Beyond Breakout

Imagine this. You’re on a cobblestone street. The sun is low and red between the high-rises, making you squint as you scan for clues. There, on a half-obscured flier on a wall, you see it: a picture of an anchor. You hold your phone in front of it. The gaunt and smirking ghost of an admiral appears on your screen. He gives you a subtle nod before pointing to an unlabeled door. You push it open. Inside is an elegant woman holding a serving tray. “Congratulations,” she says. “You’re the first to find the secret stash of the new Admiral añejo tequila. Have a glass, courtesy of the Admiral.”

Is this real life or a fantasy world? It’s a high-tech combination of both, and it’s a scenario that could happen today. Thanks to the rapid evolution of mobile technology, smartphones have transformed the real world into a giant game board, allowing users to interact and compete in ways that were science fiction a decade ago. Whether you’re fighting to be Foursquare mayor of your favorite coffee shop or searching posters for hidden QR codes to reveal hints about a new movie, it’s clear that businesses have more ways than ever to engage their fans and make day-to-day life more fun. For advertisers and the brands they market, the potential is virtually limitless, which makes it a given that most big brands can hardly wait to get in on the action, right?

Well, not quite. A surprising number of companies are sitting on the sidelines, largely because real-world gaming simply hasn’t proven yet to be a safe investment. As with many cutting-edge technologies, the experimenting is left to the pioneers, those willing to risk time and money on the theory that people actually want more marketing in their daily lives. And so, for every ambitious brand giving out rewards for Foursquare check-ins or getting attention with digitally driven scavenger hunts, there are many more that, for now, are waiting to see what happens.

In the opinion of Paige Worthy, those wait-and-see brands are missing out. Worthy, a 27-year-old editor based in Chicago, has been using location-based application Foursquare for more than a year. When Foursquare users check-in from a specific place, the mobile service lets them alert their friends to their whereabouts and share tips with other visitors. The advertising potential for such a service is obvious, which is all the more reason Worthy can’t understand why most local businesses aren’t offering discounts or prizes when users check-in. “It would be so cool if you actually got some recognition for going someplace,” she says. “I don’t need much.” Foursquare users, she adds, are “all pretty much into the token recognition and the little perks we can get for being total dorks.”

One reason brands have not been making obvious connections with would-be customers has to do with the technology itself. Foursquare generally requires a smartphone and, right now, most Americans don’t own one. Smartphones make up 23 percent of mobile devices in use, according to Nielsen. The number is growing quickly, but the audience is still sliced too thin, it seems, to justify investment from most big brands.

Sarah Hofstetter, svp of emerging media for digital agency 360i, puts it this way: “When you’re comparing [smartphone-based outreach] to a 30-second TV spot-a reach of 1 million versus tens of millions — it’s hard to connect the dots.” Getting large brands to sign on to real-world gaming initiatives, she adds, “is a matter of convincing marketers that there’s scale and reach.”

It’s also something of a crapshoot. Think of how many years it took for Facebook and Twitter to emerge as clear winners of social networking, and a similar struggle for survival of the fittest is just beginning with location-based services, mobile platforms and augmented reality techniques. Brands want to invest with the winners — a task that’s not easy when it’s unclear what the winners will be.

Of course, while the first businesses to venture into real-world gaming shoulder the greatest risk, they have the potential to reap high rewards. Take, for example, Bravo’s foray into Foursquare. In January, the network created branded badges that fans could earn by checking into locations linked to shows such as Top Chef and The Millionaire Matchmaker. The competitive gaming element of badge hunting made the network’s Guides by Bravo iPhone application an instant hit-and the novelty of the partnership generated news coverage around the world.

“That fun factor was so important that within two weeks of launching the Foursquare partnership, we saw a 31 percent increase in downloads,” says Ellen Stone, Bravo’s svp of marketing. “Our consumers really like gaming and they like experiencing things in new ways.”

Like, say, free perfume. In June, Bravo raised the stakes via a promotion with cosmetics chain Sephora. Fans who’d already earned the requisite Real Housewives badge via Foursquare raced to specific locations (after being tipped off on Twitter), where they snared $100 Sephora gift certificates. The contest showered Bravo with even more media attention, mainly because it was one of the first brands to offer a major reward with Foursquare, not just a token discount.

