Wednesday, October 17, 2007

Are kids ready for ads in virtual worlds?

Some [virtual worlds] boasted of successful experiments with
marketing. For example, preteens are driving virtual Toyota Scions on
sites such as and Gaia Online, and they're wearing the
latest digital fashions from DKNY at Nickelodeon also talked about coming plans to run "immersive" ads in its 3D environment for kids ages 7 to 14.

roduct companies creating branded content to appeal to kids is as
old as the first days of television. But Montgomery and others say
virtual worlds and related games change the equation for brand
marketers because a child's interaction and emotional engagement is so

"This is a very powerful medium for marketing because it involves
this huge engagement. It's more powerful than a sugar cereal
commercial," said Bob Bowers, CEO of Numedeon, whose Whyville members spend about
three and a half hours a month on the virtual world. He added: "Therefore there need to be standards."

So far, the only regulations protecting kids online are through the
Children's Online Privacy Protection Act (COPPA) of 1998. The
legislation stipulates that sites targeting children under the age of
13 must post a detailed privacy policy and obtain permission from
parents to collect any personal information about them. COPPA doesn't
deal directly with advertising.

Research firm Parks Associates expects that advertisers will spend $150
million in virtual worlds by 2012, up 10 times the spending in 2006.
Though still a relatively small amount, it excludes marketers spending
on their own virtual worlds, like

Companies that have experimented with advertising in virtual worlds
include Disney, Capitol Music Group, Kellogg's, Pepsi, Toyota and
Warner Bros. In one example of such campaigns, pay-as-you-go mobile
phone company Kajeet opened up a "chat factory" in Whyville this spring
that allowed tweens to personalize their chat bubbles by color and

Club Penguin has attracted as many as 4.7 million users in
September, up 147 percent from a year ago, and it is expected to mark
$35 million in earnings--before interest and taxes--from subscriptions
this year. Disney bought Club Penguin for $350 million in August.

Nickelodeon launched its kid virtual world Nicktropolis in January, and
10 months later, the site has nearly 5.5 million users who spend an
average of 55 minutes per visit.

But Whyville's Bowers said at the conference that kids are more
sophisticated about marketing than people suspect. "You just need to do
it in a different way," Bowers said. "It has to be something they will
contribute to and own, and not to broadcast to them."
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