Washed Up Webkinz and The Birthday Party Effect
On a zoom call the other night, my friends painfully reminded me of the Webkinz I had probably left starving many, many years ago. I first felt an overwhelming sense of guilt at how I’d left Bubbles, Buddy and Shirley (I couldn’t stick with the alliteration for some reason) alone and then I thought about how “wild” the Webkinz craze had been for my generational age group. If Webkinz are an obscure object to you, Webkinz are “the Beanie Babies of the 2000’s” combined with the modern reliance on technology. They also come tagged with a special secret code that allows you to adopt that critter virtually and then play online games, earn virtual money, design your own virtual house, and connect with other people who are logged onto the site. It was an addictive site that afforded kids a sense of independence in decision-making and freedom in communication with friends.
I remember how badly I thought I “needed” one, I remember begging my mom for one (she’s a strong woman and resisted), and I remember the “playground phenomena” that encircled the mighty Webkinz. After researching the Webkinz marketing model, I discovered that Webkinz didn’t use any advertising when they launched their unique product. Not a single ad. Absolutely no promotion or hype around it, which is surprising since this is a product with obvious Network Effects, and when we studied marketing with tipping points, we saw that a strong advertising campaign can lead to a high consumer expectation that the product will do well, and so the product succeeds and continues to do better than anticipated.
Ganz, the company which produced Webkinz, shied away from advertising because they decided that ads made the product more commercialized rather than community-focused. In fact, they wanted to rely on word of mouth, so that the discovery of the product would be more special for the child. He or she discovered it for themselves, and it wasn’t pushed on them by a parent or a marketer. To me, this seems like a risky approach, but it also seems quite genius if it works. Several articles dubbed this tactic as the “playground effect” or the “schoolyard effect,” both of which are cute, but from my personal experience with Webkinz, I would rename the technique the “birthday party effect.”
When Webkinz was becoming popular, I remember going to birthday parties and seeing girls tear open a package from one friend, only for it to be a stuffed animal… but not just any old stuffed animal, a Webkinz! At first, my 9-year-old (almost 10) self thought that was silly since we were “too old” for stuffed animals… or at least, we didn’t flaunt our stuffed animals to our friends anymore, but once every birthday party became centered around one friend (it eventually became many friends) giving the birthday girl a Webkinz, I, too, wanted one. The “Birthday Party Effect” is a bit different from the “playground effect” because many different social circles are brought together by children’s birthday parties. Family friends, school friends, dance class friends are all invited, whereas a playground or the schoolyard is condensed to one sect of children. I find that my birthday party phenomena more accurately depicts the quick sweep that Webkinz had among the young population.
In this diagram, it is easy to see how Webkinz spreads so effortlessly by way of “word of mouth” and birthday parties. Centered around “The Birthday Girl,” one party-goer who already has Webkinz, gives a Webkinz to the Birthday girl, and once everyone else at the party has seen this, the diffusion happens quickly. If having a Webkinz has a payoff of 3 and not having one has a payoff of 2, having a Webkinz spreads within 2 steps.
At every birthday party, after cake had been devoured and presents torn open, all 10-or-so girls would crowd around a clunky PC and watch the birthday girl adopt and dress her new pet, search for gems in a virtual mine, and build her own house. Of course, you couldn’t play any of the games or make any of the decisions when the birthday girl was playing, so everyone from that party would go home and ask their parents for their own Webkinz, because a child wants to be able to make their own decisions and connect with their friends on that platform.
There are evident network effects that run through this product, as the more kids that log on, the more you can chat and connect with your friends. But talking online with my friends wasn’t the part of Webkinz that intrigued me. Instead, I wanted to fit in. Webkinz became social currency in school, in Girl Scouts, in ballet class, and for a long time, my mom wasn’t budging on the fad. The more and more people who got them, the more people talked about what critters they had, how much money they’d made in their virtual world, how many rooms their Webkinz World houses had, and what gems they’d found in “The Cave of Wonder.”
Word of mouth is particularly powerful among children because when diffusion happens, you see people you’re connected to adopting behaviors, and then, normally, you weigh the cost and benefits of also adopting said specific behavior or product. But when you’re a child connected to a network of other children, any product that another kid may have has no cost. There is only a benefit (in the eyes of the child) of also getting that product. The cost would incur if you didn’t hop on the train that every other kid was on. You’d become the oddball. We’ve seen time and time again that diffusion among children works like a charm, and it will continue to work like a charm because of the way children process decision-making.
My mom never ended up giving into my many requests. Instead, I went to my last resort: my grandmother. She didn’t need any convincing to give in. Webkinz not only relied on children for the success of their brand but they capitalized on children as well. Children were their mules for diffusion… but as I’ve just noticed with all other toy trends, children are their own diffusion mechanism because they don’t process cost and benefit analyses the same way adults do. Now I understand why my mom kept saying no, because my Webkinz are currently sitting in a box in the basement and alone in a virtual tundra.
Maybe I should go check on them.
An added interesting find:
Webkinz also capitalized on diffusion by creating a facade of elusiveness and exclusivity around their product, similar to the techniques that Beanie Babies used in their era of crazy success. This is a whole other topic, but I found it also very intriguing. Ganz would regularly introduce new Webkinz models and regularly retire other models to make it seem like you could only get your hands on certain creatures for a limited time. Ganz also limited the “supplies of new models to increase consumer demand, leveraging scarcity to drive up perceived value.” They didn’t quite become an investment on the level that Beanie Babies had, but it did become an endorphin hunt for parents while desperately trying to get their hands on a coveted toy for their kids. The analogies between Beanie Babies and Webkinz run deep, especially since both experienced such a drastic, quick high and a bursted bubble in the end.
Sources:
https://www.nbcnews.com/id/wbna18274547
https://knowledge.wharton.upenn.edu/article/move-over-beanie-babies-webkinz-are-coming-to-a-store-and-virtual-world-near-you/
https://slate.com/technology/2015/02/beanie-babies-bubble-economics-and-psychology-of-a-plush-toy-investment-craze.html
https://thehustle.co/the-great-beanie-baby-bubble-of-99/