Greedy Webkinz Annoys Parents, Trashes Brand

One of the greatest online success stories of the past two years, Webkinz, has suddenly threatened its brand and annoyed its most important constituency (parents) by bombarding kids with ads.

The Webkinz model was simple and brilliant: sell kids a $15 stuffed toy and invite them into a virtual world where their toy exists as an avatar. The concept was so successful that the Webkinz site has jumped to 7 million uniques in October, up 800% year over year and more than twice the size of kiddie site Club Penguin, which Disney recently bought for about $700 million.

But now Webkinz has quietly added ads to its site, and parents feel ambushed and pissed. As Louise Story reports in the Times, many Webkinz parents are threatening to bar their kids from using the site, thus threatening the good will and business value Webkinz’ Toronto-based producer Ganz has built over the past two years.

The answer? If Ganz really needs the money, it should immediately eliminate the ads and charge more for the toys. Specifically, it should add “accessory” packages that allow kids to do more in the virtual world. Otherwise, it should just kill the ads, sit back, and collect cash.

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