certain time.  Add challenge  Increase time spent  Increase player’s commitment to the game Blissful Productivity The sense of being deeply immersed in work that generates obvious results. The endless stream of work in World of Warcraft. You constantly have ways to improve and get things done.  Players are happier because they feel that they are productive and do meaningful and rewarding work  Increase engagement Bonuses A reward after having completed a series of challenges or core functions. Extra lives or extra points after having completed a level well. Job: receiving a bonus for great performance.  Provide feedback  Increase engagement, time spent, virality3, and influence on the player Cascading information theory Only release little pieces of content at the appropriate time and in the right context to help players solve immediate challenges. Learning new moves or game actions only right before they are required. Education: begin with the basics and gradually add more information and challenge.  Make the game more interesting over time  Prevent overwhelming the player  Increase loyalty, engagement, and influence on the player Combos A reward for skill through completing a combination of actions or achievements. Completing a combination of difficult moves in a fighting game.  Indicate status & skill  Provide feedback  Add challenge 3 The concept of virality is explained in appendix A.
  26. 26. 26 Community Collaboration An entire community is required to solve a problem or complete a challenge. Large “raids” or battles between many players in World of Warcraft. Wikipedia: a crowd of collaborators is required to write the encyclopedia.  Increase virality and social interaction  Make players feel they are contributing to an epic scale project  Increase engagement Countdown Players are only given a certain amount of time to do something. Bonus rounds to get as many points as you can in a limited time. Temporary discount at a store: get discount until a certain point in time.  Increase player’s activity for a short time period  Increase challenge and engagement Discovery Allow and motivate players to make discoveries, explore, and find something new and surprising. Rewards or experience points for exploring the game world. A scavenger hunt.  Increase engagement, time spent, and fun due to the element of surprise Epic Meaning Make players feel they are working on large-scale projects with great meaning. Building something together in Minecraft4. Wikipedia  Give players a purpose for playing that is larger than themselves  Increase engagement, loyalty, time spent, and influence on the player Infinite Gameplay The game does not have an explicit end. It can constantly refresh its content or the player works toward a static and positive state. Tetris4, FarmVille, The Sims4, SimCity4  Increase time spent, engagement, and loyalty Levels Players can move up in a level system, by which players are rewarded an increasing value for a cumulation of points. In World of Warcraft, players earn the ability to improve their character as they level. The higher the level, the more powerful a character becomes. Colored belts of Judo fighters.  Symbolize status  Provide feedback  Strong player motivation  Increase engagement, loyalty, time spent, virality Loss Aversion Influencing player behavior not by reward, but by Losing points, status, or items in a game for not being active.  Increase engagement, time spent, loyalty, and influence on the player 4 A description of the game can be found in appendix A.
  27. 27. 27 instituting punishment. Lottery The winner is determined solely by chance. Gambling, prize lotteries.  Create a high level of anticipation  Increase awareness, participation, engagement, virality Ownership Users or players are able to create, customize and control their own characters, items, goods or other things. Nintendogs5: players create their own pet to protect and look after it. Product customization: brands allowing customers to customize products  Create an emotional bond for the player  Increase loyalty, influence on the player, and engagement. Points A running numerical value given for a certain action or combination of actions in the game. Collecting pellets in Pacman5, moving the ball in pinball, often arranged in a high score  Indicate progression  Increase challenge and competition between players  Increase motivation, engagement, time spent, virality Progression A player’s success is gradually displayed and measured through the process of completing specified tasks. A progress bar displaying the completion of a quest.  Provide feedback  Motivate players to complete a task  Increase engagement, time spent, and influence on the player Quests Completing a set of tasks in the game world. Players must overcome a journey of obstacles / challenges. World of Warcraft: defeat a monster, pick up and deliver something. Customer recommendation: convince a friend to become a customer and receive a reward.  Different quests make the game more interesting and diverse  Indicate progression  Increase engagement, loyalty, time spent Reward Schedules A schedule mechanism by which rewards are delivered. Level up for killing 10 orcs in World of Warcraft, getting fresh crops in FarmVille after 30 minutes.  Provide feedback  Increase time spent, engagement, loyalty, and influence on the player. Status A system to indicate A high score rank, a  Increase motivation and 5 A description of the game can be found in appendix A.
