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.