Does the Video Game Industry Hold the Keys to the Future of Advertising?

Engage consumers via brain chemistry

There’s an argument that the escalated prices of spots in last week's Super Bowl is nothing more than proof of its ever-declining value—the last gasp of traditional advertising. Year in and out, the big networks continue to lose viewers to other platforms and channels. As the tide of audience rolls out into the digital ocean, the Super Bowl stands out by contrast: a lonely tower of viewers, wobbling in the breeze.

But the future of advertising lays not in the big game—or attempting to re-create its success—but in a million tiny ones being fought every day on the front lines of digital commerce and the video game industry.

In 2009, Apple began allowing developers to make monetary transactions with gamers from within the games, not just an initial purchase. In-App-Purchase (IAP) bears all the hallmarks of a paradigm shift. Not only does it radically alter the market (games that would cost fifty bucks on a console are now free), but it births a whole new philosophy of engaging consumers that works at a brain chemistry level. Call it the dopamine economy.

Game designers talk about a "compulsion loop." Every action within an experience is designed to make you want to do it again. When we feel pleasure, a molecular shower of a substance called dopamine is released in our brains. Sex, nicotine and gambling all stimulate dopamine production. What game designers have figured out is how to directly connect that to commerce. Win or lose, the player is continually micro-rewarded, creating a tiny shower of dopamine molecules. And the best designers know exactly when to start turning those rewards off and create compelling techniques for getting you to spend money to get it back.

Pay close attention to the most successful IAP games and you’ll notice that all the commerce systems have a similarity. They all use a virtual or imaginary currency like Gold Coins or Credits. These coins are used in the game to buy new weapons or vehicles. Why don’t you just buy your new gleaming suit of armor or racing tires directly with your credit card? Because the more layers of abstraction between our money and the purchase, the more freely we spend. Money out of your pocket inhibits dopamine. But play money out of a wizard's chest lets the dopamine flow.

Game designers recognize that money is not the core currency of e-commerce. Money changing hands is a side effect or symptom of the true market. Their game is played at a molecular level. 

And viewed as dopamine economies, the new channels of digital communication start to make a lot more sense. Treat Facebook as a giant game of in-brain rewards and its compulsive nature is revealed. Posting a picture of my cat earns me a dribble of dopamine because, well, looking at cats is always a pleasure. But then here come the “likes” from my friends and it’s a cocaine-buzz level dopamine rain shower.

Soon the “likes” peter out and a second cat picture gets less attention. How do I get that dopamine back? I could improve the quality of my cat picture—perhaps put the aforementioned cat in an amusing hat? I could lower the frequency of my posts, as everybody knows that scarcity is value. I could begin “liking” some friends’ cat pictures in a quid pro quo exchange. Or I could just get more friends.

Is that starting to sound a lot like your brands’ social media strategy? No surprise. The quest for dopamine makes even the most innocent cat fancier behave like a marketer.

What digital is doing for the industry is the same as what IAP did for games. Game designers used to work to create a onetime sale just like traditional advertising does; watch the ad and then go buy. Now game designers know that they extract tremendously higher value by having an ongoing relationship with the customer. Micro rewards, micro transactions. A multitude of small events replace the big one. And at the end of the day it makes the games better.

Advertisers need to shift their focus from product to brand. Not one big push to go buy the product, but a multitude of micro-interactions with the brand. And, who knows, maybe a dopamine economy applied to advertising will make the ads better.

The brands that will win in the digital space will be the ones who know how to manufacture not just cars and beer and detergent. They will also know how to tap the chemistry in the heads of their customers and do it daily and relentlessly—not just once a year for 30 seconds during the Super Bowl.

The next generation of marketing innovation belongs, not to those who bring their advertising to the game, but to those who know how to bring the game to their advertising.

Steve Hicks is a digital brand consultant and was the creative co-founder of mcgarrybowen's digital practice.