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Nintendo is Ad Age's Marketer of the Year

By Beth Snyder Bulik
Advertising Age

Expanding audience
That careful attention to detail infused Nintendo Wii marketing pre- and post-launch. Along with the influencer moms, Nintendo extended the Wii experience to vacationers by placing units on Norwegian Cruise Line ships. Wii also reached out to senior-citizen-home residents, concertgoers via the Nintendo Fusion Tour, college students and mall rats.

It was Nintendo's creative marketing that bridged the gap from "just interested" to sales. The hands-on experiences of thousands of consumers, along with tie-ins with brands including 7-Eleven, Pringles and Comedy Central, were complemented by a clever TV and print campaign from Leo Burnett USA, Chicago, that featured two Japanese gentlemen traveling across America in a Smart car, ringing doorbells and politely inviting us all to join them with the signature phrase, "Wii would like to play." Publicis Groupe sibling Starcom handled media buying.

If consumers somehow still didn't get it, they could go online and watch scores of globally created videos designed to show people the possibilities.

The attention to detail carried into the design of the product as well. Über-game-designer Shigeru Miyamoto (inventor of "Donkey Kong," "Super Mario Bros." and "Zelda") insisted that the machine be small, elegant and simple to appeal broadly. He reportedly sent the Wii remote back to the drawing board time and time again to make the controller as uncomplicated as possible.

'Marketing 101'
"Marketing played a huge role in the success of the Wii and DS, and I think the power of having a focused message executed throughout all the elements of the marketing campaign is evident," says NPD Group analyst Anita Frazier. "It's sort of like Marketing 101, but too many marketers forget that having a solid positioning and messaging is the most important thing to do before you spend the first dollar on executing the campaign."

"We were optimistic before we showed [Wii] the first time ... [but by the reaction] we knew we had something even bigger than we had hoped for," says George Harrison, senior VP-marketing and corporate communications at Nintendo of America.

The marketing for Wii, on which planning had already begun a few months earlier, needed to play to that big impact.

"It was one of our biggest [campaigns] in terms of impact, although the actual [media] spending was about the same as the year before," Mr. Harrison says. "We didn't just double our budget to blanket both audiences [gamers and nongamers]."

Dexterity
Instead, Nintendo shifted its strategy to include more-aggressive public relations, more-creative media buying and, most important, more flexibility.

"In our PR, we've always done outreach, but in this case, when we noticed something interesting happening online -- like the weight loss using Wii Sports -- we would draw it to the media's attention," Mr. Harrison says. "The little things that kept showing up were picked up and blown out in marketing. ... When we saw what people were doing or how they were getting creative, we would move on it."

But why does the enthusiasm Nintendo has stirred up among a bunch of moms, cruise-ship lovers and old folks matter anyway? Because until now, no video-game marketer has been able to do it. For all the discussions and hype and strategizing, no one else has been able to expand the global $30 billion video-gaming market into a social experience that includes everyone from grandparents to babies (on YouTube there's a video of a 22-month-old playing Wii tennis).

Before Wii, Nintendo's market share was flat. Its GameCube console, while profitable, ranked a weak third to Xbox and PlayStation. In 2007, Wii and DS have been No. 1 and No. 2 in U.S. video-game-hardware sales for six of the eight months so far tracked by NPD. Estimates put Wii unit sales to date at more than 9 million globally, and DS and DS Lite at more than 40 million. Nintendo says it won't be able to meet demand for Wii this holiday season.

A 44% leap
While it's hard to say exactly how much Wii has propelled the video-game industry, at the end of the pre-Wii era, total U.S. video-game sales reached $10.5 billion in 2005, according to NPD. They rose 19% to $12.5 billion in 2006 and are on track to jump 44% to $18 billion this year.

Some data are starting to bear out the demographic shift sparked by Nintendo. Its internal research shows a 42% increase in DS purchases among women, a 127% increase among people over 30 and a 212% increase among people over 35 during an 18-month period ending in spring 2007.

DS experienced a big renewal of interest thanks to the summer 2006 launch of the smaller, brighter DS Lite. The launches of gamer titles "Pokemon Diamond" and "Pokemon Pearl" for DS were huge, while nongamer titles such as "Nintendogs" and "Brain Age" continued strong.

It's uncertain how much the competition is suffering from Wii's success. Rather than converting Xbox or PlayStation 3 fans to Nintendo, analysts believe, gamers are adding Wiis to their Microsoft and Sony setups.

Longevity
There are nonbelievers who write off Nintendo's game systems, particularly the Wii, as a passing fad.

"They're doing to Sony what Sony did unto them," says Mike Goodman, an analyst at Yankee Group. "They're capturing gaming households. ... And they've done the best job in marketing that they've expanded the marketplace."

But Mr. Goodman says he sees only another year or maybe two of Wii dominance, pointing to a slowing in the Japanese market, where the Wii is outselling the competition 3-to-1 vs. 6-to-1 earlier in the year. "They're tapping out their market," he says.

And while most believe sales will continue to be strong in the near term, Nintendo in 2008 will face serious marketing challenges of its own making. Much of its seasoned marketing staff in the U.S., including its chief marketing executive, Mr. Harrison, as well as Ms. Kaplan and Mr. Matthews, will leave the company at the end of the year when Nintendo of America relocates its sales and marketing offices from Redmond, Wash., to San Francisco and New York.

Fresh blood
"That team did much to build this success, and I'm concerned that a new marketing group might not get it," says IDC analyst Billy Pidgeon.

But the departing team has faith. "It really comes down to a very essential strategy if Nintendo is truly going to expand the marketplace with products," Mr. Matthews says. "It can't be an 'or' strategy; it has to be an 'and' strategy, and it also needs to be built on a strategy of advocacy."

In 2007, Nintendo didn't just change the video-game industry; it changed entertainment dynamics. In addition to coaxing generations of consumers to play, it inspired a new kind of entertainment interaction that's got the whole world trying to figure out how to cash in.

As we all await the next Wii-nomenon.