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If you've heard the term 'gamification' flying around recently and have wondered what it's all about, fear not - you're not alone. This buzzword du jour has been cropping up in reference to anything from mobile marketing to employee engagement. There is not yet a formal definition, or even a consensus on pronunciation, but most people with an interest in the topic seem to agree that gamification denotes the use of game mechanics in non-gaming environments, with the aim of increasing engagement and loyalty.

Or, as one PR man puts it: It's gaming, with a point. This broad definition has led to the blanket application of the term to a wide variety of scenarios, and the subsequent impression that it is the next big thing. But, as so often is the case, the concept is hardly new.

Arguably, something as straightforward as a points system or loyalty card scheme falls under the umbrella of gamification. The creation of a competitive environment to engage consumers and offer them a form of thanks or reward for their custom is a tried and trusted technique for encouraging repeat business, whether it's entering them into a prize draw or offering them a discount if they buy before a designated time.

'In schools you used to get gold stars - in some way, that's gamification,' says Jeff Coghlan, founder of advergaming wizards Matmi, who have created branded games for clients from Asda to United Airlines. 'It's about taking things that could be really mundane and making them more exciting.'

The latest iteration of such schemes comes courtesy of the smartphone revolution, with applications such as Foursquare, Gowalla and Facebook Places enabling brands to create virtual points, badges and rewards for users who connect with them in real time.

Meanwhile, the recent increase in appeal of gaming itself has prompted some fruitful partnerships. Last year, McDonald's teamed up with FarmVille, dubbed the 'fastest growing social game ever', to promote the re-release of the global food chain's version of Monopoly. Virtual farmers could enhance their farms with McDonald's hot air balloons and McCafé products.

The success of game mechanics feeds off the fact that human beings strive for progress and have a desire for achievable goals; they like to compare what they have with what their contemporaries have, and they also like to receive feedback on their progress. But, as Coghlan concedes, such psychological traits are not news to anyone. So why all the recent buzz around the idea of 'gamification'? And does it deserve the hype?

A new generation of consumers

One argument is that an increase in use of game mechanics is due to the knock on effect of a new generation of consumers who can no longer remember life before the Internet. As the expectation for everything to be available at one's fingertips increases - and attention spans decrease - it becomes more difficult for organisations to cut through the noise and stand out in a virtual world. Loyalty is arguably harder to come by, while reputations can be damaged by one negative review going viral. Organisations which have implemented game mechanics, whether by offering rewards, or drawing customers deeper into their website by leading them through a variety of challenges and offers, can see more prolonged engagement and better brand awareness.

Coghlan believes that the social networking revolution that has been the game changer (no pun intended). 'The reason something like FarmVille works is because of all the rewards and achievements and notifications,' he says. 'You can help each other out, work together... you can brag about your achievements on your wall. Without all that it would be a threeminute throwaway game. 'Social mechanics are allowing people to share their achievements. Without everyone being connected socially, how would I know what you're achieving? You can see what others are doing, what they've owned - it's all about one-upmanship.'

Another clue as to the success of game mechanics is the increasingly sophisticated range of data available and, more importantly, the speed at which it can be gathered and analysed. Leading mobile marketing technology and solutions provider Upstream has been implementing gaming mechanics in its interactions with customers since its launch ten years ago. The concept remains the same today. However, what has changed is how quickly the metrics can influence the next interaction, and therefore the strategy as a whole.

Guy Krief, vice president of innovation at Upstream, says: 'We've been using gamification since the very beginning. Initially there was some level of trial and error... but now we're in a position to capture and interpret the consumer's responses in real time. You can see what's working and what is more enjoyable for the customers.'

Profiling the customer

Upstream's client Telecom Italia is one of the largest mobile operators in Europe with 25 million subscribers. A recent campaign targeted at smartphone users was designed to encourage them to sign up to a new Internet package. 'The initial basic rule was that with every megabyte you download, you get points,' explains Krief. A series of challenges then enabled the customer to increase their data consumption, for example, by 100 megabytes per month. 'If we're giving you an incentive to consume a few extra megabytes, we also need to give you a reason to do so,' points out Krief. It is an important point: it is not enough to offer freebies. Crucially, it is about developing the relationship and understanding the needs of the customer. Otherwise those who were happy with their current deal might never see the need to increase it.

So Telecom Italia also offered its customers the opportunity to double their points in return for the provision of information within a certain time frame. Customers may start by being asked about their interests, but each question is more tailored than the last. This is the profiling element of the gaming mechanics - learning about the player.

