Activision Endangers Profits For Ad Campaign

by Josh Lovison, Sep 30, 2011, 3:30 PM

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Interesting news this week. Mountain Dew and Doritos have partnered with Activision on a new promotion for "Modern Warfare 3" called "RankUpXP." This promotion will allow gamers who redeem codes from Mountain Dew and Doritos products up to 24 hours of "double XP" gametime (time during which actions in the game result in double the rewards other players get ). 

This is a brilliant move for both brands. They've plugged their product sales directly into a feedback loop that powers one of the most successful gaming franchises out there. I have little doubt that this promotion will move substantial product and I'd love to see the numbers after it's done. I would even venture to predict that unit sales will increase more than any other gaming/CPG promotion we've seen so far. While overall success would need to account for the cost to the brands in getting Activision on board, I expect that they will consider it a resounding success after the promotion ends in December. 

That said, what is Activision thinking?? They've broken one of the most sacrosanct rules for publishers in game advertising: "Don't let an advertiser endanger your bottom line." The rule comes out of the economics of the industry. The frustration for advertisers dreaming big in core gaming is that if the revenue for a game publisher were a pie chart, the sliver that represents advertising revenue would be near-invisible if shown to scale. If consumers are paying $60 a pop for a game, a single lost sale due to inclusion of ads would require about 3,000 impressions at a $20 CPM to break even. Promotions are obviously a different economic force than display ads -- but still, the money involved in selling the games greatly outweighs revenue from an ad campaign, and generally speaking most publishers don't care about courting Madison Ave. 

Oh, and Activision isn't exactly on solid ground with MW3. First off, Infinity Ward, the studio that established the franchise, is no longer developing it (well, according to Activision they are, but since all the guys at Infinity Ward now seem to be at Respawn, it seems only the Infinity Ward trademark is still developing it). This could result in a game less polished than its predecessors, which will result in lower reviews. They're going head-to-head in both genre and gameplay with EA for "Battlefield 3," which is due out a few weeks before MW3. And that competition looks pretty fierce (if Google Trends is any indicator). And their "Call of Duty Elite" paid service certainly reeks of gamer exploitation already. 

Activision seems dead set to kill the goose laying golden eggs. Core games, especially popular ones, consistently avoid "pay for performance" tactics. Activision might want to have asked Blizzard (whom they merged with) for advice. In "World of Warcraft," gamers can spend money at the official store for vanity items only, not anything that changes gameplay (and players were more than happy to do so). In the upcoming "Diablo III," Blizzard will be capitalizing on a "pay for performance" market, but only by facilitating one that is player to player. 

First person shooter gamers are going to be facing a decision in Oct/Nov between "Battlefield 3" and MW3. Both start at the same price, but the latter encourages an additional paid subscription service, and a promotion that gives double rewards to players that choose to drink green liquid and eat orange chips. Is this a joke? EA must be doing a happy dance in their boardroom right now. 

This was so stupid. The general idea was great. Brilliant, even. But the reward should have been things like exclusive weapon skins or badges, not game-enhancing effects. The XP system is the backbone of the "Modern Warfare" franchise, and what revolutionized all FPS multi-player post-"Counter-Strike." This is the last mechanic they should have been messing with for the sake of a product promotion. 

Again, both Mountain Dew and Doritos are going to make out well in this promotion, and it was a smart initiative on their part. Kudos to them. But for Activision, it's time to level up as a game studio before it's game over.

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0 comments on "Activision Endangers Profits For Ad Campaign".

1. Jeffrey Burke from Marketing
   

   commented on: September 30, 2011 at 4:17 p.m.

   Gamers get alarmed by cash-purchased advantages, unless they've changed the game from previous iterations, this is nothing more than a "vanity item" rewarded via promotion. Won't cause a problem at all. "double" xp has no effect on game play. You're 100% right if somehow it made you "better at the game" but this doesn't.

2. Fitzjohn Flynn from rewarding media
   

   commented on: September 30, 2011 at 10:24 p.m.

   This is a one day event for activision vs. promotion on CPG products with a longer than 24 hour shelf life. Double rewards does not translate into lost sales. i am sure the marketing value of the CPG was closely scrutinized and i dont think this bad at all for activision....

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