  28. 28. 28 the rank or level of a player. league in football. competition  Increase engagement, time spent, virality, and influence on players. Virality A game element that requires multiple people to play or makes the game better when more people are playing together. FarmVille: players can become more successful in the game by inviting their friends to play. Group buying: receive a discount for buying something collectively.  Increase virality, awareness and the number of players  Increase engagement and influence on players Adapted from: (Gamification Wiki, 2012) (Zichermann & Cunningham, 2011, pp. 35-94) (Schonfeld, 2010) (McGonigal, 2011, p. 53) (Lebel, 2011) (Priebatsch, 2010) (Schell, 2010) When these defining elements of a game and at least some of these game mechanics are applied to a product, service or application, fun and play is created and we can speak of gamification. As Farmville and many others of today’s casual games, in which players basically perform banal tasks like planting crops, prove, a good game does not require an exciting theme or a thrilling setting. It is the use of intrinsic motivators, flow and the mechanics of a game that make it fun. (Zichermann & Cunningham, 2011, pp. 2-3) Knowing about these techniques and how to implement them is of vital importance for designing great, gamified products and experiences. Using intrinsic motivation, game mechanics and putting players into the state of flow is going to allow extraordinary user engagement.
  29. 29. 1.3 Digital marketing Technological change is one of the major factors that have shaped marketing strategy and practice in the recent years. The rapid advances in technology, and especially in digital technology, have made an enormous impact on the world. In particular, the widespread use of the Internet, new digital consumer hardware, and the social web had a major impact on buyers and the marketer who serve them. To stay competitive, marketers had to rethink their strategies and still have to constantly adapt to the rapidly developing digital environment. (Kotler, Wong, Saunders, & Armstrong, 2005, p. 128) As technology is becoming increasingly digital, new marketing channels are emerging. Information is less often processed in an analogue way and more often processed digitally, which means that it consists only of a stream of zeroes and ones, or bits. Computers and software are able to use this digital information or are able to convert analogue signals into digital information. Digital technology has brought us the Internet, digital television, personal computers, laptops, handhelds, tablets, smartphones and more. Unsurprisingly, marketers have already begun to use and benefit form this new technology by incorporating it into their marketing output. (Kotler, Wong, Saunders, & Armstrong, 2005, p. 129) 1.3.1 Definition Digital marketing is a sub branch of traditional marketing and includes all efforts to communicate about, promote and sell products and services by the use of digital technology and channels. (Kotler, Wong, Saunders, & Armstrong, 2005, p. 135) (Simply Digital Marketing, n.d.) Due to the diverse amount of digital technology, there are many different digital marketing channels available. Digital marketing can take various forms and includes:
  30. 30. 30 Online • Website • Online Display Advertising • Affiliate links • Search Engine Marketing • Search Engine Optimization • Email Marketing • Blogs & Forums • Social Media Marketing • Viral marketing • Online Games /Advergaming • In-Game Advertising Mobile • Messaging • Mobile web advertising • Mobile apps and mobile gaming • In-App advertising • QR codes • Location-based services Digital Radio • Radio advertising • Sponsorship • Podcasts Digital TV • TV Advertising • Sponsorship • Product Placement Digital out-of-home • Digital billboards • Video and/or audio content delivered via electronic devices (Simply Digital Marketing, n.d.) (Wetzel, 2008)
  31. 31. 1.3.2 Digital marketing methods There are two basic forms of digital marketing. We speak of pull digital marketing when the consumer is actively seeking for the marketing content like, for example, information about products or services, by visiting the company’s sources of information. The content is typically found on websites, blogs, or in streaming media such as audio and video. (Wetzel, 2008) In push digital marketing the marketer sends the message to the consumer by providing digital advertisements that are viewed by the consumer. Examples of push digital marketing are email, text messaging, and online display advertisement. (Wetzel, 2008) In the next part, only the most important digital marketing methods for gamification are described. Additional information about the other methods can be found in appendix B. 1.3.2.1 Online In online marketing, the power of the Internet is utilized to reach potential customers and promote and sell products and services. With more than 2.2 billion online user, the Internet is a main driver of digital technology usage and allows many different marketing methods. It has also enabled two-way interaction between consumers and brands on a global scale. (Miniwatts Marketing Group, 2011) (Your Dictionary, 2012) The most important online marketing methods include: Website: Brands and organizations set up their own website as a central element in online marketing. Usually, a website offers information about the brand and promotes the brand’s products or services. The website is