Pokémon GO as an Advertising Platform
The Case for Locative Advertising in Location-based Games
August 11, 2024,
Abstract
Traditional location-based advertising (LBA), such as billboards and signage, has long been a staple of direct-to-consumer advertising. In recent years, however, the prominence and popularity of location-based games have made digital LBA even more appealing. This article draws on an original research project devised to explore a notable gap in the literature on locative media: the impacts of LBA on small businesses in the location-based game Pokémon GO. The project was conducted between August and October 2021, employing semi-structured interviews with 35 businesses leveraging Niantic’s sponsored location LBA. Our findings indicate that (1) participant businesses found location-based game advertising to be rewarding, (2) LGA can act as an amenity offered by the business, and (3) local community is an essential factor for success in location-based game advertising. In sum, this research demonstrates that local businesses could successfully utilize LGBs like Pokémon GO to advertise themselves.
1 Introduction
In late 2019, Niantic announced their ”sponsored location” program, which enabled businesses to advertise in Location-based Games, particularly Pokémon GO (Niantic’s flagship title) [42]. While this sponsorship is not the first instance of advertising in location-based games, it nonetheless represents one of the first examples of small businesses gaining access to this kind of service. Significantly, Niantic extended free membership to this program to 1,000 businesses [41], effectively exposing several small businesses to location-based game advertising (LGA) for the first time. This advertising model leverages the hybrid nature of location-based games, enhancing the physical location of the business with either a stop or gym (points of interest (POI) in Pokémon GO).
The promise of LGA presents an advertising modality in which the consumer, in being served these advertisements, directly benefits from the advert in their ludic activity. As these adverts are PoI in the game world, they allow players to update their image of the city [37]. This process instills a sense of brand awareness and provides a more concrete understanding of the business’s location. Furthermore, as this advertising model leverages PoI in location-based games, which frequently deliver in-game rewards to players, this might also engender positive associations with the businesses in player perceptions [56].
The present research article represents the conclusion of the late-breaking work contributed by Dunham et al. during the 2022 CHI session [14]. The article contributes to our understanding of locative advertising by describing 35 small business owners participating in Niantic’s sponsored location program during 2021. We completed interviews with these businesses between August and October of 2021. The following research questions drive our research.
(RQ1) | How do business owners perceive LGA? | ||||
(RQ2) | What are the perceived critical factors in advertising success and failure in LGA? | ||||
(RQ3) | What are the pain points associated with LGA? |
As a result of these questions, our research highlights three key findings: (1) participant businesses found LGA to be rewarding, improving brand recognizability for local commerce; (2) LGA can act as an amenity offered by the business; and (3) businesses perceive local community as an essential factor for success in LGA. Furthermore, we outline initial best practices for integrating LGA into future location-based games.
2 Background
First, this section introduces non-location-based game locative media, which pioneered several themes explored in this research. Second, we provide a brief overview of socialization in location-based games (namely Pokémon GO) to contextualize assertions about local communities in Pokémon GO. Finally, this section concludes with a critical consideration of location-based advertising (LBA).
2.1 Locative Media
As noted in the introductory section, location-based games represent the overlaying of digital information onto physical locations, frequently implemented as mobile apps [5]. In general, this digital projection onto concrete space can be considered locative media, or media where the user’s physical location impacts the presented information. These projections can enhance the imageability [37]—a measure of a user’s mental image—of the city as they recontextualize the space occupied by users [45]. Pokémon GO is one of the more popular location-based games at the time of writing, earning over $1 billion US in 2020 alone [10], and the probe leveraged in this study. A litany of locative apps exists that paved the way for Pokémon GO to emerge. For example, Foursquare [29] is a seminal location-based social network (LBSN) from 2009 that enabled users to ”check in” at physical locations and, therefore, share this information with other befriended users [47].
For our purposes, Foursquare is a progenitor of many concepts that form the heart of modern locative media, particularly territoriality. Foursquare users could check in at locations with the capacity of becoming the ”mayor,” effectively the digital owner, of the place if they had visited it the most in 60 days [31]. In other words, Foursquare leveraged locative technology to create a social network wherein users could claim digital ownership over physical locations [31, 47]. Interestingly, investigating user experience of this platform indicated that check-ins were largely performative, with players presenting an alternate digital self through the mechanisms, as noted by Lindqvist et al. [31] in a study of Foursquare. Papangelis et al. [45] support the notion of a disjunct digital self in a follow-up study through a separate locative media probe. The notion of users’ performative self is crucial, as it indicates that users of locative media mediate their presentation of self when engaging with it [47]. User mediation of the digital self parallels Goffman’s dramaturgical lens of human behavior, wherein the individual has a public and private persona [20]. Returning to locative media, a performative digital self suggests that the norms of the local community impact how app users interact with PoI.
