Physical Meets Virtual – Marketing to a whole new generation…

My family and I just returned from a little vacation in Wisconsin. The weather wasn’t very good so we didn’t get to spend much time outdoors. Still, we made the most of it, spending some time shopping in town.

My wife can attest to the fact that I am not much of a shopper. However, even I enjoyed walking through the little shops that lined the streets of the small town near the cottage where we stayed.

The shops we browsed offered all kinds of interesting crafts, art, trinkets, antiques, etc. To the joy of my daughters we even found a little basement sale that sold used Barbie dolls with a seemingly endless supply of used Barbie clothes and accessories. Even with all of the fun opportunities that were presented to my kids to purchase toys and trinkets, I must admit, I was surprised to hear that what they really wanted to look for were Webkinz. "You already have Webkinz," I mentioned, "Are you sure you want to spend your money on more of the same?" My query was met with a firm and confident "Yes".

Oh..and we found them…several of the stores in town had them…and my girls each bought one. As it turns out…we weren’t the only people looking for them either. The next day, when it rained again, the girls wanted us to have lunch at a Panera Bread so they could log in to http://www.webkinz.com/ to activate their new "pets" online.

Who came up with these things and how did they make otherwise unremarkable soft-toys so desirable to kids?

Well…for those who don’t know…

Webkinz are small, plush-toy animals created by the privately held, Canadian company, Ganz. They retail from between $9.50 and $12.50.

Each Webkinz toy comes with a little tag that has a secret code on it. When the code is entered at http://www.webkinz.com/ the little creature comes to life in vast virtual world complete with games, activities, a room to decorate, furnishings to be purchased, a virtual Webkinz clinic, virtual food, virtual recipes, virtual stores, a virtual Webkinz monetary system and opportunities to interact and play games, on a limited basis, with other Webkinz "pet" owners around the world.

With regard to marketing power…Carleen Hawn summarized their business model in a recent story posted on http://money.cnn.com/.

"It’s a model that can be enormously seductive. Ganz reports that toy buyers have snapped up more than 2 million Webkinz pets since April 2005 and better than 1 million users have registered online. More than $20 million in retail sales in less than 24 months is considered pretty good money in the plush-toy business. Ganz is privately held and won’t disclose its profit, but to put that growth rate in perspective, it took Second Life three years to attract the first 1 million "residents" to its virtual universe."

With all the craze that Webkinz are causing, Hawn goes on to write that they serve only a portion of a "29 million member demographic with $40 billion in purchasing power."

Webkinz is joined by other innovators in this industry…However, the only one that currently comes close to them in marketing to the 6-14 year old is http://www.clubpenquin.com/.

Recently acquired by Disney, Clubpenquin offers free membership like Webkinz. However, kids can ask Mom and Dad to purchase a membership for around $58 a year. This allows them to do more on the site.

So…What’s the Point???

All in all…whether we believe that these kinds of websites are good for children around the world, one thing seems to be clear. Kids are spending an average of 2 hours a day in these virtual play grounds. They already see the world through the eyes of technology. It has become a central expression of their generation. The only way to stop it is to block our kids from the Internet. Today, if you block access to the Internet, you block access to the world. I personally believe that while 2 hours a day on a site like Webkinz may seem excessive, in moderation these sites are just fine for kids.

You might say that I am reading quite a bit into a toy. I believe that these "toys" only scratch the surface on what could be accomplished through social technology for education, spiritual formation, social and ethnic reconciliation and who knows what else…good, bad and ugly. The point is this…what marketers have latched onto to is powerful and even dangerous. Think about it…a company like Ganz has taken a stuffed toy, that probably cost them a few dollars to make, sell it for $10 and manufacture an experience, "on-line" without actually manufacturing anything. My nine year old, who saves up for these things and receives them as gifts has 9 Webkins. And that’s nothing compared to many of her friends at school. What’s funny about it all is that, unlike Beanie Babies, or other "physical" soft-toys, what she really wants is the little code that comes with it that allows her to add another "pet" to her online experience.

At the risk of being dramatic, I would even add that this market is almost as profound as the one that bottled flavored carbonated water. The only difference is that this new world of interactive online content doesn’t rot your teeth; it can actually influence the way you think. Once the Webkinz craze fades you can bet that our kids will still be online. I can only hope that churches, schools and other organizations that care about kids will see this and offer a positive influence with opportunities for fun and learning.

Source Links…

For more reading in Webkinz and other Virtual/Social technologies offered to kids, I recommend the following links.

• Article by Carleen Hawn Summarizes Webkinz and other virtual experiences for children.
  http://money.cnn.com/magazines/business2/business2_archive/2007/04/01/8403359/index.htm 

• CBS Early Show highlighting webkinz posted on YouTube, 4/6/2007.
  

• Wikipedia entry for Club Penguin
  http://en.wikipedia.org/wiki/Club_Penguin
  
• Another very good article highlighting Disney’s recent acquisition of Clubpenquin.
  http://www.mediabuyerplanner.com/2007/08/06/club-penguin-snatched-by-disney-grew-329-percent-in-past-year/
  
• Yet one more link to Clubpenquin Article highlighting the Disney Acquisition.
  http://www.techmeme.com/070801/p94#a070801p94
  
• A marketingcharts.com posting highlighting selected virtual world websites, U.S. Markets Share of Visits as of June, 2007.
  http://www.marketingcharts.com/wp-content/uploads/2007/08/hitwise-club-penguin-share-virtual-world-visits.jpg