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Saatchi S Perspective: Rajat Paharia, Founder - Bunchball

Saatchi S Perspective: Rajat Paharia, Founder - Bunchball

So, what does gamification really mean? Bunchball's Founder and Chief Product Officer Rajat Paharia tackles this question and discusses the implications of how the two main definitions impact the types of games that are created for businesses and brands. Rajat certainly knows what he's talking about and you will enjoy his insight in this edition of Saatchi S Perspective.

Rajat Paharia: Bunchball is a company that does gamification. Game designers have known for years how to incent and motivate player behavior. They do it by using things like points, levels, virtual goods, high score tables and badges. All these things that they’ve used over the years to motivate and incent players, can now be taken outside of the gaming world and used anywhere where there are people to incent and motivate them. Let me first start by just defining gamification, because there's really two different definitions that people use.

There’s one that we use, which is you have a core piece of content or an experience or a program or something through which you’re integrating game mechanics, like the points levels leader boards in order to drive participation, engagement and loyalty around that content. The second one, you often hear people talking about the word gamification is to create a new game. The game’s whole purpose is to be a carrier for some other message, whether it’s an advert game to be a carrier for a brand or whether it’s a serious game and you’re trying to teach somebody something.

The whole idea is you’re actually creating a brand new game, you’re injecting the content message in as opposed to the content message being the center and putting game mechanics around it. We play in this area. In this other area, this advert gaming, series gaming area, that’s hard. Making good games is hard as like 10,000 failed game studios will tell you and why most serious games suck, which is why I wouldn't advise people to go with that angle. Making a good game is not easy. Otherwise everybody would do it.

The gamification stuff where your core content is at the center, there’s a lot of opportunity there. The opportunity is, on the one hand understanding very clearly your key business goals and objectives. Let me give you an example. We recently were talking to a music label about artists sites like Adam Lambert or you name it and Pink. On the one hand you got the label and the artists who have certain business goals they want driven. They want more viral sharing, they want people to download the tracks, they want people to proclaim their love for Pink or Adam Lambert or whoever. All these kinds of things.

Then the other person in the equation is the fan. You got to understand what drives and motivates the fan. At the end of the day it’s all about what’s in it for them. It doesn’t have to be a dollar thing that’s in it for them. That’s actually the easiest carrot thing that so many people use, but it’s not always the right thing or the most powerful or meaningful. What drives the music fan? Well, if you’re a really big fan of an artist, there’s a whole bunch of things that drive you.

You want exclusive insider access. You want to know about what that artist is doing before everybody else. You want access to exclusive content like mp3s and ringtones or whatever that you are the one to find, because you want to be the taste maker, the one that tells all your friends about the cool new stuff. You want to be a collector. You want to own everything that that musician has ever made. You want to be part of something bigger than yourself. There’s a reason wear the shirts in broadcast. It’s like you’re part of the club. It’s almost defining as much as what clubs you’re in as what you’re not.

All these things you know about a music fan, you take that, you take the business goals, then the job is to build something in between that satisfies both. How do you satisfy the business needs while at the same time satisfying the user’s interest and identity drivers? Using this palette of game mechanics and whatever other tools you have at your disposal. In this case, one example might be, let people earn a currency by doing something that you want them to do as the business, then take that to unlock an exclusive Pink track that nobody else can have, then share it to Facebook, Twitter and MySpace.

They become the taste maker. They’re the ones who did the work to unlock that special piece of content, they get to share with all their friends, they get the pride of having done that. Really it's this piece in the middle that’s the really interesting part. If you look at somebody going through your website, a consumer just going through your website could be telling you, "Look, I downloaded your white paper. I watched the video about your product. I did five other things that indicate that I’m really interested in something that you’re doing. Are you paying any attention to that? Is that just getting lost in your server log somewhere or your google analytics, because that’ll aggregate information about everything everybody is doing?"

You’ve got one individual person who is raising their hand just by a byproduct of what they’re doing on your site and you’re not responding to that in real-time. Why not? Why aren’t you responding and giving them an offer, giving them more information, having somebody contacting them, rewarding them for doing something, telling them, "Hey, I’ll reward you even more if you spread the word via Facebook and Twitter, because I know you’re into this." All those things you can do. Once you start listening to individual people and the things they’re telling you just by virtue of their actions.

One good example would be Warner Brothers insider rewards. Warner Brothers had never had a direct relationship with their customers before. It had always been through big box retailers and through movie theater chains. But they wanted to establish their own loyalty program. These guys went out, they did a big RFP. They talked to all the big loyalty players in this space. They ended up picking my company to power their loyalty program. The reason they did that was because they were very forward-thinking in realizing that loyalty isn’t just a function of how many dollars somebody spent with you. In their case, it’s a function of people visiting the various movie sites, watching trailers, playing games, sharing to the social network.

There’s all this other activity that brings them value that they weren’t tracking and they weren’t capturing. If you wanted to go do a traditional loyalty vendor, they could easily give you a points for purchase program, but they couldn’t track and reward all that online activity.