A decade later, Foursquare no longer has the mayor mechanic; however, the performative phenomenon continues in other applications with location-aware mechanics such as Yelp [51], Twitter [11], and Facebook [61]. One such expression of this phenomenon is also present in local businesses that engage in locative social media, as noted in Humphreys et al.’s study of small business owners in New York City and Melbourne [24]. Here, Humphreys et al. highlight that social media platforms enable businesses to control how information about their location is disbursed to potential customers [24]. These results have important implications for locative media’s ability to mediate perceptions of entities and, importantly, the value of locative media in heightening brand awareness through PoI. Mechanistically, this advertising is how the business mediates its presentation on the platform.
2.2 Socialization in Location-based Games
Researchers have extensively studied the nature of socialization in Pokémon GO and its impact on the game. Prior work has shown local communities to exhibit strong communication and social interaction between players of the game [13, 16, 36]. Territoriality claims over space frequently mediate social interactions in this context, manifesting in playful antagonism between players and resulting in the sense of ownership of physical space through the digital self [45, 46, 49]. Equally—and, of course, before the COVID-19 pandemic—contextual dynamics [1] between players often resulted in a great deal of in-person interaction [6] during in-game events such as community days and raiding [48]. Community days are social events in Pokémon GO where pokémon spawn more frequently, encouraging players to go out and play the game (in pre-pandemic contexts) [40]. Raiding is a communal activity wherein multiple players come together to challenge enemies in-game that must be defeated with the help of other players [40].
These community dynamics and player tendencies for territoriality are vital to Niantic’s objective of making PoI a means of advertising. Small and medium businesses have recently been given access to LGA through Niantic’s “sponsored location” program [42]. In the program, a small or medium business—five or fewer storefronts [41]—can register its location in Pokémon GO as an in-game PoI for a nominal fee. This so-called sponsored location allows the business to create and modify its presence in Pokémon GO, sponsor in-game events (disabled at the time of inquiry due to COVID-19), and start in-game promotions. For $1 US a day, the business is given a pokéstop (the lower tier of PoI), and at $2 US, the PoI becomes a gym; both levels provide the business with analytics about their location. Business owners can control their digital presence directly through Niantic’s program, allowing them to brand their location as they see fit in the context of location-based games.
2.3 Advertising in Games
Before exploring advertising in location-based games, it is crucial first to explore extant research conducted within the context of more traditional gaming. Of course, advertising in video games is a phenomenon that has been around for a while. Advergames have existed since 1983, with the arcade version of Tapper [19] and the home console game Kool-Aid Man [34]. Also known as custom branded games [25], advergames are long-form advertisements that integrate a business brand with ludic engagement as either a free promotional game (Chex Quest [8]) or a paid product (Pepsiman [27]). As seen in Lee et al. [30], when coupled with brand interactivity (e.g., consumer interaction with mascots, slogans, and brand images), advergames have positive impacts on brand attitude and higher purchase intentions in users. Recent work by Zhao and Renard [59] also indicates that playfulness (engagement in ludic activity for one’s own sake) in viral promotion advergames correlates positively with intending to share the games with other possible consumers. Advergames, therefore, represent a valuable tool for marketing a brand and improving brand associations for the players [50, 55].
The Interactive Advertising Bureau’s (IAB) Game Committee notes two additional forms of advertising in the space of video games: in-game ads and around-game ads [25]. A banner advertisement or pop-up on a website hosting a game or game skinning is considered around game ads by the IAB, as the advertisement doesn’t directly impact the ludic experience [25]. Around-game ads differ significantly from advergames in which the core advertisement is critical to the ludic play experience.
In-game ads represent a middle ground between these two forms of advertising. Static in-game billboards are traditionally the most representative of this flavor of game advertising [25]. Martí-Parreño et al. [33] studied the impact of this variety of advertising in racing games where the researcher could leverage diegetic billboard advertising, finding it had positive outcomes for brand recall and recognition in familiar and unfamiliar brands alike. Notably, however, familiar brands tended to require fewer repetitions in-game than those players who lacked familiarity. Work conducted by Palmas et al. [44] indicates that observers of gameplay featuring static in-game ads have better brand recall than their peers who played the same game. Palmas et al. suggest that the players having worse brand recall is an artifact of low gameplay skill, necessitating more engagement in the gameplay, distracting from the advertising. Furthermore, this work [44] indicates that interactive contact with the advertisement fosters better brand recall, reinforcing work conducted about advergames [30].
