Philadelphia Ad Agency Goes Virtual

By SuperSpy 

Red Tettmer, the Philadelphia-based advertising agency, has just launched a virtual world for tweens called ScapeNation. Ugh. Their timing may just be bad. Virtual worlds targeted at tweens are expected to have a rocky 2009. Barry Gilbert, vp, research director, Strategy Analytics, recently said that he doesn’t see it as a sustainable market. From Adweek: “2008 virtual worlds collectively pulled in $1.2 billion in revenue globally, with roughly 10 percent of those dollars – $125 million or so – coming from advertising (Gilbert’s data focuses exclusively on social worlds, excluding massive multiplayer games like World of Warcraft). He predicts that in ’09, ad spending will decline to around $100 million and won’t bounce back until 2011.”

Targeted to tweens ages 7-14, Red Tettmer’s ScapeNation offers: games to play and mysteries wrapped around the story of an evil villain called Darkness that threatens to destroy ScapeNation forever. The marketing campaign features characters from the world of ScapeNation pleading, “Darkness is upon us, you are our only hope,” and asks Tweens to join the fight to save the world from total destruction.

Steve Red, president and CCO of Red Tettemer said, “The idea is, kids won’t just play the game they’ll become invested in the story. And that’ll keep them coming back for more. It’ll allow us to build an entertainment franchise rather than just the next SVN.”

ScapeNation will be monetized through micro-transactions, a model which allows children to play free, but offers accessories and exclusive access through the purchase of items. However, these are children. While adults may continue to spend on their virtual world identities, children don’t have the same economic choice.

The recession is what makes up the rough road that ScapeNation will face. Gilbert also said something we all know from experience: “Advertisers are pulling back budgets, and they don’t want to go with anything that isn’t proven.” Plus, the problem with tween virtual worlds moving forward is consolidation as the leaders in the space like Club Penguin or WebKinz pull further ahead, stragglers like Doppleganger, need to make some tough decisions – fold or merge. Capital funding for projects has melted away. If a virtual network gets in trouble now, who will they turn to? Plus, the long term problem of retaining “active” users over those who sign up only to bail, remains.

Props to Red Tettemer for taking the plunge. They’ve got a browser based service and a compelling story line. Let’s hope the recession doesn’t totally ruin a good thing.
If you’re going to be at SXSW, do check out the panel about virtual worlds and the recession.

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