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Gamification, the art and science of applying game theory to online marketing, is HOT. The world Google Trends graph above confirms interest is high and getting higher. The steepness of the curve maybe its most impressive accomplishment.

Why Is Gamification So Hot
It is hard to think of any Internet marketing that can't be made better with gamification? The curve became very steep as Google began twisting our SEO fates with Panda updates. There is a correlation.

Google's new algorithm cherishes heuristic measures such as time on site, return visitors and pages viewed. Nothing tickles those metrics better than gamification. What is gamification?

Gamification, when applied to Internet marketing contains these components:

* A game with an objective measure, some "material" gains.

* A leaderboard that compares progress in the game.

* Small gains leading to bigger gains.

* A reward system easy to communicate across social nets.

* A game within the game.

* A social horse race.

Material Gain

Klout is a good example of "material" gain. As one's Klout score increases by making waves on the social net "material" gain is realized. For now we will overlook the circular nature of the rewards system (the primary benefit of your Klout score going up is your Klout score going up) and leave an upward swing as "material gain".

Leaderboard
Scoop.it's My Community is a great example of a perfectly conceived and executed leaderboard. Your track isn't against the top of the stack since seeing Robin Good or Michele Smorgon (@maxOz) visitor counts would be de-motivating. In fact, Scoop.it started with My Community that shared the top of the leaderboard before changing to just a Scooper's immediate competitive set (much more motivating).

Small Gains
Small gains are always the stepping-stones to bigger gains. The nature of a well-constructed game is the reward system never stops but does ratchet up the more it is played. This ability to slide rewards with play creates a cocaine-like addiction. It is no mistake that the leading troll on Reddit explained his self-destructive behavior as, "I did it for the points," as if anyone should understand his addiction.

The interview, not a Reddit player looked at the man as if he was insane. Reddit's gamification was both means and end and the reinforcement came so fast and furious this man was overwhelmed to the extent his life is in ruins from chasing "points". 

Social Points
Klout and GetGlue are good about prompting sharing of achievement across social network. Sharing reinforces the gain and sells the game.

Game Within The Game
On Scoop.it the daily game is views and the game within the game is views against your immediate competitive set as expressed in My Community. On a workout site the most pushups or greatest weight loss can be games within games. Games within games are wheels that increase engagement. Players who play the game within the game are twice hooked and may be the games greatest advocates.

Social Horse Race
The most valuable competitions are close ones. There is something in human nature that wants to root for the underdog that wants the thrill of victory. We care more about races when they are close, so gamification designers must find ways to insure competition. Scoop.it insured competition when they changed from top of the stack My Community to allowing each player to see their competitive set. If one or a few players run off and leave the pack the game must be reformed to promote competition or it won't endure.

Other Resources
I wrote what may be the first gamification white paper for Atlantic BT last year:

Gamification: Winning Hearts Minds and Loyalty Online

Gamification Summit in SF April 2013

Reality is Broken by Jane McGonigal