A third in-game advertisement model, value-exchange, offers players in-game rewards in exchange for interacting with advertisements [25]. Value-exchange advertisements have seen increasing popularity in the mobile gaming market. It can be considered an expression of prior findings in the study of game advertising (Palmas et al. [44]; Lee et al. [30]). Google best practices claim that this advertising model is surprisingly popular, alleging that 50% of users would be disappointed if value-exchange ads were removed based on an internal Google study [21]. An economic analysis by Guo et al. [22] reinforces the lucrative nature of value-exchange ads, provided reward revenue exceeds the customer’s nuisance cost.
Before including small and medium businesses, the value-exchange model was employed in Pokémon GO. Businesses such as Starbucks and McDonald’s reached deals with Niantic, creating PoI that offered rewards at franchise locations with the appropriate branding in the photo disk (a part of the visual representation of a PoI in-game) and PoI description [52, 54]. These PoI represent the core location in-game for players to acquire the necessary resources. Niantic also offers an advertising model wherein brands can sponsor geolocated gifts for players in-game, which provide resources after, connecting the brand directly to the reward [43].
2.4 Location-based Advertising
Shortly after launching the sponsored location program, and in light of the COVID-19 pandemic, Niantic also launched the “Local Business Recovery Initiative” [41], which allowed communities to nominate small businesses for inclusion in the sponsored location program for a year free. Thus, the sponsored location program tethers to the community, establishing community engagement as a vital component of this advertising. Further still, observations show that small businesses already have a high degree of enmeshment in their local communities, particularly in the context of social media [53]. Indeed, small businesses can engage in the community meaningfully to engender brand awareness, sentiment, and purchase [28]. Community engagement may be as simple as responding to posts or making posts on Facebook [61] pages for the business or brand [26, 28]. We can consider these interactions through Goffman’s dramaturgical lens of human behavior (i.e., separation of public and private personas) [20], as entrepreneurs attempt to embody a public persona for their business. While nominally distinct from the individual’s identity, this embodiment of identity represents the business owner attempting to engender customers to accept the business and themselves [28].
Locative media augments LBA of old (e.g., billboards and signage), allowing advertisements to address the consumer directly through direct marketing based on location in real time [4]. For example, billboards, a ubiquitous form of classic LBA, offer direct marketing in static, public locations. Due to their static nature, billboards not only are expensive but also only market to a subsection of the business’s potential customer base. In locative media augmented LBA, a digital billboard can be leveraged to serve the advertisement to potential customers in a geographic region for lower costs [3]. Work conducted by Xu et al. [58] indicates that mobile, multimedia, and LBA leads to more favorable consumer responses than traditional advertising. Further, the distinction arises from a perception of increased value in mobile LBA, as the information is generally more relevant to the consumer. Gebreselassie [18] highlights a caveat to preferences regarding digital advertising; in less developed countries, more traditional non-digital techniques, like billboards, are still the most popular modality.
Following this, a perception of value leads to better advertising outcomes, as noted in Wang and Sun [56]. Mobile LBA with location-aware services has promise and value to businesses in the general case. Despite how long advertising has been incorporated into location-based ludic experiences (e.g., Angry Birds [15, 23] and Ingress [38, 39]), there is a limited investigation of marketing potential in location-based games. Wu and Stillwell [57] conducted a survey (N = 352) of Pokémon GO players, finding that spatial presence positively influenced user attitudes toward and intention to visit sponsored locations. Frith [17] approached the subject matter from the perspective of the businesses themselves, noting that businesses with in-game POI tended to see higher foot traffic. Moreover, the studied businesses engaged with the community through the purchase of in-game items called ”lures” that summoned Pokémon to the POI. In addition to Pokémon, these ”lures” lured players to their location, increasing foot traffic.
While advertising through location-based games such as Pokémon GO is a familiar frontier, there still exists a considerable gap in the literature on this subject, and one we address with this research. This article, therefore, seeks to reduce the knowledge gap of LBA through location-based game impacts, achieved through a set of qualitative interviews with small business owners enrolled in the Niantic sponsored location program. In the following section, we will outline this research’s methodological approach.
3 Methodology
We conducted semi-structured interviews with participants of Niantic’s sponsored location program. The first author acquired participants with the collaboration of Niantic’s operations department. Collaboration with Niantic allowed the first author access to a list of users who expressed interest in participating in future studies. Furthermore, we acquired access to the documentation provided to users at the start of their participation in the program, giving context to user education in Section 5 of this work. Three factors determined interview eligibility: (1) the business participated in the sponsored location program within the last year, (2) the business self-identified as a small to medium business, and (3) the business had previously consented to participate in studies of the program’s efficacy with Niantic. We offered participants no additional incentives for participating in interviews.