According to Omar Gallaga, a technology writer and contributor to NPR’s All Tech Considered, the Bravo/Sephora gambit made sense because it matched reward with initiative. “If you’re taking the time to check in and participate,” he says, “you want to have something in return.” Thus far, Gallaga says, most businesses using Foursquare are offering little more than $1 off coupons or other small discounts.

Augmented reality, a technology that’s finally set to enter daily life, provides another opportunity for brands to connect with customers. AR essentially combines digital images or information with real-world footage seen through the lens of a camera. Usually, the user holds up a special symbol in front of a Webcam while logged into a special application. So far, few brands have been willing to take a chance on it.

Adidas is one that has. The company released five sneakers with the requisite code stitched into the tongues. If a user holds the sneaker up to his or her Webcam while logged into the Adidas site, the shoe becomes a joystick enabling him or her to navigate a special 3-D world.

While new, the technology is prevalent enough for Uncle Sam to have used it as well. In a separate — if slightly less sexy — initiative, the U.S. Postal Service used augmented reality to allow customers to visualize various sizes of Priority Mail shipping boxes.

These promotions are still rare, however, and they wouldn’t have happened just a few years ago. Until recently, very few mobile devices had the hardware required to bring augmented reality into the real world. That changed on June 7 with the introduction of Apple’s iPhone 4-1.7 million of which were sold in the first three days of release.

The device’s many notable features include one underappreciated addition: a gyroscope. This small but powerful upgrade empowers the iPhone with the same accuracy as a missile guidance system — and gives new meaning to “targeted marketing.” The gyroscope’s capabilities, combined with the iPhone’s advanced video features, mean augmented reality’s time has truly come.

“There are hundreds of augmented reality applications on the way,” says Noora Guldemond, head of marketing for augmented reality firm Metaio, which helped create the Adidas project. “Everybody now wants to jump on this wagon, whether that’s [through] advertising or sponsoring an application.”

Augmented reality apps have a lot of practical potential, like helping users navigate a new city or find their seats at crowded stadiums. But they also open up a whole new dimension for marketing and gaming. “I would expect devices like the new Nintendo 3DS and the iPhone to include holographic AR overlays being piped to your mobile devices inside malls, at theme parks, airports and so on,” predicts mobile blogger and tech writer Stephen Northcott. “Imagine Mickey Mouse jumping out in front of you, or Mario in 3-D when in a game store and telling you about his next great game, and walking you through the store to where you can pick it up.”

Industry experts say gaming can help take a brand’s marketing message beyond the store. Augmented reality, for instance, takes the idea of Foursquare competition and scavenger hunts to their logical extremes: virtual games that can be played anywhere by anyone, while remaining completely invisible to the rest of the world.

For instance, Guldemond’s firm, Metaio, has already created a game, Zombie ShootAR — available for free demo download for select Nokia devices — that lets users look through a mobile device and shoot zombies as they rise from the ground in front of them. Admittedly, participants might look a little silly in the eyes of folks who can’t see the living dead lurching toward them. Nonetheless, marketers are intrigued when Guldemond demonstrates the game at conferences, largely because she’s showing mobile in a new, engaging way — a feat that’s remained a kind of holy grail for brands large and small.

“The question is always, ‘How do I stand out?'” Guldemond says. “Everybody’s looking for the killer use case they can try on a mobile device.”

But there are still several obstacles that stand between marketers and the mobile, augmented reality game world they dream about. For one, brands usually want to fold augmented reality into their own mobile tools instead of partnering with a third-party app, Guldemond says. The downside is that this approach can fragment audiences across many branded apps instead of helping create one popular augmented reality game with multiple sponsors.

“I think there’s a little bit of an app fatigue,” Gallaga says.

Another reason to question the potential scope for augmented reality gaming is the U.S.’s slow adoption of QR codes, those black-and-white icons that can be embedded with data and scanned by most smartphones. QR codes are downright simple compared to augmented reality. With little more than a few Google searches and a printer, users could create a whole game built around them in one afternoon. And yet the QR code remains a novelty in the U.S. marketing landscape.

