Webkinz is a Word-of-Mouth Wonder

Discussion
Jan 29, 2007

By George Anderson

Want to know the power of word-of-mouth? Just take a look at Webkinz, a product described as “Beanie Babies on Steroids” that have sold more than one million units without a single ad being run.

The stuffed animals help connect young users to the web by a coded tag attached to each doll. Kids type in their secret code and a virtual pet replica of their doll appears on screen. According to the company, Webkinz’ customers typically range from six and up with kids between eight and 11 often owning more than two of the stuffed animals.

NPD analyst Anita Frazier told AdAge.com, Webkinz’ success provides a roadmap she expects many others to follow. “This will be an increasing trend going into the future, as toy manufacturers attempt to use what is appealing about the internet (engagement and interactivity) to keep their products as current and relevant to today’s ‘digi-native’ kids as possible.”

The dolls, sold through specialty retailers and gift shops, have relied upon sales reps from the Canadian gift wholesaler Ganz to get products into stores. From there, word-of-mouth, media coverage (including “Good Morning America,” “Regis & Kelly” and “Rachael Ray”) and retailer support have created a mass-market success from a grassroots beginning.

Webkinz has figured prominently on YouTube, where owners have shown off their collections and also developed original scripts such as “The Webkinz Murderer,” by a child apparently sick of a sibling’s preoccupation with the stuffed toys.

Steve and Chris Tini, owners of Sweet Be’s Candy & Gifts in the St. Louis area, not only carry the full line of Webkinz in their store but also collect the toys for themselves.

“Everyone is so excited about it,” Ms. Tini said. “The kids just love them, and parents love them too because they’re fun and safe. … The challenge for retailers is going to be keeping them in stock.”

Discussion Questions: What is your assessment of the Webkinz road to success? Do you see this approach, both in product development, sell-in and promotion, as becoming more prevalent in the future? Does the success of the Webkinz approach suggest the rate of failure among new products will be lower than traditional mass-market rollouts?

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12 Comments on "Webkinz is a Word-of-Mouth Wonder"


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Lynn Scott
Guest
Lynn Scott
15 years 3 months ago

I agree with Ryan Matthews–I live in this world with two girls in this target market and I have witnessed this phenomenon first hand for the past 6-9 months. It is completely driven by word of mouth and that is one factor that makes it so appealing. The fact that these kids are not being “marketing to” also drives the “cool” factor. Parents are feeling good about allowing their kids safe access on the Internet where they can have fun in a controlled way and play with their friends. You can check out another phenomenon–Club Penguin if you want to see more!

Camille P. Schuster, Ph.D.
Guest
15 years 3 months ago

This is a great example of a new generation using a technology with which they are thoroughly comfortable to share information. It is critical that retailers and manufacturers stay in touch with how consumers are communicating, what technology is commonplace to them, and what function that communication fulfills. Determining what’s the same and what’s different is the key to success.

Jeff Weitzman
Guest
Jeff Weitzman
15 years 3 months ago

I have to agree with those who say this isn’t new, and that the Webkinz success is because of the product, not the medium. That said, there are more opportunities for word of mouth success, and more vehicles for a successful product to proliferate rapidly throughout a market space, than ever before.

The door swings both ways, however. A great product’s sales can skyrocket on the internet-driven word-of-mouth backbone, but a lousy product can be killed just as quickly.

James Tenser
Guest
15 years 3 months ago

Webkinz = Neopets + Beanie Babies + MySpace.

Remember Neopets? Pocket-sized plastic electronic devices that required their owners to regularly attend to the basic e-needs of their e-pets, through e-play and e-feeding. Inattention could lead to e-malaise and even e-death. Some elementary-age kids became so obsessed with the responsibility of it all that they became a disruptive influence, and many schools were forced to ban them.

Webkinz has a similar dimension on its site. The “health, happiness and hunger” monitors require users to make regular visits or see their foster pets whither away. This fosters what some dot-com whiz kids used to call “stickiness.”

This company has shrewdly bridged the physical world of toys with the virtual world of the Web to create a self-propagating (viral) message. While it may offend the likes of Advertising Age that any product could earn robust success without conventional media buys, Webkinz is no less a marketing phenomenon. Its power is in distribution and e-marketing. For certain products, at certain moments, this can be enough to launch a hit.

