Branded Entertainment Site Combines Community and Digital Games

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LOS ANGELES -- A major international player in brand-backed online communities is breaking into the U.S. as European-based Habbo Hotel opens for business.
Habbo Hotel is a Web Site that offers community, digital games and chat rooms for children in an environment that provides marketers access and feedback.

The creators of Habbo Hotel, a teen-targeted animated Web world where users can play games, chat and customize characters and rooms, have hired teen marketing agency Alloy to shepherd its U.S. introduction. Alloy will handle marketing and ad sales, activating its media network that includes in-school exposure reaching 55% of all high-schoolers each day.

21 million users

The Habbo Hotel site is active in 16 countries, including Brazil, Germany, Japan, the U.K. and Finland, where it was hatched. There are 21 million registered users for a site that did no advertising for the first three years of its life; it launched in 2000.

It had a soft launch in the U.S. in September, and has had 900,000 unique visitors since then, according to Nielsen/NetRatings. The site is free for members, but there's a small cost for furnishing the virtual rooms, though only a small percentage of users do so. The bulk of Habbo's revenue comes from sponsors.

Marketers that have integrated their brands into Habbo Hotel internationally include Procter & Gamble Co., Nokia, PepsiCo, Nike, numerous record labels and Hollywood film studios. Habbo Hotel launches into an arena where "advergaming" is already rooted in the U.S., and brands are increasingly embedded into favorite teen pastimes such as video games.

Advertisers' role

"The vision was to create a completely new type of teen brand rooted in an online community," said Timo Soininen, CEO of Sulake Corp., the site's parent company. "Advertisers have had a role from the beginning, but it's a relatively clean environment with a few select campaigns."

The deal is in line with Alloy's strategy of developing a few long-term relationships with marketers. Existing alliances include Regal Cinemas, the largest theater chain in the country, and magazine publisher Hachette Filipacchi.

Community and gaming

"We think this brand has a lot of potential in the States," said Derek White, executive vice president of Alloy Media & Marketing. "It's at the crossroads of community and gaming, and advertisers can get really creative with it."

Later in the year, Alloy executives aim to launch a Habbo version for handheld gaming devices and possibly other wireless devices.

Alloy will promote the site to its database of 24 million children, through its catalogs that reach 2.3 million teenage girls a month, and its Web sites. Mr. White said advertisers are already interested in linking with Habbo Hotel, based on its growth and success in other countries.

Frequent contact with users

Part of that success might be attributed to the frequent contact with users who have given Habbo's creators such advice as "Please do not turn this site into advertising hell!" and asked questions like, "Where's iPod?" Users are between 13 and 16 years old, with an even boy/girl split, Mr. Soininen said.

However, Mr. Sioninen said the youngsters want the added value that offers from marketers can give. In return for virtual swag, users answer questions about the site and its advertisers, which is then provided to the brands. There's a weekly newsletter, with room for sponsors, and regular polls, which Mr. Soininen said have "extremely high" response rates.

Marketers have responded, too. Hearst Publishing's CosmoGirl, for the launch of the publication in the Netherlands, created a branded room that looked like an American hamburger joint in the virtual hotel. Users who clicked on billboard displays in the room went directly to CosmoGirl's Web site. Nearly 10% of the youngsters who went to the room clicked through to the link, considered a high response rate in the Web world.

Branded furniture

For a campaign a few years back to introduce PepsiCo's Mountain Dew to several European countries, the marketer created branded furniture that users could collect through a promotion that happened online and in stores. Habbo Hotel users also were the first to test the product in the program that went from virtual to real world and back again.

The virtual furniture became so popular that users were trading it long after the promotion ended, Mr. Sioninen said. Eventually, the site will track such activity so the brand can use it as a gauge of the campaign's effectiveness.

The site aims to be child-safe and parent-approved. It does not accept ads for alcohol or tobacco and evaluates categories and campaigns on a case-by-case basis. Activity on the site is monitored using what Mr. Soininen called "Orwellian tools," so there's no swearing, harassment or otherwise inappropriate behavior. There's even a Habbo version of Neighborhood Watch so users can police their own territory.
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