designed to handle interactive communication initiated by the company. (Kotler, Wong, Saunders, & Armstrong, 2005, p. 145) Email Marketing: Email still is one of the most commonly used communication tools online. Brands are using email in a number of different ways for marketing purposes. They use email newsletters for the promotion of products, services or offers, for building customer relationships or to raise awareness. Furthermore, email is used very often as a contact and support tool. Brands can encourage their customers to send feedback, suggestions and complaints. Customer service employees can directly respond to incoming email messages. (Kotler, Wong, Saunders, & Armstrong, 2005, p. 153) Blogs & Forums: In the online marketing world, there is the possibility to make use of blogs, forums or other web communities for marketing purposes. A blog (or web log) is an online journal that is written by one person or a group of persons and is usually themed on a certain topic. A forum is a web community platform on which users can exchange views and communicate within the community. Most blogs and forums are independently organized, but there are also a few sponsored blogs or own company blogs and forums. Brands can advertise on blogs and forums by paying for sponsored posts, providing product samples for testing or posting messages themselves in the web communities. (Kotler, Wong, Saunders, & Armstrong, 2005, pp. 152-153) 31
  32. 32. Social Media Marketing: Social media marketing is a relatively new type of online marketing. The widespread popularity of social media sites such as Facebook, YouTube, Google+ or Twitter has attracted marketers to begin building their own brand pages/channels on the most popular social media platforms, creating social media campaigns and communicating regularly in the social media world. Because of its very nature of social interaction, social media marketing in particular is useful for generating brand awareness, creating interaction between consumers and the brand and building customer relationships. (Evans, 2010, pp. 1-8) Viral marketing: Brands use viral marketing by creating content or information, which is so extraordinary and entertaining that customers pass it on to their friends. The brand content is spreading like a virus among people. Viral content usually consists of interactive games or funny video clips. (Kotler, Wong, Saunders, & Armstrong, 2005, p. 149) (Your Dictionary, 2012) Online Games / Advergaming: Online games like browser games or social games have become very popular among Internet users. Many brands have created their own games and provide them free to play on the Internet. These games are mostly themed on the products and services of the brand. (Entertainment Software Association, 2012) 1.3.2.2 Mobile Six billion mobile subscriptions worldwide demonstrate that mobile devices and smartphones play an important role in modern day life and interactivity between people. Advances in digital technology have enabled the development of mobile devices with nearly endless functions. Unsurprisingly, brands also try to communicate and engage with their audience in an interactive way through mobile devices. (Mobile Marketing Association, 2009) (dotMobi, 2012) The most important methods of mobile marketing are: Messaging: Marketing through mobile messaging means using short messaging service (SMS) or Multimedia Messaging (MMS) to promote a brand’s products and services. (Kotler, Wong, Saunders, & Armstrong, 2005, p. 129) Mobile apps: Smartphones and other mobile devices allow the use of mobile apps, which are software applications specifically designed to run on mobile devices. Brands have the possibility to create their own branded applications for mobile marketing purposes or sponsor a publisher’s app. For example, brands can create an entertaining mobile app that allows the users to experience an augmented reality using their mobile device’s camera and display. (Mobile Marketing Association, 2011, p. 17) QR codes: In marketing, QR codes (abbreviated from Quick Response Code) are used to enhance print or out-of-home media with the possibility of mobile and online interaction. A QR code is a two-dimensional barcode that contains information. Consumers can access this information by scanning the QR code using an application on a smartphone or mobile device. In print advertising campaigns, for example, a QR code can be scanned to access a mobile website, on which consumers can find out more about the campaign or the brand’s products. (Denso Wave, 2010) 32
  33. 33. Location-based services: Location based-services use the mobile device’s geographical location to offer services or send custom advertising relevant to the specific location of the consumer. Through the use of a location based-service, brands can, for example, promote a local store, send custom offers to people in a certain area, etc. (Techopedia, 2012a) 1.3.2.3 Digital out-of-home Out-of-home advertising or outdoor advertising is advertising that reaches the consumer while he or she is outside the home. Traditionally, this advertising has been analogue, but new digital advertising media allow marketing using digital out-of-home technology, such as: (Outdoor Advertising Association of America, 2011b) Digital billboards: Digital billboards are able to create digital images or videos on large-scale outdoor billboard screens. (Outdoor Advertising Association of America, 2011a) Video and/or audio content