In total, we invited 166 businesses to participate in these interviews. Sixty-three businesses consented to participate in the study; however, only 36 completed their interviews during May 2022. Of the 27 businesses that failed to complete their interviews, one dropped out, deciding the discussion would be pointless, citing low interaction with their PoI. In another case, language barriers prevented the completion of the interview. The remaining businesses in this category did not attend their scheduled interview time. Finally, we discarded one of the 36 completed interviews as the content diverged too far from the study’s stated goals.
Demographically, our participants came from four countries: the United States (19/35), Canada (11/35), Mexico (4/35), and the United Kingdom (1/35). The average number of employees ranges from 2 (typically run by couples or partners) to 100 (a local entertainment center), with the median number of employees being 6. Although the largest businesses, in terms of payroll, were found in the United States, the surveyed Canadian businesses were more likely to have an employee count greater than 10. Five of the 11 observed Canadian businesses have more than 10 employees, compared to U.S. business rates of 4 to 19. Neither Mexico nor the United Kingdom had any businesses with an employee count of more than 10.
We enabled registration for the interview through the usage of the external online calendar tool Calendly [9]. The participants scheduled the date and time of the interviews. When registering, the calendar tool asked participants for names, email addresses, and business names. The registration also presented the informed consent document to be approved by the participant or flagged the interview for a deeper discussion of the participant’s rights before conducting the discussion. We gave all participants a pseudonym to ensure anonymity (see Appendix A).
Interviews began with a summary of the informed consent document outlining the rights of participants concerning the interview. All participants assented to being recorded through Zoom [60], with each interview taking approximately 30 to 45 minutes to complete. Structurally, the interviews were centered on three core categories: (1) demographic information surrounding the business, (2) reasons for joining the program and broad outcomes, and (3) direct questions about the features afforded to sponsored locations. Collaboration between the authors of this article and Niantic’s operations team generated a set of 20 questions rooted in these three core categorizations (see Appendix B). We also included clarifying questions to improve the fidelity of participant responses. More precisely, we designed questions and possible follow-ups as clarifying questions. For example, “Do you find the sponsored location valuable to your business operation?” was followed up with “What would you be willing to pay for this service?” The wording of these questions was deliberately open to allow the interviewer to modify the language to match the conversation flow to elicit contextual information surrounding the participant’s response. As interviews progressed, these clarifying questions were subject to alteration to accommodate unexpected information from the participants.
Immediately following the interviews, the authors also had brief discussions about the interview content and the relevance of these points to the underpinning exigency of the project. Following the completion of interviews, the first and second authors of this article conducted independent inductive thematic analysis [2, 7] of five randomly selected interviews (using the Ubuntu RANDOM construct). We conducted inductive analysis iteratively, coding participant interviews directly from interview quotes. These codes—typically related to common trends or stand-out experiences (e.g., issues with a feature’s usability or how the participants used promotions)—were further refined into broad themes independently by the coding researchers. Furthermore, we leveraged an iterative process of generating codes and reviewing previously generated codes to refine the preliminary thematic framework suggested by the coders. After generating preliminary codes and themes, the authors then developed a thematic framework through consensus. Procedurally, each author presented their initial coding and theming to other authors, recording codes, core themes, and quotes on a physical whiteboard. The authors then debated the value of the generated codes and themes, addressing potential biases in the coding processes and encouraging reflexivity in the remaining analysis [35]. The first author then used the resulting thematic framework—described below—to assess the remaining 30 interviews [2].
The core themes identified through this process include (1) local community impacts, (2) business enrichment through Pokémon GO, (3) pain points in running a location, (4) business type and engagement model, and (5) participant satisfaction with LGA. Furthermore, the authors of this work synthesized these themes to generate design recommendations for LGA going forward. The following section will anonymize participants using alphanumeric identifiers. The first character, B, represents the participant’s status as a business. Each business is then assigned a two-digit number between 01 and 35 arbitrarily. Table 1 presents each assigned identifier with demographic information for the associated participant.
4 Findings
In terms of the types of businesses questioned, we’ve separated them into five categories for analysis: friendly local game store (FLGS) (10/35), entertainment venues (6/35), retail (6/35), restaurants (9/35), and professional services (4/35). FLGSs are locations where customers purchase products and engage in ludic activities, such as playing trading card games (TCGs), board games, or wargaming. These locations have a high degree of brand integration with Pokémon GO, and nearly every business of this classification (9/10) considered the sponsored location program, as explicitly noted by B12, “a kind of cross-promotion.” Entertainment venues ranged from bowling alleys to museums, while professional services included health, tax, and miscellaneous services. Retail venues were similarly diverse, although characterized by a low product integration with the Pokémon franchise in this study. Restaurants were both sit-down and take-out, selling a wide variety of foods.
