Time to play, money to spend

Webkinz and Club Penguin struck gold by attracting millions of kids to their online worlds and keeping them there. What makes their sites so sticky?


Ganz's Webkinz.com and a site called Club Penguin were early entries into this market, but they've been joined this year by the giants of tween marketing: Disney (Charts) and Nickelodeon (Charts). What started as an Internet sideline for a plush-toy company is shaping up as a battle for the hearts and minds of a generation.

It's a battle that bears watching by anybody interested in making money on the Web, because once children aim their browsers at one of these virtual worlds, they tend to stay there, not just for a few minutes but for hours at a time. The sites are, in the jargon of the webmaster, extraordinarily sticky.

Imagine Beanie Babies in cyberspace and you have a pretty good picture of what Ganz is up to. The company sells its Webkinz--special-edition plush toys with names like Googles, Cheeky Monkey, and Love Puppy--for $10 to $12.50 apiece.

It's a model that can be enormously seductive. Ganz reports that toy buyers have snapped up more than 2 million Webkinz pets since April 2005 and better than 1 million users have registered online. More than $20 million in retail sales in less than 24 months is considered pretty good money in the plush-toy business. Ganz is privately held and won't disclose its profit, but to put that growth rate in perspective, it took Second Life three years to attract the first 1 million "residents" to its virtual universe.

traffic has mushroomed. Club Penguin saw 2.9 million unique visitors in January, according to Nielsen/NetRatings, up from just 705,000 in March 2006.

This is an important feature: Webkinz puts strict limits on how much time kids can spend on any activity--a "leave 'em wanting more" strategy that is one of the secrets of the site's success. Webkinz's traffic ballooned from 1.1 million unique visitors in November to 1.9 million in December. Moreover, kids spent an average of two hours and eight minutes per visit on Webkinz between April 2006 and January 2007. (YouTube, by contrast, averaged 32 minutes per visit during the same period, while Club Penguin averaged 54.)

Club Penguin and Webkinz trumpet their sites as safe, ad-free environments. Disney and Nickelodeon are more frankly commercial and--in a big shift--ad-supported. Marketing to kids is always tricky; no one wants to be seen shilling to children. And whether the kids will buy the branded content, or the products advertised, remains to be seen.

But the biggest question hovering over this whole market is what the kids will want in the future--like next week. The most carefully crafted strategies can be blown up by an overnight shift in whatever adolescents deem cool.

Just ask Crandall. She can reel off a dozen reasons she now prefers Webkinz to Club Penguin but doesn't hesitate when asked how she finds the hottest new games. It's easy, she says. She asks her friend Danielle.

Article Link