delivered via electronic devices: In addition to digital billboards, there are various other digital outdoor media types, such as digital screens in public transportation, at events, in public buildings, etc. (Ströer, n.d.) 1.3.3 Digital marketing practice of brands Today, digital technology has migrated to the mainstream and has been adopted into standard marketing practice of nearly any brand. In addition to the older digital marketing types like television and online display advertising, there are new approaches evolving constantly. Social media marketing is one of the largest most recent trends, which brands and marketers have adopted after social media sites and services had gained widespread popularity among consumers. In fact, social networking is the most popular online activity worldwide and there are over 1.2 billion social media users. (Ryan & Jones, 2011, pp. 12-19) (Aquino, 2012) In digital marketing practice, very often multiple channels and methods are used at the same time and both push and pull techniques are utilized. For example, a marketing campaign is advertised on television and through online display advertising while at the same time consumers are asked to become fan of a social media page and a great amount of information about the campaign and the product can be found on the company’s website. According to Zenith Optimedia the allocation of Global Advertising Spend by media type has changed slightly over the last two years and is expected to change more over the next two years. (MediaBuyerPlanner, 2011) 33
  34. 34. Figure 5. Global ad spend by media 2010 – 2014 (MediaBuyerPlanner, 2011) (Zenith Optimedia, 34 2011) From 2010 to 2012, the share of ad spend on the Internet, one of the main digital media, has increased from 14.4 percent to 17.6 percent. Over the same time period, newspapers and magazines, both analogue media, lost part of their share of the global ad market. Television and outdoor ad spends have increased slightly. What can be recognized in this development is that over the last years digital marketing has been gaining popularity among marketers and brands. Analogue media like newspapers and magazines are losing the attraction of marketers while digital media like television and the Internet are used to a greater degree for marketing purposes. Furthermore, this development is expected to continue for the coming years as Zenith Optimedia predicts. The most drastic change is expected for Internet advertising spend. In 2014, the share of Internet ad spend is expected to reach 21 percent, which is a large increase from its 14.4 percent in 2010. At the same time, print media ad spend is expected to decrease even more. Large developments are taking place also in social media and mobile marketing. Social media and mobile make up some of the newest digital media types and have attracted large amounts of users in the recent years. When looking at the developments and forecasts in social media and mobile ad spend, it becomes clear that many brands already begun to increase or shift their marketing budgets towards this type of media. Although the total advertising share of social media is still small in comparison with the other media types it is becoming increasingly important for brands as the following graphic indicates.
  35. 35. 35 Figure 6. Worldwide social networking ad spending (Flowtown, 2010) From $480 million in 2006 to $4.3 billion in 2011, worldwide social networking ad spending has increased significantly over the last years. Ad spending on mobile advertisement has increased as well and shows a near 15% compounded annual growth rate since 2008. Mind Commerce estimates global spending on mobile advertising and marketing initiatives to reach $37.5 billion in 2012. A large part of that, namely $15.8 billion will be generated in the Asia-Pacific region, while mobile advertising spending in Europe will make up a share of $7.9 billion. (Mind Commerce, 2011) What this shows is that brands have realized the change in consumer behavior towards digital media and are increasingly shifting their marketing budgets to digital media types. Due to the diverse amount of marketing channels available today, a brand must become a multi-channel publisher. By actively participating in the digital media world and especially by joining the conversion on multiple social media sites, brands nowadays are able to engage customers more than they have been able before. Engagement with their brand is what most companies today are looking for when they are creating extraordinary digital marketing campaigns, manage their social media profiles or even when designing and launching their newest products. Audiences have turned into people that actively participate in the marketing communication process, which is why brands today increasing use digital media to speak with people and not at people. Those brands that are successfully engaging their customers via digital channels can expect to have advantages over their competitors, especially due to the value addition and the generating of brand experiences, which fits into the experience economy concept by Pine & Gilmore (1999) that has been explained before. (Ryan & Jones, 2011, pp. 12-19) (Solis, 2011, pp. 1-8)
