The virtual goods economy is roaring, growing in adoption and importance, and making the branded product or gift a powerful social media marketing tool. Members of virtual worlds are purchasing virtual goods for self-expression, social status, or to gain advantage in game play. Companies, including Kohl’s and Sears, have witnessed success by creating virtual boutiques and selling branded virtual goods and apparel on sites such as there.com, Zwinky.com and Stardoll.com.
With widespread adoption of social networks such as Facebook, virtual goods have found a new purpose and home. In these social networks, sending a gift to a friend has become a form of communication. Virtual gifts are self-selected – a user chooses to give a virtual gift because it appeals to their own or their friends’ interests, making them highly targeted. This is where brands come in.
Branded virtual gift distribution turns customers into brand advertisers. A virtual good can contain a link to a web site or video – offering brands the opportunity to engage their customers in deeper conversation.
Large social networks like Facebook and Bebo continue to look for new ways to monetize their users through virtual goods. Approximately five million virtual goods are exchanged on Facebook daily. Estimates for 2008, put Facebook virtual goods revenue between $300 and $350 million. And while traditional banners haven’t worked well on social networks, the results for branded virtual goods are compelling. While traditional online ad campaigns operating on Facebook can usually produce a CTR of .04%, stats reported by virtual goods provider, AdNectar show a click through rate of about .8 to 8% on their branded virtual goods. AdNectar also cites dramatic increases in purchase intent. Brand metrics company Vizu, conducted a study of their campaign on Facebook for Godiva, comparing reactions to the brand between a group that interacted with a branded chocolate gift and a control group. While most online advertising campaigns produce no more than 2% lift in purchase intent, Vizu found that the group that interacted with the Godiva branded gift were 20% more likely to purchase real Godiva chocolate within the next six months than members of the control group.
Like any good piece of content on the social web, virtual goods have the potential to spread virally. But going viral isn’t guaranteed. Marketers need to ensure that branded good is something that people would want to gift and share.
Tracking within virtual goods is measured by traditional metrics to capture interactions, clicks, and engagement time, but details such as demographics and viral spread can also be captured. Data to understand how the virtual good can affect brand awareness or purchase intent is currently difficult to obtain without a user survey.
Virtual goods drive engagement by integrating closely into social network dynamics – making it compelling advertising. Branded virtual goods, with the goal of driving awareness and sales for advertisers, are going to become a more integral part of the social networking experience in the future. And if you have a social site, there is an opportunity to get in on the virtual good economy. There are virtual good providers, such as viximo, that can provide the technology to offer virtual goods.
