Tuesday, July 15, 2008

Case Study: Dooce's Nintendo Wii giveaway

Recently, Nintendo reached out to Heather Armstrong (Dooce) to involve her and her blog in a promotion for the Nintendo Wii, and the Wii Fit. Nintendo first threw a Wii Fit party at Armstrong's house for her and 10 friends. Then, the game-maker gave Armstrong 5 sets of Wiis along with 5 copies of Wii Fit, which Armstrong then gave away to 5 of her readers.

Additionally, Armstrong blogged about her involvement with Nintendo, and stressed that she wasn't being paid by the company to promote the Wii or Wii Fit. She explained on her blog:
I get approached to do things like this all the time, but this is the first time I've done a give away because this is a product I use, something in my house, something I'd love to share with you. Nintendo is not paying me to do this, and just to clear up some confusion, I would never accept money to post about anything here. That's not how this website works. Everything you see in my style section is something I have bought with my own money or is a gift sent to me from one of my readers, a gift I would have gone out and bought had I known about it beforehand, something that fits right in with my aesthetic. I work very hard to make sure that you can trust that what I say here is in no way influenced by advertisers or corporations who are trying to reach a bunch of eyeballs. Your eyeballs deserve as much.

Armstrong added that she would select the 5 winners at random from people that commented on this post. As you can see, she received a staggering 42,232 comments for that post. Now according to this site, every Wii set costs Nintendo $160.00. That means those five Wiis that Nintendo gave away, cost the company roughly $800.00. Add in 5 Wii Fits (which retail for around $80), and the likely cost to Nintendo for this promotion (5 Wiis plus 5 Wii Fits), is approximately $1,000.00.

Now, given the same site's data, that means that Nintendo makes $90.00 per Wii system it sells. At that rate, Nintendo would have to sell only 11 Wiis from this promotion, to break even.

For reference, that's 0.025% of the comments. So if 11 out of the 42,232 comments resulted in sales, Nintendo broke even.

If just 1% of the 42,232 comments translated into sales, then the ROI for this promotion is 3,700%.

I'd say the promotion will likely be a huge success for Nintendo. Do you agree or disagree?

Bonus: I also posted about this today at Daily Fix.

UPDATE: Darren makes an interesting point in the comments, that these calculations don't include Nintendo's manpower/travel/etc costs. He's correct, but the problem is that those costs aren't known. The cost of the machines are 'known'. Even if we assume that the manpower costs for Nintendo to be several thousand, I would still think this promotion paid for itself many times over. Hopefully Nintendo will later publish more exact figures.


Amber said...

It's a beautiful example of building enthusiasts for your product (in part by creating a great one to start with) and then tapping that enthusiasm. Nintendo knows exactly where their community is (hint: all over the internets for starters) and just brought the love right to their doorstep.

And Dooce did a great job of disclosure, which instills trust in the community (very key). Heck, I want one too.

Anonymous said...

Yep, that's pretty good. Blogger outreach is a tricky thing to get right and I think there's already a lot of bad examples out there but sounds like Wii got that one spot on.

Anonymous said...

Seems you missed the biggest benefit to Nintendo, they have a community talking about their product.

Assuming the comments are mostly positive, they've build good will and stories that will be told again and again.

And just one sale to a heavy user could result in more profit than the total you referred to.

Mack Collier said...

Amber and Neil, I love this because it perfects shows how EASILY social media can be used to reach a market, if used correctly.

Nintendo wanted to reach moms, so they FIRST threw a Wii Fit party for argubly the world's most influential mommy blogger. Then they gave her 5 Wiis/Wii Fits to give away.

That's it. They created a promotion where it would be almost impossible for them to not have a huge ROI.

Warren, thanks for your comment!

Anonymous said...

I think this promotion is perfectly simple -- the audience is spot on, and both Dooce and Nintendo earn extra credibility for being upfront from the start about the nature of their relationship.

Anonymous said...

I love it!

Anonymous said...

There's no question that Nintendo enjoyed huge ROI on this campaign. However, because I'm a pedant, I have to disagree with your math. Specifically, you've ignored the largest cost center: staff time.

I interviewed Heather about this, and so have a little more information. Nintendo actually threw two parties for her and her friends and family.

So, that involved pitching Heather on the idea, negotiating the details of the events, getting staff to the event (from Heather's blog: "some good people from Nintendo came to my house"), giving away Nintendo Wii's, Wii Fit and related swag, the follow-up, the distribution of the prizes and so forth.

Assuming an agency rate of $200/hour, let's imagine that, conservatively, 80 people-hours were spent on the project. Add in travel costs, shipping and incidentals, and this program could have easily cost Nintendo $20,000.

That's a drop in the bucket for Nintendo's marketing budget, and the result is still exceptional, but I'd encourage you to revise your calculations.

Anonymous said...

Good Job! :)