  36. 36. 1.3.4 Objectives in digital marketing Before starting with marketing, it is highly recommended to set goals for any planned marketing activity. Ideally these goals should be related to the higher-level strategies and goals of the company, specific and measurable, time defined and realistic. Through digital marketing it is possible to attain many different marketing goals, in fact, many of the goals that brands define for their digital marketing activities are similar to the goals defined for traditional marketing. Common objectives that brands try to attain using digital marketing are: 1.3.4.1 Marketing/Media Increase brand awareness: Companies try to create awareness of their brand in order to be recognized by as many potential customers as possible. The percentage of potential customers or consumers who recognize or name a given brand indicates the level of awareness. Top of mind awareness is the highest form of brand awareness because it describes the first brand that comes to mind when a customer is asked to name a brand from a given category. All digital channels can be used to increase brand awareness. (Farris, Bendle, Pfeifer, & Reibstein, 2009, p. 33) (OMG FUSE, 2012b) Upgrade brand image: The brand image is the set of beliefs that consumers hold about a particular brand. A consumer’s beliefs can be shaped by his or her experience with the brand, what friends or society think of the brand, advertisement and many more. Brands may therefore try to improve their image by using digital marketing methods. Often, a marketing campaign may focus on improving certain attributes of the brand image like, e.g. young and modern attitude of the brand, product quality, price, and other. Since there are so many ways a brand image can be improved, all digital channels may be used for attaining this objective. (Kotler, Wong, Saunders, & Armstrong, 2005, pp. 282-283) (OMG FUSE, 2012b) Create interaction and promote recommendations: The Net Promoter Score is a tool to measure the loyalty of a brand’s customer relationships by asking consumers how likely it is that they would recommend a brand to a friend or colleague. The more “Promoters” a brand has, the more people keep buying and fuel growth by referring others to the brand. By making use of digital marketing methods, brands can promote interaction with their brand, which will ideally lead to recommendations from consumer to consumer and world-of-mouth spread. Especially interactive media, like social networks, video platforms, mobile devices and the Internet in general, are perfectly suited for generating interaction with a brand. However, one-way media channels like TV, radio and digital out-of-home media are also used in some cases to create buzz around a brand and fuel interaction and recommendations. (Satmetrix, 2012) (OMG FUSE, 2012b) Increase number and/or quality of leads: By using digital marketing methods, brands might also want to increase the number or quality of sales leads. If a target group can be reached very well via a certain type of media, a brand can become increasingly active on this media type and by doing so increasing the number of contacts to the target group. By reaching out to only those consumers who are very interested in purchasing a brand’s product and spending less time with consumer who are 36
  37. 37. not really interesting in a purchase, the quality of leads can be improved. Brands do this by tracking, analyzing, measuring and comparing the means they have at their disposal to reach out to their customers and generate quality leads. In digital marketing, brands seeking this objective, select only the channels and methods, which have proven to be suitable for increasing the number and quality of leads and might ignore other channels or methods. Channels and methods used may therefore vary very much depending on the specific target group of the brand. (OMG FUSE, 2012b) (Business Dictionary, n.d. c) 1.3.4.2 Customer relationship management Create customer bonds/relationships: Brands want to build long-lasting relationships with their customers in order to bind them and maximize the returns generated with each customer. In order to do so, brands need to collect all sorts of information about each individual customer and compile and organize all customer information in a central system. The information gathered can be used to identify the best customers to target or to customize the brand’s products or interactions with the customer. Additionally, fostering a regular dialogue and interaction between the brand and the customers can strengthen customer relationships. Social and mobile media have proven to be very suitable for both gathering valuable information about the customer and also increasing interaction with the brand. (Kotler, Wong, Saunders, & Armstrong, 2005, pp. 481-482) (OMG FUSE, 2012b) Deliver/improve customer service & support: A great customer service and support contributes very much to customer satisfaction. And satisfied customers are more likely to return or recommend the brand to friends. Also digital media channels are used for delivering customer service. Many brands offer support and customer service via their website or email. Offering help to customers on social media brand profiles is also a great way to improve the brand’s customer service or deliver support quicker and to more people. Digital marketing channels and methods are therefore definitely an option for brands trying to improve their customer service. (OMG FUSE, 2012b) (Business Dictionary, n.d. a) Increase customer loyalty: Loyal customers can provide huge benefits to brands. By promoting loyalty among customers, brands can maximize their return for each customer. In addition, brands can make their customers become strong supporters and fans. In the social and interactive media world, where anyone can reach out to millions of people easily and publish critical statements about brands, it is great to have customers who are likely to support the brand even in tough situations and defend it against any criticism. Brands therefore use digital marketing channels and methods to offer promotions for loyal customers or even elect the top brand fans via social media campaigns. (OMG FUSE, 2012b) (Kotler, Wong, Saunders, & Armstrong, 2005, pp. 407-408) (Jackson, 2011) 1.3.4.3 Market research / product development Generate target group insights: Today, it is possible to generate a lot of information about consumers or a brand’s target group using digital media. This provides the advantage of 37
