May 07, 2004
Ads in Online Environments
WSJ article on New approach to product placement in Habbo Hotel.
Advertisers, Teens
Hang Out Online
At the Habbo Hotel
By ERIN WHITE
Staff Reporter of THE WALL STREET JOURNAL
May 7, 2004
LONDON -- When teen magazine CosmoGirl wanted to attract readers in the Netherlands, it checked into the Habbo Hotel, a European teenage chat and games Web site.
The venue, which bills itself as a virtual "teenager playground," looks like an online videogame. Teens log on, create their own characters, chat with other users and play games. By maneuvering their virtual selves, teens can visit different rooms, including ones they can decorate with furniture they select from Habbo's site.
In February, CosmoGirl set up a room of its own. The result: "Club CosmoGirl," which is designed to look like an American hamburger joint. Inside, a billboard displays the CosmoGirl logo, which, if clicked, takes visitors to the magazine's Web site. CosmoGirl, which is published in the Netherlands through a joint venture between Hearst Corp. of the U.S. and Dutch publisher De Telegraaf Tijdschriften Group, says 9% to 10% of virtual visitors click on the link, a comparatively high rate among Web sites. That has helped to build readership in the Netherlands, where it had its debut last year, in an increasingly competitive teen-magazine market.
It is all part of advertisers' efforts to target people in ever more precise and subtle ways. Advertisers are particularly eager to blend into teenagers' lives in a way that doesn't strike savvy teens as too overt. Habbo says it turns down ads it deems uncool or inappropriate, and takes steps such as prohibiting pop-up ads to make sure its advertising isn't annoying or overly intrusive.
Habbo's roots lie in advertising. A few years back, Jussi Nurmio, chairman of Finnish advertising-agency concern Taivas Group, which is 33%-owned by British ad giant WPP Group PLC, noticed some young techies had created a surprisingly popular fan site for a local rock band. Seeing potential, Taivas backed the creation of Sulake Labs Ltd., a Finnish game-development company of which Taivas owns one-third, to launch the Habbo Hotel as a new youth site. (Mr. Nurmio remains the chairman of Taivas and is the chairman of Sulake.)
Since launching the first Habbo site in 2000, the sites have attracted big-name marketers such as Procter & Gamble Co. So far, Habbo has sites in nine countries, including the United Kingdom, Germany and Japan, and plans to debut in an additional 11 by the end of the year.
Habbo makes money by getting users to pay a small amount to purchase furniture and to play some games, as well as from advertising revenue.
"All of the big brands have to find new ways to reach this teenage audience," says Timo Soininen, the chief executive of Sulake. Ad messages to teens work better, he says, "if you can create an environment which is their own and then find clever ways of addressing them."
That was the thinking at Konami Europe, a unit of game-maker Konami Corp., when it used Habbo Hotel to promote a dance videogame for Sony Corp.'s PlayStation 2 in the U.K. last year. Konami ran a traditional ad campaign for "Dancing Stage MegaMix" on TV and in magazines, but also wanted something that helped create word-of-mouth for the game.
So Konami set up a venue inside Habbo Hotel: a "Saturday Night Fever"-style glowing dance floor where users could send their characters to dance contests. Konami placed billboards and posters on streets and buildings inside the Habbo site; Konami also announced the competitions in an e-mail newsletter to Habbo users.
"We didn't want it rammed down people's throats," says Steve Merrett, a Konami spokesman. "If an online community like that is enthused by something, they take that enthusiasm and tell their friends."
Write to Erin White at erin.white@wsj.com1
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