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Is gamification a growing trend or just another buzzword?

It's been around for a while, but gamification is slowly moving from a niche audience to the mainstream. Big brands are investigating it, industry publications are adding it to their next-big-thing predictions, and gamification start-ups are attracting millions of dollars in investments.

Gamification is a complicated word for a simple concept: using a system of competitions and rewards to reach a business goal, solve a problem or engage an audience.

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The first big name in the field was Foursquare, the location-based social network that offers incentives in the form of points, badges or mayorships to users when they check in to their favourite places. Locations supporting Foursquare check-ins can then reward their most frequent visitors with discounts, free products or non-monetary perks, such as having a product named after them.

Foursquare has more than 15 million users – including Barack Obama – who have checked in more than 1.5 billion times. Others are jumping into the space as well. Facebook's check-in competitor didn't quite take off, but just this week Google quietly introduced its Latitude Leaderboard to encourage a similar type of competition among Google+ friends.

It's not all about check-ins and badges though. Gamification is evolving to fit different needs, from marketing to solving real social and business problems with creative new rewards and recognition systems.

Britain's Department for Work and Pensions used gamification in its Idea Street program to crowdsource ideas for improving the department's service and the working lives and communities of its 120,000 employees. Ideas can be voted on by all members and the collective knowledge of the group offers suggestions for optimization and strategies for implementation.

It sounds like a large suggestion box, which in essence it is. But Idea Street's gamification elements – including points, leader boards and a buzz index – has caused participation to skyrocket.

Environmental advocacy group Recyclebank is using a gamification model to encourage people to live greener lives. Recyclebank offers points that can be redeemed for discounts and free products to its three million members for recycling, using less energy and decreasing water consumption.

The marketing potential for these types of models is being investigated by consumer brands, which are expected to join existing gamification models or create their own with increasing frequency as we move further into 2012.

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A basic application would be to offer a product or service as a reward for participation. The feel-good vibe attached to a group such as Recyclebank, combined with its large user base, offers marketers an exciting opportunity to showcase an environmentally conscious product and get it into the hands of potential consumers.

Gamification's key trait for marketers is that is encourages engagement at very high levels. Brands traditionally spend large percentages of their marketing budgets to acquire users, but they often don't have a real plan to keep them interested.

The issue has become even more crucial in the social-media era, where brands have built audiences consisting of millions of Facebook fans and Twitter followers, but they struggle to encourage interaction outside customer-service issues and complaints. Brands including Warner Bros. and Dell have already jumped on the bandwagon with some success.

The system has to be easy to adopt, have mechanisms to limit cheating, and have incentives that are attractive to potential users. Different models have already shown that if you reach hundreds or thousands of participants and only one is being recognized, the rest will eventually lose interest.

Special to The Globe and Mail

Mia Pearson is the co-founder of North Strategic . She has more than two decades of experience in creating and growing communications agencies, and her experience spans many sectors, including financial, technology, consumer and lifestyle.

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