  38. 38. understanding the customer’s characteristics and needs better so that brands are able to adapt their products or services and their interaction with potential customers. The possibilities of interactive digital media like the Internet, mobile devices, and more allow brands to increase customer engagement. When customers are engaged and actively take part in conversations, they are likely to provide a great amount of information that can be of great value for brands. (OMG FUSE, 2012b) 1.3.4.4 Financial / Sales Conversion of sales: Probably the most important marketing goal of any profit-driven brand is to generate more sales as a result of marketing efforts. In order to do so, brands need to move prospects through the buying process by providing them with all of the information they need to make a purchase decision. In practice, only a few digital marketing efforts of brands are designed to directly generate sales. The most common digital marketing method, which allows customers to make a purchase directly, is an online-shop on the brand’s website. Others digital marketing methods rarely allow customers to make purchases directly, but might be used to move prospects through the sales funnel. (OMG FUSE, 2012b) (Marketing Terms, 2012) 38
  39. 39. 39 2 Methodology In the previous chapter, the most important literature and theories on the topic of gamification and digital marketing have been analyzed. Some of the research questions that were defined for this thesis have already been answered, namely the first three questions. However, the information that can be found in the literature is not able to answer any of the remaining research questions in a complete and satisfying way. In order to answer these questions, which are listed in the following, additional research has to be conducted.  Where can gamification be implemented in digital marketing? Where not?  Which marketing objectives in particular can be attained through the use of gamification? Which not? What is the benefit of gamification?  What is important to consider when making use of gamification in digital marketing?  How can brands implement gamification in their digital marketing? Gamification is a very young approach. Due to this fact, only a limited amount of information is available yet on the topic and there are just a few experts, which have studied gamification so far. Quantitative datasets about gamification are not available and the means for generating larger datasets or even testing a gamification application are not available either. However, a qualitative research approach including semi-structured interviews with experts on gamification and digital marketing provide a solution for answering the research questions. In addition, multiple case studies will be conducted which provide the advantage of taking the practical aspects of gamification in marketing into account. (Higher Education Academy's Centre for Sociology, Anthropology and Politics, the Centre for Social Work and Policy and Sheffield Hallam University, n.d.) (Saunders, Lewis, & Thornhill, 2007, pp. 117-119; 139-140; 310-313; 470-515; 527) Since the research is designed to be inductive, the collection of qualitative data makes sense, too. As fewer assumptions are placed on the research topic, a qualitative approach suits this kind of exploratory research and hypothesis generation. However, by using qualitative research, the findings may not be conclusive. They will allow an initial and theoretical understanding of the application of gamification to digital marketing. (Saunders, Lewis, & Thornhill, 2007, pp. 117- 119; 139-140; 310-313; 470-515; 527) (Higher Education Academy's Centre for Sociology, Anthropology and Politics, the Centre for Social Work and Policy and Sheffield Hallam University, n.d.) Interviewees that have been selected for the research and accepted to participate in an interview include:  Andreas Harnischfeger, Group Manager at media agency OMG Fuse.  Markus Breuer, Author of the weblog intelligent-gamfication.de and founder and CEO of The Otherland Group, a multimedia agency focusing on business in virtual worlds.  Mario Herger, Senior Innovation Strategist and global head of the Gamification Initiative at SAP; Author of the website enterprise-gamification.com. The interviews are conducted via online voice chat or email correspondence. The interviews are semi-structured and non-standardized meaning that a list of themes and questions to be covered is
