Peer-To-Peer Marketing: No Pain, No Gain

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facebook_small.jpgHasbro and Mattel are this week reported to be considering legal action against Facebook and the makers of the online word game, Scrabulous. The game is very similar if not quite identical to Scrabble itself, and has quickly become one of Facebook’s most popular applications. It’s listed in their top 10 most popular, with a shade over six hundred thousand active daily users.

On the surface Facebook is not that different from the many other networks: a tool for bringing people together and helping them communicate. Look a little deeper though and this key differentiator becomes apparent: that fact that it’s an open platform, meaning that anybody (you, I or two Indian guys who like Scrabble) can develop an application for it. When somebody bites you to turn you into a zombie… when you get a message inviting you to rate your friends sex appeal… when somebody wants to compare movie tastes with you… chances are a third party developer has created that application which has resonated with the audience and taken off. Light the blue touch paper and watch what happens: peer to peer interaction at its very best. The fact that anybody can develop for it combined with Facebook’s established user base of around sixty million makes it an incredibly powerful tool.

Some of the steps taken by Facebook could only have been taken by somebody as young and willing to buck traditional business ideas as CEO and founder Mark Zuckerberg. Opening the platform was a smart move that many older, more experienced (read set in their ways) CEOs in his position would most likely never have taken. MySpace and partners are following with Open Social, and although the concept is certainly not new, Facebook broke new ground at this level.

Why do people create these applications though?  Some do it just for fun: the opportunities presented by Facebook opening up access to their audience are extraordinary. Some do it for exposure: having millions of people use something you created is quite the resume (and ego) booster.  For brands it’s a marketing tool: the potential and value of peer-to-peer marketing is huge. There’s revenue in all three, of course. Scrabulous is reported to generate $25,000 per month. Not exactly Brewster’s Millions, but nor is it chump change, particularly considering the meager resources at the brothers’ disposal. Multiply that across many applications and you’re talking serious revenue potential, although the real value for marketers is the exposure and brand building potential.

The opening up of networks like Facebook and MySpace provides an incredible opportunity for brand and cause marketers alike: all of a sudden you have access to a massive, engaged and connected user base. Look at all the interesting stuff on Facebook at the moment and think how it could apply to your brand. Think about doing something yourself. Peer to peer marketing is unique in that the trust, the most important piece and the piece that we struggle with the most, has already been established. The benefits for Hasbro and Mattel in having Scrabulous around far outweigh the drawbacks, and they should be thanking the makers instead of threatening legal action. A whole new potential audience has been opened up or brought back to the game, but instead of taking advantage they’re threatening to pull the plug.

At the time of writing, a Google news search for “Scrabble” returns over three hundred articles referencing the action. When was the last time the world’s media actually cared about Scrabble? Instead of trying to stamp Scrabulous out, Mattel and Hasbro should be nurturing the game and audience, partnering with the developers and building on the unprecedented online success of the Facebook game. You can bet that’s what Zuckerberg would have done.

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