4.1 Business Enrichment through Pokémon GO
Three participants began to treat Pokémon GO as an amenity they offered upon joining the sponsored location program. In short, Pokémon GO was a new service they could offer their customers. The perception of Pokémon GO as an amenity was especially apparent for FLGSs, with one store comparing a Pokémon GO gym (B05) to having ”free wifi or having beverages … available in the shop.” In other words, some businesses understood this digital overlay as providing customers with a feature that made frequenting this establishment desirable. LGA transcended mere advertisement; instead, it added value to the entire business model.
Some of the businesses (11/35) aligned with this sentiment were generally more tightly entangled with the Pokémon franchise in that they sold products or ran events that directly interfaced with the brand. Brand integration typically manifests in the sale of the Pokémon TCG and the operation of tournaments in our participants. Businesses that leveraged LGA in this manner near unilaterally (10/11) expected customers to remain at the location for extended periods. The stops/gyms in these instances would serve as an activity to keep the customers rooted to the location between rounds, which could be enhanced by scrupulous owners who augmented nearby stops using in-game lures (as players cannot lure gyms).
For example, one FLGS owner (B05) described having a store phone to facilitate this behavior and further augment the customer experience.
We also have a store phone that has an official [store name] account on it that we can use whenever a guest comes in and says they’re looking to trade … [or] they need to complete [another task in game], … we can facilitate that using that phone.
In having a store phone, the business makes explicit the active role the business is taking in the Pokémon GO game experience. As a result, this process recontextualizes that space to be one of ludic engagement with Pokémon GO, allowing for stationary play of the location-based games.
Examples of this level of integration were rare; however, many participants (9/35) repeated a familiar refrain: COVID-19 made running events unappealing. While some locations used their new gym or pokéstop to draw players during in-game events (12/35), in-person events were frequently taboo. In addition to the more altruistic rationales questioning the morality of running in-person events, others were more practical. Local ordinances forbade gatherings and carried harsh penalties for locations deemed responsible for localized outbreaks. As one FLGS noted (B12):
There’s no in-store gathering right now [as] we don’t have the staff or the inclination with the delta variant to have 50 people in our location. If we become a super spreader, they shut us down for three months.
Such a shutdown could be the death knell for many of the studied businesses, which operated, in some cases, on thin margins. When a business considered Pokémon GO as an amenity, a strong relationship with the community was essential for perceptions of the program’s success. However, local Pokémon GO culture directly impacted the efficacy of community outreach, as we explain.
4.2 The Influence of Local Culture
Areas with low foot traffic host a number of the surveyed businesses (9/35) where car culture was more common, meaning customers were more likely to arrive by car. Frequently, these businesses described being in more secluded spaces or locations on highways. Car play involves players using cars to move between points of interest, as observed by our participants (despite warnings from the Pokémon GO app). Locations requiring a car to reach them aren’t ideal places to engage in the play of location-based games. However, of the nine participants describing their location as getting more car traffic, six surprisingly reported foot traffic increases. B21 offered player curiosity as one potential explanation for this disconnect:
I know for me and other players, if you see a new gym, you just say, “Oh, let’s just walk by it!” That brings people in, and [they] check you out. I think it’s very helpful [to] business owners.
B10, on the other hand, highlighted the proximity of their location to local play communities:
[Our region] is spread out, it’s not like a city, so [the Gym] made it more centralized … [rather than] going 10 or 15 minutes up the road to the municipal building, or a new town. So me putting the gym there, I think, kind of helped some people that don’t want to drive that far.
This explanation appears to be more tied to rural locations than urban ones in which there’s a greater average distance between POI. However, the most striking rationale for the increase came from B06, who described a local community that practiced ”small business local support … [by being] more engaged in their local areas.” B06, however, also appeared to be more active in reaching out to the location-based game community:
We could see customers who are playing Pokémon GO, we start talking to them, … [then] they bring a friend … from out of town [for] community day. We’ve been known as the place to come [to play Pokémon GO].
B06’s success indicates that business engagement with the location-based game community begets engagement from the community. Moreover, some participants (12/35) wanted to facilitate these engagement conversations by leveraging physical promotions such as window clings. As B11 notes: ”We use that poster, and then people know … even if they’re just playing Pokémon GO if they want to escape the elements [they can] come in and play, that they have a place.”
The three remaining cases appear to be more tied to the behaviors of the local players. These local players, according to B33, were more focused on raiding and considered the sponsored gym as just another stop on routes that are more or less optimized to maximize gains from raiding:
I’m just assuming that the Pokémon GO folks are just the … diehard [ones] that are driving around … to get the benefit of the special raid and then move on [saying,] “I don’t need to go into the game store and buy a Pokémon pack … I’m not into that.”