  40. 40. used. Questions vary from interview to interview depending on the expertise of the particular interviewee. However, some questions are the same for two or more interviews in order to provide some structure and allow a comparison between the opinions of different participants. (Saunders, Lewis, & Thornhill, 2007, pp. 310-325) For the case studies, three of the most extensive gamification applications are analyzed, namely: 40  The Buffalo Wild Wings SCVNGR campaign  The Nike+ products and gamification experiences  The Greenpeace VW Dark Side campaign Data about the cases are collected via multiple secondary sources and own observation and documentation. Unfortunately, it was not easy to find suitable gamification cases since only a few more extensive gamification applications have been launched so far. Additionally, many gamification cases were not documented properly or the data is not publicly available, which limited the amount of cases that may be used for a case study. Furthermore, experts on gamification are rare, too. The most active experts researching and experimenting on gamification like Gabe Zichermann, Jane McGonigal, Seth Priebatsch or Sebastian Deterding have been contacted and asked for an interview. However, most of them are very busy and were not able to participate in an interview. Luckily, a few other experts on the topic accepted to participate in an interview for this thesis. Markus Breuer was contacted due to his elaborate blog articles about gamification and Mario Herger for his expertise with practical gamification projects. Andreas Harnischfeger served as an interviewee to add information from the point of view of a marketing/media agency and its clients. Markus Breuer had to reschedule the interview several times unfortunately, but nevertheless he managed to find the time to do the interview. The interviews with Markus Breuer and Mario Herger were held via Skype for approx. 30-45 minutes and were recorded to an audio file with the computer. Later on, the conversation was transcribed and translated, which took more time than expected. There were no problems with recording the interviews, but the Skype connection quality was bad during some parts of the interview with Mario Herger unfortunately. However, the most important parts could be transcribed by carefully listening to each part over and over again. The interview with Andreas Harnischfeger was conducted via email correspondence to save some time since no transcription was necessary. In the end, all interviews that were held for this thesis contributed valuable information for answering the problem statements. (Saunders, Lewis, & Thornhill, 2007, pp. 470-515; 527)
  41. 41. 41 3 Findings 3.1 Gamification case studies A couple of brands have already experimented with the concept of gamification and launched their own gamified products, services or marketing campaigns quite successfully. In addition, there are a few relatively new companies that offer gamification software solutions. These gamification service vendors particularly offer the implementation of simple game mechanics like reward systems (points, badges), leaderboards and incentives on any website or software in order to engage and motivate its users. (Deterding, 2011a) (Deterding, 2011b) (Breuer, 2011b) In the following, some of the existing gamification cases are explained and analyzed. 3.1.1 Gamification service vendors Bigdoor Bigdoor offers gamified loyalty and rewards programs for web and mobile sites. Customers can also manage, track and analyze results and have social features integrated. Game mechanics like quests, virtual currencies, sweepstakes and reward systems are used in Bigdoor products. (Bigdoor, 2012b) For the second season of “Big Brother” on Swedish television, Bigdoor integrated its gamification techniques on the TV network’s website to drive more traffic to the site. Figure 7. Big Brother Superfans Leaderboard by Bigdoor (Bigdoor, 2012a)
  42. 42. According to Bigdoor, after six weeks the program saw a 365% lift in user loyalty and a 1,000% increase in user engagement. (Bigdoor, 2012a) Badgeville Badgeville offers software services for web and mobile sites to track, manage, and reward user behavior using gamification techniques. Their products are designed to reward quality customer and employee behavior, increase user engagement and add social networking features to a brand’s web or mobile site. (Badgeville, 2012b) 42 Figure 8. Badgeville's Widget Studio & API for web and mobile sites. (Badgeville, 2012a) Badgeville’s Widget Studio & API, for example, adds a collection of skinnable and configurable gamification widgets to a site. These widgets can include a leaderboard, achievements, notifications, a rewards system, a level system, social features, scores and more. (Badgeville, 2012a) Bunchball Bunchball offers a gamification platform to influence user behavior and optimize how users interact with a web site. It provides a set of game mechanics, including challenges, achievements, and virtual goods, as well as an analytics platform. (Bunchball, 2012b)
