• by Larry Dobrow , February 2, 2004

The online phenomenon alternately referred to as advergaming and branded entertainment will take another small step forward today when RadioShack unveils the third in its series of games created by Shockwave.com. "ZipZaps Special Edition," which showcases a series of RadioShack racing toys, is aimed at the teenage boys who drive sales of the burgeoning product line.

What makes RadioShack's enthusiasm for the Shockwave creations so unusual is that few retailers have attempted to expand brand loyalty and/or spur sales via online games that incorporate marketing content. Granted, the advergaming model isn't exactly a natural fit for retailers--it doesn't lend itself to limited-time offers or sales--but one might have thought that RadioShack's prior successes with the games might have awakened competitors to their benefits: the first two ZipZaps games have generated more than 23 million game plays. Packaged goods (Pepsi, Kraft/Nabisco) and automotive companies (BMW, Chrysler) have seen similarly positive results.

"Why this program works is that the games are sophisticated," says AtomShockwave Chief Executive Officer Mika Salmi. "This audience [teenage boys] would reject it if it weren't. They have PlayStation 2 and Xbox. With a lot of other things you see online, so much of the content is obviously an ad."

The RadioShack game arrives a few weeks after Gartner unveiled a report forecasting an upcoming surge in advergaming efforts. The report claimed that advergames are particularly effective in growing brand and product awareness, customer loyalty, and time spent at a marketer's Web site.

"With these games, advertisers can communicate with the online audience, but not in a hard or direct way," Denise Garcia, Gartner's principal analyst, media and advertising, told MediaDailyNews shortly after sneak-previewing the report at last month's Consumer Electronics Show in Las Vegas. "When people go online, they're looking for content and they're looking to be engaged. The games satisfy both of these needs."

Salmi sniffs at a suggestion that online gaming aficionados-traditionally men between the ages of 18 and 34 with a household income of less than $50,000, according to the Gartner report--will avoid anything that feels remotely commercial. "Will people see the name of the game and think 'oh, it's RadioShack, we're not playing it?' I doubt it," he responds. "To players, RadioShack is just something slapped on [the game]. They don't get bombarded with messaging."

This, perhaps, may be the reason that marketers outside the packaged goods and automotive categories haven't yet fully embraced branded entertainment: doing an advergame right requires a company to de-emphasize its product or brand messages somewhat. "That's what makes RadioShack a great partner," Salmi explains. "They understand that this game isn't necessarily about their brand, even though it was built from scratch for them." While Salmi declines to reveal the cost of the ZipZaps games, he notes that the Shockwave model-the company is paid to advertise the game on its web site, which boasts upwards of 20 million users each month--defrays the overall cost substantially. "We don't look at the games we do as a profit center," he adds. Highly customized advergames can cost as much as $500,000.

Assuming that companies dabbling in branded entertainment don't lose sight of the fact that their primary goal is to entertain ("if consumers see the end purpose as something commercial, forget it," Salmi says), the future of advergames and similar online efforts appears quite bright. In 2004 and beyond, look for online games and the characters that populate them to jump across mediums--probably first to mobile phones. Such a shift, Salmi believes, will spur more marketers to overcome their reluctance to such programs.

"Brand [marketers] should be perfect for this," he notes. "They have the budgets to make it happen and push the envelope a little bit. It's a risk, but it's one that has already paid off for a lot of [companies]."