The disconnect between players using the stop and patronizing the location hints at the local Pokémon GO community having some bearing on the program’s efficacy.
4.2.1 Perceptions of Success.
Overall, 20 of 35 of the surveyed businesses reported increases in their foot traffic. Business owners reporting this increase generally appeared to believe that the program was doing something to draw attention to their store. Most business owners who saw foot traffic increases gave explanations similar to B21’s. Twenty-six participants believed that the sponsored location served as a means of brand awareness, with 15 reporting increased foot traffic. Participants perceived the location in-game as a digital billboard. Bookstore B23 joined the program for this reason:
[We joined to] get some neighborhood recognition, so people realize, ”oh there’s a bookstore over here.” People that play Pokémon GO might not notice us because we are kind of in an out-of-the-way location.
B23 also reported that this perception was effective for their business:
[We got] a different clientele to notice us and stop in, [or] at least pull into the parking lot [to] do the gym or a raid … [Some of] these people came into the store to look around.
FLGS B04 mirrors B23’s sentiment:
Many people have come [to the store], and they tell me that they [found] us because they [saw] the stop of the business and in the small description it says we’re a hobby store.
These two stores operate on separate engagement models. The bookstore expects more transitory interactions, and the FLGS expects sustained customer interactions, suggesting a business-agnostic quality—vis-a-vis how they interact with customers—for the value of the locations as billboards.
Despite apparent merit in the program for brand awareness and increases in foot traffic, some participants (8/35) who reported increases in foot traffic also appeared to be unsure of the program’s efficacy. This lack of certainty was a broader trend, with 19 businesses reporting uncertainty about the actual efficacy of the program. This uncertainty appears to be related to the local community not communicating Pokémon GO as a factor in patronizing the business. A lack of interaction over the game with businesses is likely rooted in communal norms, as noted by B13: ”Players are really trained, not to bug the businesses there’s a gym attached to, … I think the entire community is trained, not to disrupt.” Niantic offers some tools to counteract this attribute of local communities, but only some participants in our sample used them.
4.3 Operating a Location
Niantic gave participant businesses access to an administrative interface that afforded them basic control over how their location was presented in-game: location photo, description, and analytics. Users were informed of this program in the initial start-up email for setting up their digital location. Despite the tools’ existence and introduction in the startup email, many participants (17/35) reported being utterly unfamiliar with the interface. B16 offers the most common explanation for this knowledge gap: ”I got the initial email about how to set it up, … but I’ve kind of forgotten, and I haven’t been asked about it until now.” B16 suggested reminder emails to business owners when asked for a potential solution.
4.3.1 Sponsored Location Analytics.
Seventeen participants reported a lack of awareness of the tools, and 11 also reported uncertainty about the efficacy of the location for advertising. However, only one of these businesses reported a lack of access to analytics as a source of uncertainty. Instead, low interaction from the community was the more common pain point. The usage of the analytics assuages low certainty in the sponsored locations. However, the participants without tool awareness declined to speculate on the potential efficacy of analytics to assuage uncertainty.
Overall, participants didn’t report using the analytics frequently, with only 12 claiming to have used them when they had their location. Moreover, those aware of the interface didn’t always view it as a solution for determining advertising success (4/35). For B07, the analytics were too general to be meaningful:
It doesn’t give me enough information to really make an informed decision on changing anything. The analytics are fairly basic; it’s mostly just gameplay, so it doesn’t really tell me about the demographic.
The lack of specificity was a common critique of the resource, although several participants (2/35) acknowledged potential privacy issues in addressing this concern. COVID-19 also impacted the effectiveness of the analytics in participants’ eyes due to increased interaction distances and changes in the administration interface’s features.
Participants generally considered the analytics as a novelty. However, unlike most businesses, two (2/35) participants reported using analytics for business decisions. FLGS B04 used analytics as a tool for discussing business plans with stakeholders: “The analytics are always a good tool to see how we are doing [and if] we are freezing (sic) in the numbers, we can discuss what we can do.” Similarly, B31, a restaurant, used analytics to decide the day to run a promotion. “We used data from the analytics to set up a promotion on Wednesday … [because] Wednesday has the most traffic or the most users of the application.” However, existing knowledge of the game and Wednesday Raid Hours may have impacted B31’s experience with the analytics.
