Updated: Webkinz Draws Heat for Advertising

Webkinz, one of the leading and original toy-based children's worlds, used to operate on a business model purely based on selling its plush toys with digital codes--a toy-based subscription. Now the company has added advertising to the mix, and some parents aren't happy. “One of the reasons why parents buy Webkinz for their children is the expectation that the site will be free from advertising,”  Susan Linn, the  director of The Campaign for a Commercial-Free Childhood, told the New York Times. “It’s disappointing that the site is choosing to maximize revenue at the expense of children.”

Ganz, maker of Webkinz, hasn't responded to any requests from comment--from either the times of the campaign--but it did remove one of the ads, a banner for the upcoming movie "The Chipmunks."

Webkinz were initially only found in boutique stores, but now they're being found in mass toy stores as well. Some analysts think the business move could hurt Webkinz in the long run.

Other worlds have gone this route to mixed effect. Disney's ToonTown switched from a subscription to an ad-based model this summer and grew in population. However, when Neopets added a virtual currency and shopping, it reportedly lost 15% of its members.  Webkinz also offers branded virtual goods for its ad partners.

It seems like the mix between advertising and subscription may be the real killer for parents.

“I bought into the Webkinz phenomenon because there wasn’t mass marketing on the site,” said Jacqueline Rupp, a mother of two, adding that she has spent more than $300 on Webkinz toys in the last two years. “If you’re putting out $15 for the Webkinz doll, you are paying for the ability to have something ad-free.”

Update: GigaOM points out that the reaction is not all negative: "In the comments to [an October Web post about advertising] Webkinz parents largely expressed satisfaction with Ganz’s response and, by extension, its decision to start running ads. One said, 'There is a limit to how much of this I am willing to buy, so if limited and tasteful advertising helps them meet their bottom line without me having to buy ungodly amounts of this stuff, it is fine with me.' And another, '[Y]es the ads told you where to go. But never ever did they try and take the littler ones out to another website. I thought that was pretty cool.'"

Comments

[Robert Brackenridge]

Advertising has been a part of the Webkinz platform for quite some time. It just so happens that they were simply advertising their own products. I might question giving up valuable space on your own website to someone else... Webkinz hasn't placed these advertisements all over the site either. They have limited them to a few locations on the main entry screen right after login. It appears that they are testing the waters by dipping in they're little toe. I'm certain they will be watching the metrics closely and listen to their community.

[Robert Brackenridge]

Advertising has been a part of the Webkinz platform for quite some time. It just so happens that they were simply advertising their own products. I might question giving up valuable space on your own website to someone else... Webkinz hasn't placed these advertisements all over the site either. They have limited them to a few locations on the main entry screen right after login. It appears that they are testing the waters by dipping in they're little toe. I'm certain they will be watching the metrics closely and listen to their community.