In Asia, by contrast, these codes are an inescapable part of daily life. “In Tokyo, you can barely move for QR opportunities at most big retail outlets and on graffiti walls and fliers,” says Northcott, who lives in Thailand.

It’s not an issue of mobile adoption, he says. It’s about a cultural willingness to try something new, even if it doesn’t work quite as well as marketers might like.

When it comes to real-world gaming, U.S. marketers for sure have reasons to keep their distance: audience reach, slow adoption rates, partners that are little more than basement startups and investment returns that can optimistically be called “questionable.”

But as businesses debate the obstacles versus the merits, real-world gaming will continue to grow, evolve and approach the potential for a mainstream explosion of FarmVille proportions. And when that day comes, marketers will be reminded of the one rule universal to all games: You can’t win if you don’t play.

Technology Rocks: The tools behind the gaming trends

GPS

Developed for military use in the 1970s, satellite-based Global Positioning System technology didn’t get much public attention until it was added to mobile devices and car navigation in the 1990s. Today, GPS is the backbone for location-based applications like Gowalla, Foursquare and Yelp.

What’s next: Facebook is finally rolling out its own location-based features, which could be a game changer in a field currently led by small startups.

QR Codes

Quick Response codes have been tremendously popular in Asia for years, but are just now hitting the American mainstream. Easy to create (just search for “QR code generator” online), these codes can link to almost any site or embed information such as phone numbers and e-mail addresses. Any mobile device with a QR scanner app can pull up the information.

What’s next: Look for QR codes to start popping up on product labels, magazine ads, posters and just about anything else that wants to drive consumers to a site with more information.

Augmented Reality

One of the most buzzworthy tools in marketing today, augmented reality blends digital imagery with the real world. Using cues such as logos or GPS coordinates, programmers can make images and information pop up on screens in real time. So far, marketers have mostly used Webcam applications, such as Esquire’s popular AR issue and Doritos’ Blink 182 “concert on a bag.”

What’s next: Thanks to the addition of a highly accurate gyroscope and video upgrades, the iPhone 4 could be the first device to bring mobile augmented reality to the masses, creating endless potential for real-world games and virtual entertainment.

Games People Play: Hunts and giveaways generate fans and followers

GoSmithsonian Trek

When you think about cutting-edge fun, the Smithsonian Institution might not be top of mind. But in June 2010, America’s premier museum kicked off a high-stakes scavenger hunt called The GoSmithsonian Trek, which allows visitors to compete to solve puzzles based on clues hidden throughout the Washington, D.C., complex. One question in the hunt, which is active through July 24, asks: “What animals were kept in pens behind the castle?” The winner on opening day received a $500 iPad, with two more to be given away to top scorers at the end of this month. The challenge was built using SCVNGR, a location-based game that can be customized by almost any business and played through free apps on the iPhone and Android.

Jimmy Choo Trainer Hunt

While brands like Bravo and Starbucks have leveraged Foursquare on a national scale, high-end fashion house Jimmy Choo went local in the spring of 2010 when representatives took a $600 pair of sneakers around London. The reps would post Twitter hints, Facebook updates and Foursquare check-ins, giving fans a brief amount of time to show up and claim the trainers at a city venue. After a month of playing hard to get with more than 4,000 online participants, the trainers were found and claimed. Jimmy Choo reported its own reward: a 33 percent increase in sneaker sales.

Red Bull Scavenger Hunt

In late 2009, Red Bull hid 9,000 cases of its new Energy Shots across the country, then posted hints to help more than 1 million Facebook fans track down the caffeinated caches. Everyone from college students to white-collar professionals scrambled to find the hidden drinks. Fans of the beverage weren’t the only winners of the effort. Red Bull’s social media presence got its own burst of energy. Within weeks, the Red Bull page had shot up to 1.5 million fans. Within six months of the stunt, the fan count had surpassed 4 million.

David Griner is a social media strategist for marketing agency Luckie & Company and a contributing editor to Adweek’s daily blog, AdFreak.com.