4.3.2 Sponsored Location Promotions.
In addition to the analytics, participants could leverage the admin interface to launch promotions. Niantic support staff must approve promotions before going live in the game. Seven participants directly leveraged this feature, and one of those had just started their promotion at the time of the interview. The businesses leveraging this utility frequently linked promotions to store events or customers’ life events (e.g., back to school). B11, for example, coordinated promotions with “anytime [they] had a new big product coming out … [and used] it as an advertising tool, [but] we haven’t offered discounts.” Interestingly, B11’s not offering a discount represented a motif in the participant reports, as businesses were already operating on slim margins.
These promotions weren’t always successful, with three reported as having no positive outcomes. Interestingly, there was no common trend among these failed promotions. B30 only had one person take advantage of the promotion, speculating, “[maybe] the promotion is not attractive enough. There’s not a lot of benefit from the sponsored promotion.” B24 thought the promotion system was “suspended for a while during COVID,” blaming the system rather than their promotion. However, the most interesting reason for “failure” was reported by B15, who thought “a lot of people didn’t take [the promotion] up because they wanted to support us.” Once again, we must recognize the value of the local community of players in locative advertising.
B20 modified its location’s description to advertise a quarterly—free—collectible pin to drive customers to the store, which resulted in the business “getting 7 to 12 people in the first week” arriving to claim the promotion. In the eyes of this business, using the location as a promotional tool did drive customers to their store. Participants also leveraged social media in conjunction with the stop, using the stop as more of a lure to potential customers. This technique was more in line with traditional advertising modalities and was generally successful.
4.3.3 The Sponsored Location Learning Curve.
While participants leveraged the Niantic offered tools, they described a reduction in usage over time. The limitations of the features participants could use on their location reduced their tool usage. One participant (B03) pointed explicitly to the fact they “can’t actually schedule any events right now with the restrictions due to COVID-19.” They lamented an inability to sponsor raids, the premier event in Pokémon GO.
In general, however, most participants (19/35) did not manage their virtual location through the supplied tool. For some (8/35), this was due to their frantic schedules. B26 considered learning the tool “at the bottom of [its] list with a bunch of other things that [they] haven’t finished.” To participants in this category, their existing responsibilities outweighed the perceived value of using the tool to manage their location directly. In the case of the remaining participants, the reasons for low usage patterns ranged from insufficient technical expertise to forgetting the tool existed. Generally, participant responses point to the tool needing to be easier to use for the value it gave. However, the difficulties of using the management tool were surprisingly not coupled with whether the participants were satisfied with the program or whether they had not recommended it.
4.4 Satisfaction: It’s Not Just Business
Nearly every participant (32/35) indicated that they had been playing the game before joining the sponsor program, which factored into their desire to join it. These participants also frequently expressed explicit dedication to the game. Members of B23’s business “are all addicted to Pokémon GO,” motivating the business to join the program. As noted above, dedication to the game was only one of the driving factors for this business to join the program (see Section 4.2). Existing domain expertise with the franchise and Pokémon GO is the most vital driver.
In some cases, the participant was even a leader in their local Pokémon GO community. The owner of entertainment venue B28 was “a community leader. When [anybody] had questions, [they were] one of the guys they came to.” Before joining the program, their business had already been a PoI in the game, and it was already a minor focal point for play in the community. Joining the program converted their stop to a gym, which allowed for new types of play at the location, particularly raiding: “Many people would come in, hang out, and do the raids at the [business].” B28 expressed overwhelming positivity about the program, focusing on its ability to drive foot traffic and highlighting its appeal for entertainment venues with sustained customer interaction models. However, there needs to be more certainty about the actual income afforded by the program.
Participants (6/35) also reported a sensation that having a managed in-game location made them feel accepted by not only Pokémon GO but also the broader Pokémon franchise. To some, such as B04, joining the program “[gave] some prestige to [their] business.” B31 felt they were accepted and were “joining a big thing” in Pokémon GO. This sensation results in the participants feeling as though Pokémon GO or the Pokémon franchise tacitly approves of their business in accepting them as a location in the game. Businesses that expressed this sentiment were unilaterally satisfied with the program.
Yet, participants who played the game didn’t necessarily express gratification with the program overall. Of the six participants expressing a negative experience, a common refrain was again the ambiguity of the analytics, as summarized by B08:
The biggest thing for us is it’s just hard to tell a tangible result from [the program]. So [if] we could figure out how to do that, I think it would be a more beneficial service.
Similarly, participants were frustrated with the program’s reduced services, particularly the ability to launch events at their location, with B24 highlighting their frustration as being “due to the COVID suspension.”
