Try it out: Next time you talk about the future of marketing, add the words “Gamification” and “Game Mechanics.” Suddenly you morph from marketing expert to marketing genius. You might be promoted on the spot. The world will be your oyster.

Even better: Gamification will transform education and finally fix that darn Global Warming thing.

Seriously, wouldn’t you study that much harder if a class valedictorian was called “White Knight Paladin Level 20″? Of course you would. At least that’s what Seth Priebatch, the founder and Chief Ninja (You can’t make that stuff up.) of SCVNGR told the world at his South by Southwest keynote in Austin. He referred to the education system as “one of the most perfect game ecosystems that’s out there, “full of challenges, rewards, rules, allies, enemies, countdowns, and incentives, “all sorts of things that basically make school the best real-world implementation of a game that’s out there. Priebatsch called education “a poorly designed game; it’s kind of broken.”

What is gamification?

Gamification is the use of game place mechanics in order to encourage people to adopt applications and, ultimately, change behavior. Think about Foursquare: People are encouraged to check-in at physical locations in order to earn badges, mayorships and rewards (coupons, freebies, etc.). Gamification or Game Mechanics work because it makes technology more engaging/entertaining by encouraging desired behavior and taps into the human desire to play a game. It can help to perform tasks that are normally considered boring or arduous.

Gamification will gain in importance

There’s a good case to be made that ‘Pleasure’ should be added to the 5 P’s of marketing. Why shouldn’t pleasure be an extension of a great customer experience? Right now, customer experiences are mostly limited to well-working and easy to use. In the near future, a great customer experience has to add the fun factor. When you’re being rewarded to do your timesheets, you’ll do them more timely. And it might be even a task you’ll be looking forward to. You can create ‘player journeys’ to reward people with status, access and power – you create meaning inside of the mechanics. Loyalty programs can be expanded through leaderboards, each customer interaction can become an enjoyable experience.

But, please, don’t overhype the hype

Gamification is an important tactic to help change human behavior. It can make life more entertaining and more pleasurable. It will make arduous tasks more enjoyable. It can be used to change bad habits and transform into more positive actions. But, let’s stop the hype before it gets really started. Let’s deliver on small promises before we promise the world.

This fabulous illustrations courtesy of Ogilvy (via Brad Hill)

I’m writing this a few hours after my return from Austin. As usual, SXSW was whirlwind of knowledge, brilliant minds, trial of new technologies and a lot of socializing.

It’s getting bigger and bigger

It was merely impossible to see 20% of the panels/keynotes I was interested in. The conference is now so spread out that you really have to limit yourself to 1-2 panels and go with the flow the rest of the day. Bigger doesn’t necessarily mean better but my experience was much better than last year. Maybe it was my overall attitude, my focus on networking or the conference felt more elevated and improved from last year.

With one exception, the keynotes weren’t good

Blake McCoskie, CEO and Founder of Tom’s Shoes, stole the keynote show by a huge margin. His story was inspiring and conveyed the passion he feels for his brand. I wish all keynotes would have been of that caliber but it gave me more time to network and learn by talking with fellow attendees.

SXSW’s content: It’s what you make it.

SXSW has turned into a huge farmer market. You have to walk down all the stands, try out some fruit, bite into a few sour apples until you discover something sweet. It’s up to you to do all the legwork in advance, have Plan B and C for each session in place and leave as soon as you feel the session doesn’t meet your expectations. I went to 10 or so sessions and 5 of them were fabulous.

It’s about the people

In a cab, in line, at the Allhat party, at the DraftFCB event, at a local restaurant, on the street: SXSW is about connecting with people. Replacing the Twitter avatar with a real person. Meeting strangers and parting as friends. Connecting friends with other friends. That’s the real story of SXSW.

Big brands are moving in

Samsung hosted the blogger lounge (Ironically more Apple than Samsung products inside the lounge) with interviews, book signings and a lot of Pepsi. Chevy really made an impact with their car service for attendees, test drives, charging stations, the Volt lounge and party sponsorship. Pepsi was basically everywhere, sometimes the only drink you could get was a Pepsi Max. They sponsored a lounge and a stage, sometimes manned by my friend @schneidermike. (He should just legally change his name already.) American Express partnered with Foursquare to launch a form of a loyalty program. Should be interesting to see the results. And, once again, Apple was the marketing king without spending any money on sponsorships: They opened a “pop up” store and geeks lined up for hours to get their hands on the new iPad2. Just to show them off in the next day and do the marketing work for Apple.

