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Some might think interactive marketing is strictly business, but there's growing support for an Internet-based promotional tactic that's all fun and games.

Alternate Reality Gaming is charming some very prominent advertisers -- and engaging on-line audiences in the process. Play-along stories that incorporate various mediums and blur the line between fiction and reality, alternate reality games (ARGs) are being used primarily by companies catering to younger, tech-savvy demographics.

"It answers the question of how traditional advertising doesn't work with Generation Y," says Stephen Berkov, director of marketing with Audi of America. These consumers, Mr. Berkov adds, may use traditional media as well as the Internet, but they don't like to be told what to do.

So, when the auto maker needed to promote its all-new A3 hatchback in North America earlier this year, it launched an elaborate ARG designed to immerse consumers in the model and brand. Over the course of three months, The Art of the Heist followed the fictional theft of an A3 from the New York Auto Show. On-line ads invited consumers to help solve the mystery, which came complete with heroes and villains portrayed by actors who interacted with audiences via blogs and at real-life U.S. events. The game concluded in June with a webcast in which the thief was finally revealed.

"This campaign really brought in our target audience," says Mr. Berkov. "Traditional advertising tends to tell people what to think. This is about letting them discover a world on their own."

Marketers have been creating alternative reality campaigns since 2001, when a game called The Beast (promoting the Steven Spielberg film A.I.) pioneered the genre.

"But things really didn't take hold until the Halo 2 game I Love Bees last year," says Steve Peters, lead editor with the Alternate Reality Gaming Network (ARGN), a site dedicated to ARGs.

Mr. Peters is referring to the ARG developed by Microsoft Game Studios to create excitement for the sequel to the popular Xbox video game Halo. Inspired by H.G. Wells' sci-fi novel The War of the Worlds, I Love Bees began last summer when groups such as the ARGN received honey pots featuring the enigmatic phrase "I Love Bees," and the URL appeared briefly in the film's cinematic trailers.

Once at the site, players were asked to unravel the mystery of an artificial intelligence that had taken over a fictional beekeeper's website. They used GPS (global positioning systems) to locate ringing payphones that delivered additional clues, as well as participated in on-line discussion forums and blogs that tried to unravel the puzzle.

"We wanted to put Halo 2 on the scale of other major event properties like blockbuster films, but didn't have that same budget," says Chris Di Cesare, the Seattle-based director of global marketing with Microsoft Game Studios. "We knew this could turn out to be very cost effective, and had the potential to explode."

Explode it did; over the course of three months, received more than three million unique visitors. The game also generated "buzz" for Halo 2, and was profiled by mainstream media like The New York Times and CNN.

"We looked at all the press coverage and player participation and analyzed our return on investment like we would a TV or radio spot," Mr. Di Cesare says of the game. "We found this was a better buy."

Rodney Reynolds, founder of Toronto-based video gaming forum, agrees that where promoting Halo 2 was concerned, the ARG was a roaring success. "It took the gamer out of the console and expanded the gaming experience. Very smart marketing, if you ask me."

Audi has also found ARGs to be "smart marketing." The Art of the Heist increased visits to its website from 840,000 last May to 1.2 million, and 33 per cent of visitors went to site pages that indicated an interest in buying. Though some traditional advertising was also used, Audi attributes its success to word-of-mouth promotion surrounding the game. Ardent fans created eight independent sites via which to share in the action, and Audi ultimately pre-sold about 500 A3s in North America.

As more marketers recognize the value of alternate reality gaming, marketing experts say we can expect to see much more of it -- at least until the novelty wears off.

"It may fade over time, as entertainment in general becomes more cross-media," Mr. Peters says.