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Tech & Innovation
AUG 6, 2019

McDonald’s Japan Plays Pokémon GO for Business: A Model for How Small Teams Can Leverage Emerging Technologies for Wild Success

By Melissa McIvor, With Dr. Jorge Calvo
iStock photo/CatLane

Pikachu zapped back onto the global stage in summer 2016 with the launch of worldwide gaming phenomenon Pokémon GO. The sudden transition was truly something to behold: crowds of people clustered on seemingly unimportant street corners, shuffling zombie-like through parks, even sprinting to random locations only to stop short with a cheer or groan of frustration.

To Niantic and Nintendo (the game’s developers) and official sponsor McDonald’s Japan, this behavior was a mark of success. It was proof of marketing gamification and the harnessing of new technologies for business growth.

Simply put, Pokémon GO is more than a game about catching cute monsters—it’s also a master class in AR and IoT marketing strategy.

A New Kind of Gameplay

What, exactly, did Pokémon GO bring that was so new and exciting?

In a way, a call to action.

Players must physically go to designated Pokéstops and gyms to catch monsters, earn items, complete challenges, and battle other players. This is necessary whether or not you’ve engaged the AR setting, which uses a smart device’s camera to show Pokémon as if in the real world. The basics of the game are all free—spending money in the in-game shops is completely optional.

As Dr. Jorge Calvo, deputy dean of GLOBIS University, states in the Journal of Global Economics, “The game drew to the streets people who would otherwise be riveted to their TV screens or the computer with a game console in their hands.”

The active nature of Pokémon Go is a new take on gameplay that reaches every marketing demographic and directs people to physical locations—often small businesses.

Dollar Signs in McDonald’s Eyes…but a Small Team on the Job

A long-time user of marketing gamification, McDonald’s Japan was quick to spot the enormous potential in Pokémon GO. Still, the people assigned to the project amounted to a small team. Success became a matter of careful planning, data collection, and analysis, supported by the free publicity that came with the buzz around the partnership announcement.

The project was rolled out in five stages, outlined by Calvo:
  1. Business case development
  2. Analysis and design
  3. Purchasing and procurement
  4. Deployment
  5. Progress reporting

Although the size of the team may have been a reflection of doubt, it ended up adding an important element to the project. Working with such untested technology, there was little to go on for accurate forecasting. This made it all the more crucial for everyone involved to respond with agility and adaptability.

In the end, that paid off.

“The results for [McDonald’s Japan] were immediate and significant,” says Calvo. “It received 1.5 to 2 million daily visits across its 3,000 locations, an estimated sales increase of 22%, and earned an increase in market capitalization of 9.8%.”

The Geolocation Workaround

Pokémon GO is constantly improving its social aspects, and geolocation remains a pivotal part of gameplay. After all, the idea is for players to get up and GO.

Why haven’t other companies thought of using geolocation for marketing before?

Well, they have.

Location-based marketing isn’t anything new, but many companies avoid it due to a sticky issue plaguing much of the world’s new technology: privacy. Most customers don’t want companies to know where they are or what they’re doing, nor do they want in-your-face ads popping up everywhere they go.

Developers of Pokémon GO managed a unique solution to this problem. As Calvo puts it, “[McDonald’s evaded] the challenges of location-based marketing [by] bringing the customer to the location rather than going to the customer’s location.”

Players happily trek to McDonald’s stores to “catch em’ all,” and meanwhile contribute to McDonald’s collection of big data and demographics (age, gender, location), all of which can be put to use for further marketing.

Calvo summarizes the rich resource this provides: “Pokémon GO has achieved the ultimate challenge of bringing people from all walks of life together for the same purpose.”

The Power of IoT

The integration of emerging technologies into marketing strategies is shaping the way we behave—in the case of Pokémon GO, it’s literally pointing us in a particular direction. This makes for an irresistible draw for companies and customers alike.

As Calvo puts it, “…games with emerging technologies (smartphones, IoT, augmented reality, GPS) can be successfully used to attract traffic to stores at low cost and with almost immediate returns on investment.”

By September of its launch year, Pokémon GO reached 500 million downloads. Though the game has long since passed its peak, it continues to be popular—Japan alone still enjoys 3.4 million active users. With all the data collected from this project, it’s hard not to be curious what the next level of IoT gaming will bring.