Webkinz and Advertising 2.0

When it comes to virtual-world style social networks for young kids, there are two big players: Webkinz and Club Penguin, the latter of which was bought by Disney for $340-million earlier this year (interestingly enough, both of them are Canadian — Webkinz is an offshoot of a Toronto toy company called Ganz, and Club Penguin was started by a couple of years ago by a group of Web designers living in Kelowna, B.C.).

Both sites have made their reputations in part on how wholesome and family-oriented they are — historically, neither one of them accepted advertising, for example. Webkinz recently broke with that tradition, however, and started including advertising on its pages, and there has been an outcry about this that made it into the New York Times. Henry Blodget at Silicon Alley Insider says that a “greedy” Webkinz has “trashed its brand” and “infuriated” parents.

To me, however, the story seems a little more complicated than either the Times piece or Henry’s post are willing to admit. The always level-headed Anne Zelenka has a good roundup of the events at GigaOm, and from her description it’s clear that the reaction to the Webkinz move is considerably less black and white. In fact, the only ones who seem infuriated are a lobby group called the Campaign for a Commercial-Free Childhood.

It’s true that there are parents who responded negatively in the comments on a popular Webkinz-oriented blog, called Webkinzmom.com, many of whom made the point that they pay for the toys that give them access to the website, and so there shouldn’t be advertising. If you read through the comments there and elsewhere, however, you find just as many or more saying they don’t mind at all — and plenty of people wondering how they can get the Bee Movie costumes for their Webkinz pets.

Webkinz also responded to the criticisms on Webkinzmom in a letter, in which the company said that it plans to only accept a limited amount of advertising, that it will only run ads for family-friendly products such as toothpaste or family movies, and that it will not allow any links from the ads to outside websites, so that parents don’t have to worry about their kids wandering out onto the Internet unsupervised. Most of the responses on the blog seem okay with these limits.

It’s a lot of fun to slam Webkinz for creating a PR nightmare, but there seems to be a bit more to it than that.

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