Odonna Mathews
Guest
Odonna Mathews
15 years 3 months ago

I think this is marvelous marketing to parents and kids. It’s novel and fun. The animals are cute and easy to use. The kids are engaged in educational activities as well as learning the need to “feed, exercise and play” with their pet each day. There’s even an online chat room so the pets can talk to each other.

The website contains a clear, but long, user agreement so kids and parents are aware of the terms and conditions, license time frame and the need to keep their password, username and secret code in a safe place. There is also a clear privacy policy but it was not evident on their homepage.

This is powerful word-of-mouth advertising. Retailers and manufacturers would do well to look for opportunities to promote appropriate products or services in this interactive way.

Vahe Katros
Guest
Vahe Katros
15 years 3 months ago

Check out WOMMA’s (Word of Mouth Marketing Association – womma.org) membership–you might want to take a look; I hear their methods are working 😉

Michael Tesler
Guest
Michael Tesler
15 years 3 months ago

Marketing without using traditional media is not new, nor radical, nor “out of the box.” In fact, most new products and most smaller stores market through WOM through spreading information, events and activities that involve consumers, and through PR. Nothing new here except some big companies noticing what smaller companies do all the time.

Mark Lilien
Guest
15 years 3 months ago

Is Webkinz’ success based on word-of-mouth? Or is it based on great publicity? Can a toy get network TV coverage without a highly-skilled professional publicist? There are a million web sites that get ignored every day. There are a million toy novelties that sit on shelves in warehouses and stores. Very few toys get network TV coverage. The odds are the same as winning a million dollar lottery.

Ryan Mathews
Guest
15 years 3 months ago

Mark has a fair point, but let’s look at the question in another way. Will the division between virtual and physical marketing lessen over time and will that lead to fewer new product failures? The answer to the first part of the question is “Yes.” The answer to the second part is a somewhat paradoxical “Not necessarily.” Sure, logic dictates that demand driven systems ought to be more on target than push marketing, but as consumers learn how easy it is to get what they want the demand lifecycle may contract to the point that items fall out of demand as soon as they go into production. In fact, one could argue that consumers might only want products at their Beta stage in the future.

Mike Blackburn
Guest
15 years 3 months ago
This product hasn’t gotten popular because it was on Regis, or some other morning talk show when kids are in school. And it’s not because parents are watching this and then buying for their kids…. It’s popular because it’s a great concept of matching the #1 toy for kids and adults, the internet, with a hard product kids can bring in to school and talk about. In fact the toy itself is the marketing piece to get kids onto the internet. They bring it to school, show to their friends, talk about the website, and then those kids rush home and force their parents to go to the store and pick one or two up. That’s all the advertising they need. It’s kinda of kid “underground movement.” Most adults, until perhaps now, had know idea of this “discovered” product their kids must have. Advertising might have actually ruined the novelty experience. The website itself is great, because its a safe internet environment for kids to set up an account, play games and even send emails… Read more »
Ben Ball
Guest
15 years 3 months ago

It is hard to maintain the separation between a strategy and a vehicle. The strategy behind Webkinz is not new. The idea of a cool collectible with an “in-the-club” factor, coupled with the idea of a “series” has been around for eons. Having them catch fire through word of mouth is the norm. And we did it long before the internet was available as a communication vehicle. Think PEZ dispensers and the granddaddy of them all–baseball cards in bubble gum.

What the internet brings is a powerful new communication vehicle to execute the strategy. A corollary would be online ordering for home delivery. As we quickly discovered, the business model was still home delivery–the internet was just a cool new ordering vehicle.

Having said that, we expect a lot more of these virally driven business successes because of the increased accessibility and richness of communication the internet provides.

Barry Wise
Guest
Barry Wise
15 years 3 months ago

Webkinz has tapped into a new, but not exclusive way to reach their market. Manufacturers and retailers are constantly looking to find new ways to reach their customers, and Webkinz’s approach is working for them. On the rate of failure for other new products, it will depend upon others being able to reach their intended customers with other new and exciting ways that will not be limited to what Webkinz has done to find their success.

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