More nuanced knowledge about the customer enabled Telecom Italia to tailor their rewards appropriately. For example, it offered a free short term subscription to a football alerts service for those who answered questions about football. Such an initiative may later lead to the customer choosing to pay for the service, but it could also lead to a need for additional megabytes of data, thereby increasing the customer's original subscription. The combination and sequence of each element of the game mechanics - from the type of reward, to the type of question, to the time frame involved - leads to hundreds of different game configurations.

'We learn from every interaction,' explains Krief. 'Our system becomes better and better the longer we run the campaign. The results are exponential.' Real time profiling during the three-month campaign led to 30 per cent more information from participating customers, while asking people to answer questions on the spot increased the response rate by 50 per cent. In addition, the real time adjustment to tailor the game sequence to the individual customer led to a 100 per cent increase in engagement.

When it comes to gamification, its advocates are keen to emphasise the importance of it being a twoway relationship. 'If it was only about the brands communicating their values it wouldn't work,' says Krief. 'It is about creating awareness for the brand... but it is also about making it enjoyable for the user, learning about what they want. It is a two-way process.'

'It's about encouraging the customer, getting them to come back,' says Matmi's Coghlan. 'It's about creating an emotional connection with them, getting them to spend time with the brand, finding out why they want to connect with the brand.'

The comms pitch

Moving in a different direction, it is clear that the same strategy that drives people to engage with brands could be mobilised to engage employees within the workplace. Online monitoring, insight and analytics provider Onalytica works with its clients to help them benchmark the success of their communications teams' endeavours. Clients such as Microsoft, which use Onalytica's dashboard to see the buzz and sentiment around their brand, can now benefit from seeing how they are faring compared to other offices in the region. Flemming Madsen, founder and chairman of Onalytica, explains that once clients were already using their monitoring dashboards, it seemed like an obvious step to introduce statistics showing them their position against the average.

In business terms, this may appear old school - think 'Salesman of the Month' awards. 'In sales, you've had this for years and years, because the numbers are available all the time,' explains Madsen. 'But in marketing and communications, it's been harder to get the numbers until now.' Where communications teams used to survey the sentiment around their brand once every few months, their dashboards can now update information every couple of hours. Tracking the individual achievements of communications professionals and teams can help them improve their performance.

In this framework, gamification could be considered synonymous with benchmarking. 'If you can see that you are above average for your region, you want to stay there,' explains Madsen. 'You want to use initiatives to move up, but you only used to have this information once a year.

'Now every time you have a team meeting, it becomes a competition. You're competing against others in your region. It raises the bar. Everybody is trying to improve their scores. It's not any different to how it's always been in marcomms, they've always tried to do this. But now that they have the data on a more consistent basis, they can make more data-driven decisions.'

And the good news for communications teams is that it allows for trialling projects on a smaller scale and then immediately benchmarking the results against the regional average. It can also help with securing that all important buy-in at a senior level. 'If there is one thing that senior managers like, they like data,' adds Madsen. 'And they like to place their bets on smaller risks, smaller projects.'

Microsoft, for example, has regional 'evangelists' which go out into the local community, demonstrating new products and services, talking to local developers. Onalytica's data helps them immediately understand how they doing in their region and compared to the national average.

But it is not just technology companies that can benefit. Madsen points out that supermarkets or even an organisation like the NHS need to be able to see which regions are performing better, and provide an incentive to improve against the average. It also enables companies to reward subsidiaries accordingly.

The basics still apply

But communicators need not worry that it will all become about analysing data. 'It's still about being very good at writing and communicating; that's always going to be paramount,' says Madsen. 'But what you can do with the data we provide... we'd like to think that we can help raise the platform of effects from where the skill and the art of communication start.' The same is true for brands thinking of dipping their toes into the gamification pool to engage with customers. No matter how many challenges, rewards and incentives you implement, the basics of knowing your audience still apply. 'In Italy, most customers still go out and buy top-up cards for their mobile phones,' says Upstream's Krief. 'We know there's no point in running any challenges on a Sunday. All the shops are closed.'

So, it becomes necessary to approach the term gamification with an open mind. The word itself is arguably technical jargon, applied retrospectively to a concept which has been around longer than anyone can remember, feeding off psychological traits which have always existed in human beings. But there is no denying that technological developments, the proliferation of social networking, and the increasing availability of metrics will ensure that the hype around this buzzword continues.

'It is going to be the next big thing,' proclaims Matmi's Coghlan. 'Some of the biggest names in advertising have been knocking on our door, wanting to discuss how they can get on board with gamification.'

The concept may be nothing new, but it is certainly being implemented in new and exciting ways. Watch this space. Or perhaps CorpComms Magazine could create a game to make you return...