More importantly, more executives of large brands and enterprises were present, trying to figure out how to transform their business. I had more discussions about social business and less chat about bright, shiny tools.

Oh boy, so many apps and not enough screen real estate

Situationist, Hurricane Party, Beluga, Ditto, Yobongo, LiquidSpace. And I’m barely scratching the surface. It was fun to try them out and evaluate their worthiness to remain on my iPhone. Unlike other SXSW’s, this year there was no break-out technology. No Foursquare or Twitter. A lot of hype surrounding SMS group chat tools like Beluga and GroupMe but I didn’t experience a high adoption rate in my graph. It felt more like a new feature than an innovative  tool. The LocalMind Q&A tool looked interesting and could become quite helpful over time.

Would love to hear your thoughts. In the meantime, I’m busy deleting some of the apps I downloaded a few days ago.

Josh Williams, founder and CEO of Gowalla, surprised the audience during his keynote with quotes like “Badges are bullshit.” and “Gamification isn’t cool.”

What?

For three days we heard that gamification will solve every problem known to mankind: Education, Global Climate Change, ingrown toenails. And, suddenly gamification isn’t cool? Maybe it’s just not cool because Gowalla is losing the battle of location-based services to Foursquare and Facebook Places? Why was it cool when Gowalla signed a deal with Chipotle? And maybe badges are bullshit because Foursquare continues to bank highly on them and thrive?

We could ask these questions but there’s more behind the repositioning

When you’re losing to your competitor, you re-evaluate your mission and your vision. You have done everything in your power to beat them but, for some reason, they are leading in each and every category. And you start to realize that the initial reason for starting your company might have been forgotten while trying to catch-up with your competitors. You never meant to be like Foursquare (just like Yahoo never wanted to be like Google and the comparisons were always weak and meaningless) and you always tried to differentiate yourself by offering passports, connecting people with experiential places. But the public didn’t see this subtleties, they saw you as the LBS loser.

You have two options: Either dig in and continue the war until the bitter end. Or change the game.

Gowalla decided to change the game, transforming the service into a storytelling platform where people can document their memories by associating them with the places where they happened. No specific plans were revealed but it’s likely that Gowalla will add tools that will help people to add more content around specific places. The gamification part of the platform seems to be destined for the pile of buzzwords. And the pro-active part of check-in might change to a more passive activity.

A good move by Gowalla. The execution of their revised vision will determine if user will follow them on their new path.

Hurricane Party, Liquid Space, View, Localmind, Situationist – just some of the apps I’ve downloaded in the last few days at South by Southwest. I’m sure I missed out on tons more. And I’m glad I did. The appsphere has become unmanageable. I have around 100 on my iPhone, use maybe 5 of them regularly, 5 more on a weekly basis and a handful during special events. Foursquare is an interesting tool during events like SXSW, it helps me track people I want to connect with. Personally, I have no use for this tool when I’m back home. (I see benefits for the youth market but doubt we’ll ever see adoption throughout all segments.) The ‘dealification’ of location-based services as David Berkowitz calls it, might prove to be successful for Foursquare and Facebook Places (all others seem to fade rather quickly). But it will also transform its value from social to pure commercial. Hey, Valpak is still around and making money.

It makes sense for companies like Foursquare to cash-in as quickly as possible. When Mubarak’s regime an be swept away in 17 days, Foursquare can be forgotten with one tap of a new app. There a new apps that move location-based services into a more semantic and intention-based space. And there are apps that are more focused and useful when you’re in a certain mindset. The cold hard truth is: We have way too many apps. And it’s getting harder and harder to break through the clutter.

We need to aggregate functionalities

QR Code? I need an app. Picture sharing? App. Location? App. Intention? App. Conversation? App. Information Sharing? App.

Why? I want an app that integrates all these functionalities. How many photo sharing apps do I need? I want one app where there’s one camera button and I can choose between QR Reader, Photo (include Instagram while you’re at it), Video and, if possible, Google Goggles. Suck in my complete Social Graph and allow me to engage with them on my terms. Integrate readers (RSS/Instagram). And let me customize it. In short: help to delete 20 apps by aggregating all their functionalities. Cleaning the apps wasteland will help me clean my screen, clear my mind and give me back some time to look for real innovation.

The time of incremental innovation is over. You either aggregate or innovate. Or I delete.