Similarly, mixed reception to the program (9/35) focused on the gaps in the feature set and was generally optimistic, focusing on the potential over the current features. B03 expressed a tentative optimism that they could use the program to offset slow days: “If I made it so that every week on Saturday,” the business’s slow day, “we could schedule an event to get people into the store, then that might actually turn into income for us.” Other participants cited the pandemic as a mediating factor in their neutrality to the program. These participants expressed fears about running events and engaging in outreach, with some businesses, such as B11, planning events for the future: “Once the pandemic goes away, we might start offering a discount just to see how many people are actually using it.” Neutrality was also a trend among businesses with low integration with their location who were in the program for their gratification. In these cases, because participation centers on personal gameplay, the cost to sponsor the location would be prohibitive, as B16 notes: “It’s more of a personal investment, I would pay more than … the average <business> shop. [Targeted online ads] don’t tend to go over more than ten, fifteen dollars a month.”
4.4.1 The Cost of Doing Business.
Positive satisfaction with the program (20/35) highlighted foot traffic and a feeling of acceptance, as noted above. Satisfaction, however, doesn’t seem to be necessarily linked to perceptions of cost for the program. Despite the high positive satisfaction rate, only nine participants believed the program was worth the current price (Niantic suspended payments at the time of the interview). Those businesses that found the price reasonable were generally entertainment venues (6/35), which viewed the expense as easily recoupable given their business model. B28 elaborates on this point:
It’s foot traffic; it’s people coming to the business. … Whether they come in and buy a soda for 1 dollar or they go in and spend 50 dollars on whatever the products that your business might offer. Even if ten people walk by, … and you only get one to come in your store, and you make 50 dollars off of one person, that’s still 50 dollars more than you would have ever made if [the PoI] wasn’t there.
The remaining three businesses found the cost of the advertising to be within their budgets.
However, not all participants accepted the standing pricing model; razor-thin margins, the aforementioned disabled features, and unclear returns contributed to the general resistance to the current pricing model ($1 US a day for a stop, $2 for a gym). A large number of participants (16/35) found the current pricing to be too high for their business. B22 elucidates: “60 [US] dollars a month is a lot of money for us, so I think that I obviously have to discuss [that with my partner].” Local currency compounds this problem, as was highlighted in our interviews with Canadian and Mexican participants. Local costs are on different scales based on location in the United States, and much less in other countries. B13, a Canadian business, explicitly called this discrepancy out in their interview: “[I’d pay] probably about twenty dollars a month, and that’s Canadian. I think your price in US Dollars is a lot.”
The remaining participants (10/35) sat on the border between acceptable and unacceptable pricing. These participants had conditions for their support of the pricing, as in the case of B19, who is reserving judgment until they have better analytics: “Two dollars a day could be worthwhile, but I don’t know until I’m able to measure out the analytics to say this is worth it.” B10 was waiting for the reinstatement of an in-game feature to draw conclusions:
I understand that it is a gym and it’s an ex-raid gym, but the ex-raid passes aren’t live right now. I’m assuming that [will] be pretty valuable once they’re back.
In these cases, participants looked to the potential of the sponsored location rather than judging on its current COVID-19 suppressed form. B10’s interview also highlights a general trend of belief (9/35) among the participants that gyms were generally more valuable than their stop counterparts, focusing on the ability to raid afforded by gyms.
4.4.2 Would They Recommend It?.
Finally, tangible results, pricing, or program satisfaction affected the likelihood of recommending the program to other businesses. An overwhelming majority of participants (29/35) would recommend or had recommended the program to other small and medium businesses. Some recommendations naturally aligned with the participants’ experiences. Indeed, all participants who reported a positive experience (20/35) with the program recommended it, citing their experiences as a motivating factor. The remaining nine participants willing to recommend the program had mixed feelings about their experience (8/35) or were generally unsatisfied (1/35). In the case of the participant who reported low satisfaction, they had previously introduced the program to other business community members before recognizing their dissatisfaction. The remaining participants recommended the program conditionally relating to business type, highlighting businesses like “gaming cafes” (B09) or a “gaming house” (B14). For the remaining six, participants cited the cost of the 555 program, geographic issues, and concerns over features.
5 Discussion
5.1 Research Question 1: Business Perceptions
Our participants generally found LGA to have a positive impact on fostering awareness of their respective brands. Although this increase wasn’t unilateral, most businesses studied (26/35) considered the sponsored location program a good shepherd for brand awareness. PoI advertisement acts as a digital billboard to the players, highlighting businesses savvy enough to appeal to them through their ludic experience.
Using a PoI in Pokémon GO for LGA forces players to interact with it no less than two times to receive a reward in the form of in-game resources. An increase in awareness aligns with the findings of Palmas et al. [44], who note that interaction with advertising has a positive effect on brand awareness. These PoI advertisements also leverage the value exchange model of interaction described by the IAB’s Game Committee, Google, and Guo et al. [21, 22,