  43. 43. 43 Figure 9. HopeLap for ZAMZEE by Bunchball (Bunchball, 2012a) Gigya Gigya offers social and gamification infrastructure for businesses. Its gamification platform includes some gamification plugins, a gamification API, and a gamification analytics tool. (Gigya, 2012b) Leaderboards, achievements, progress bars, and other game mechanics are used to drive user engagement. (Gigya, 2012a) What all these gamification service vendors have in common is that they make use of several game mechanics to influence behavior and increase engagement. They make use of status elements like leaderboards, badges and ranks. They offer level systems, progression mechanics, points, achievements, profiles, and in some cases some avatars and some customization, which works and increases engagement. However, their products very often lack the ability to take other core elements of gamification into account. If game mechanics like reward systems or badges are just simply added to a website, user engagement might be increased on the short term, but long-term effects through intrinsic motivation and flow are very unlikely. In fact, user engagement and loyalty generated in these cases cannot be recognized as authentic. It is therefore very important to think of gamification as a holistic approach and take all of its elements into account when designing gamified products or services, including but not solely game mechanics. The missing ingredients in many of these cases are meaning, mastery, and purpose as defined by Pink and the intrinsic motivators defined by McGonigal respectively. (Deterding, 2011b) (Breuer, 2011b)
  44. 44. 3.1.2 Mobile applications for gamified experiences In addition to those gamification service providers, there are some mobile applications that make use of gamification techniques. Brands can utilize these mobile apps to add gamified experiences to their marketing. foursquare With foursquare, mobile users can join a location-based social network to stay in contact with their friends and see what their friends are doing. Registered users can “check-in” to local places and venues to tell friends about their current activity and location. In order to motivate users to check-in more often when they are visiting places or shops, foursquare rewards check-ins with points, badges or special offers. These gamification mechanisms also benefit brands that offer users to check in at their local stores, for example. By offering rewards for top visitors in foursquare, users are motivated to check-in frequently at the stores, which means they have to visit the store more regularly. Also, every check-in and reward is communicated to the user’s friends within the social network to promote the brand even more. (foursquare, 2012) 44 Figure 10. foursquare on an iPhone (Arrowsmith Websites, 2011) Foursquare also offers a platform for brands through which brands can create pages and allow users to “follow” the brand and receive tips and information when they check-in at certain locations. Some brands also created their own badges that users can earn with enough check-ins. Starbucks, the global coffee chain, is one of the most active and popular brands on foursquare. Users who check-in at a Starbucks café can earn points and complete quests like “visit 5 different Starbucks” to earn special badges. (Bunchball, 2010)
  45. 45. SCVNGR A similar mobile application that uses gamification techniques is SCVNGR. With SCVNGR, users can select nearby places and are able not only to check-in at these places, but to complete more complicated challenges like taking a picture of something at a place. As users do challenges at certain places, they can earn points and get rewards like special offers. With SCVNGR, brands can also create individual and unique challenges at their places and decide how users are rewarded when completing their challenges. (SCVNGR, 2012a) (SCVNGR, 2012b) 3.1.3 Case study: Buffalo Wild Wings In January 2011, SCVNGR partnered with Buffalo Wild Wings, a restaurant and sports bar franchise in the US, at all of its 730 locations for a 12-week campaign. Buffalo Wild Wings is especially popular among sports fans as a place to watch the game. With SCVNGR’s gamification techniques in place, visiting one of the restaurants became a gamified experience and restaurant guests were able to participate in competition, community, and gaming themselves. (BFG Interactive, 2012) (Drell, 2011) The goals Before the campaign was launched, Buffalo Wild Wings identified several marketing goals, which they aimed to attain. These goals included generating earned media6, creating deep consumer engagement through fun, increasing customer loyalty, positioning the brand as “home court” to watch sports, highlighting featured products and driving revenue. (Drell, 2011) The campaign Restaurant guests had to download the SCVNGR app for their Android or iOS smartphone. At the restaurants and with SCVNGR they were able to do basketball themed challenges, which were specifically scripted for the campaign and the restaurant. After checking in at a restaurant, players could e.g. pose for a picture with someone rooting for the opposing team, take a photo of the sauciest wing in the bucket, capture the crowd going wild, or do other challenges. By completing challenges, guests could earn points and unlock rewards, including a $5 off coupon, free drinks and free food. Once a player completed a challenge, he could also create his own challenge on SCVNGR and allow other players to complete it. The grand prize was a trip to the NBA finals with Scottie Pippen, a retired basketball star. There was also a web integration, which allowed players to track their progress via online leaderboards. (BFG Interactive, 2011) (BFG Interactive, 2012) (Drell, 2011) 45 6 The term “earned media” is explained in appendix A.
  46. 46. Figure 11. Web integration of Buffalo Wild Wings' SCVNGR Challenge (BFG Interactive, 2012) 46 Figure 12. Challenges and impressions during the campaign (Drell, 2011)

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