Pokemon Go: Where to Go From Here?

Pokémon Go burst into the scene in July and quickly exploded in popularity. But as we all know, peak popularity in the world of mobile apps is fleeting at best - and can quickly dissipate in a few months, or even weeks.

In fact, data from the week of August 22 shows that Pokemon Go is already losing the battle for mobile mindshare, with critical metrics including daily active users, engagement and time spent in the app, all on the decline since their approximate July 21 peak. As the frenzy around Pokémon Go naturally dies down, Nintendo and Niantic need to focus on sustaining the game's momentum.  Here are some suggestions:

Consider Rewarded Videos as a Form of Paid Advertising

According to eMarketer, 46 percent of gamers prefer rewarded videos to other types of ads in free to play games. Rewarded videos – whereby a user is incentivized to click on and watch a video ad, in exchange for points, coins or other tokens that help them advance through the game – resonate very well with game players in general. These could be a strong way for Pokemon Go to supplement in-app purchases.

Think of it this way – while in-app purchases in Pokémon Go continue to be the “touchdown” in terms of helping users move through the game, rewarded videos can provide the “extra point.” Rewarded videos have been shown to improve gaming app monetization by double-digit percentages.  In contrast to banners and interstitials, gaming users rarely complain about video ads in app store reviews, rather viewing them as an additive, helpful part of the game.

Leverage User Data

Pokemon Go needs to take advantage of their true golden pot – the new wealth of user data, including location, user email addresses and previously visited websites.  

Several weeks ago, Pokémon Go’s developer, Niantic, made headlines when they hinted at plans to adopt a “sponsored location” revenue model. In this model, companies – namely retailers – would be featured in games, and Pokémon Go would receive compensation on a per-visit basis – e.g., each time a Pokémon Go user set foot in a physical store featured in the game. This approach may be useful, but it is limited because businesses don’t necessarily guarantee that store visitors will be interested in buying products. Rather, they may only be interested in catching Pokemon!

These businesses would benefit much more by encouraging visits from strategically targeted, engaged shoppers who actually may be inclined, or have intent, to buy. This is precisely where Nintendo and Niantic have a huge opportunity to make a lot of money – either by starting an ad network themselves, or selling this wealth data to advertisers and/or ad networks. This would allow these external parties to conduct targeted, hyper-local advertising with Pokemon Go users – not necessarily while they’re playing the game itself, but as they gravitate from the game to other mobile apps and mobile browsers on their phones.

Capitalize on the Vast Marketing Opportunities Presented by Augmented Reality

In contrast to virtual reality (VR) techniques, which virtually “transport” users to different locations, augmented reality (AR) takes a user’s physical presence and adds something to it. Pepsi Max’s recent “Live For Now” prank, whereby they “changed” a bus shelter wall into a fake window, is a great example of AR. From a marketing perspective, AR is often considered more valuable and effective than VR, since it does not always require a geeky new wearable.

While native advertisements have not traditionally been widespread in gaming, Pokémon Go should consider implementing it and combining these native ads with AR technologies that enable ads to be “swapped in” in real-time, based on users’ locations. The technology that enables this type of “ad transposing” may be the same type that has been used by companies like face swapping app MSQRD (recently purchased by Facebook).

In Pokémon Go, interactive, natively designed billboards or “direction signs” could be displayed within the game, featuring ads that change based on users’ physical locations. Combining native ads – which deliver highly effective, “camouflaged” marketing messages – with real-time geotargeting, presents a potent one-two punch that ultimately could help drive significant revenue streams for Pokémon Go.

In summary, many consider Pokemon Go to be a successful foray for Nintendo into the mobile gaming space. But assuming Nintendo has high revenue goals for Pokemon Go (a free game, one might add), they can’t afford rest on their laurels. As Nintendo launches more mobile games in the weeks ahead, they must keep their eye on Pokemon Go, applying innovative techniques to sustain and continually build the app’s revenue-generating potential.