That’s what they built using us. They have a two-tier system on points, which is pretty traditional loyalty, buy DVDs, get more DVDs, then credits, which is tracking all that online engagement and rewarding people for doing so, rewarding them with Warner Brothers promotional digital content, mp3s, wallpapers, ringtones from Harry Potter and Inception. Things that people want because they’re interested in the brand and the content, but then they don’t really cost Warner Brothers much of anything.

They’re tracking and rewarding all this online engagement. This has so many benefits. Number one, they’re now able to reward online activity and viral sharing to the social networks. Two, they’re now able to cross-promote people between their properties. You’re at the Harry Potter site and they say, "Look, we’ll you an extra 200 points if you go watch the Where the Wild Things Are trailer." They can now push people between their properties. The third one is, they’re now able to correlate offline purchase data and online activity data, because you got the DVD with the insert in it that has a code, you take it to the website and put it in.

Now they know you bought the Dark Knight DVD. They know you played The Inception Game, because they’re tracking it. They know you watched the Harry Potter trailer. They now know a lot about you. You’ve raised your hand and said, "I’m interested in this kind of content." They can now market to you with absolute specificity.

We have statistics from a bunch of our customers about both online and offline data. One example is USA network. They built a loyalty program around a TV show called Club Psych. These guys have seen 100% increase in page views and time on site. They’ve seen an increase in viewership of the TV show, just by driving people. The strategy in media companies to date has always been throw up content and hope people consume it. Now that they’re directly influencing and getting people to do it, they’re able to drive meaningful, not only online results, but also offline, on-air results.

Other customers like HopeLab. HopeLab is a non-profit in Redwood City that’s trying to combat twin obesity. What they’ve done is they built and activity monitor called the Zamzee [clears throat] that kids plug on to their belts and they run around all day. At the end of the day, they come, they plug it in to the USB drive and it uploads all their activity data. For every minute that they spent in a certain activity zone, they earn points. They can then take those points and redeem for virtual goods to customize an avatar or bling to take out their profile page or even Amazon or Target gift cards or donations to charity. They’ve been able to show a 30% increase in activity amongst these twins. Really meaningful results.

There’s the famous quote that I always miss-attribute or I don’t know who to attribute it to, but the 50% of my advertising spent is being wasted. I just don’t know which 50%. If you were an engineer, that’s not how you would approach marketing. I think you would think about it a lot more about what are the behaviors that my customers or end-users are doing that matter to me, how can I track those behaviors, then how can I incent more of those behaviors. You take a very analytical approach to it. I’m an engineer by training, by temperament.

That’s the approach that we took. As we said, "You know what? There are high value things that people can do. If you can track those behaviors and you can assign a score to those behaviors and you can use that score and other game mechanics to incent those behaviors, then all of a sudden you’re looking at influencing behavior in a very different way. It’s not about who can create the most funny or clever creative. It’s about listening to your users, your customers, because they’re talking to you through their actions, listening to that and responding in real-time with incentives to get them to do more of those things. That’s what we think is the science of engagement.

We’re all driven by these needs and desires for reward, status, achievement, competition, self-expression, altruism, that you look at most websites, applications, programs today. How do they address or leverage those fundamental human needs? For the most part they’re not. They’re completely ignoring them. But game designers clearly know how to do this. They do this by using things like points, levels and virtual goods et cetera.

One interesting lens through which to look at this is social gaming. The social games like the FarmVilles and the CityVilles of the world, they use these mechanics incredibly well. There are over 100 million people playing these games right now. The reason they’re playing is not always because the games are the best games, it’s because it's satisfying those emotional needs they have, those fundamental needs for a sense of reward, a sense of progress, a sense of achievement. This strikes some people as controversial. I don’t think it really is. You look at the target market for a lot of those games, it’s 43-year-old housewives.

I would submit that these are people that aren’t in their everyday lives getting a lot of sense of achievement, progress, status and all these things. They’re not getting it all. They’re so hungry for it, they’ll take it wherever they get it. They’re getting it right now from social games. But if your business can take those and integrate it into your core message, into your content into your product, then there's a huge opportunity to take those mechanics and use them to drive engagement with your brand or your movement or your product.

I've been thinking a lot recently about how this market is evolved. You can tell me if you think I'm full of baloney, but it seems like there's this giant explosion in the internet space of say MySpace, social explodes, then with the next year or two everybody wants social on their websites. Then a couple of years after that, everybody wants social on their companies.

You've got Salesforce chatter, Yammer, CubeTree, SuccessFactors and guys like that. It takes something blowing up into the mainstream to have it then trickle down to a consumer oriented sites, then into the companies.

Video, mobile, all these things have explosion then they work their way down. The same thing is happening with game mechanics. FarmVille and social games in Foursquare exploded it into the mainstream. Now it's making its way into consumer oriented stuff which is where a lot of our customers are. The whole next stage is going to be into the companies. How do you motivate and incent employees? How do you do sales incentive programs? How do you do employee recognition? How do you do employee health and wellness? There is so much opportunity in that space that that's where it's going to go next.