George Michie recently had the opportunity to pose some questions to Scott Silverman, former executive director of Shop.org and co-founder and VP, Marketing for Ifeelgoods about the burgeoning market for digital goods and working with Facebook Credits:
George: Give us a little background on what Ifeelgoods does?
Scott: We’re a digital goods incentive platform. It’s a new type of company and what it really means is that we help retailers and marketers replace traditional incentives with digital goods. The reason to do this is because digital goods have a lower cost and higher value to consumers. And, people love digital goods. We’re beginning with Facebook Credits, which are the most popular and versatile currency used with popular social games like Farmville and Cityville.
Aren’t these gamers just a bunch of teenagers who ought to be working on their homework?
This is one of the biggest misunderstandings about social games. The players are, in fact, people who control household spending. The profile of the average person playing social games is a 43-year-old woman with children. Teenagers, of course, should be working on their homework even though their moms are busy playing Farmville :).
In this economy how can anyone justify spending money on ‘virtual goods’?
Hundreds of millions of people are entertained by social games. The fulfillment they get from playing and interacting with their friends and family is 100% real. I’m not one to judge what people do (legally) for entertainment. If you have fun playing social games and you want to enhance your farm or your city or your mafia, you need virtual goods or virtual currencies.
What’s the difference to the advertiser between standard promotions and virtual promotions?
1. When they’re connected to social games, they’re associated with having fun and can bring entertainment to advertisements that aren’t possible with traditional promotions such as rebates or coupons.
2. They can be delivered immediately and digitally. Because they’re immediate, customers are more likely to share a virtual promotion via social channels like Facebook and Twitter. Because they’re digital, there are no hassles like you have with physical promotions that need to be ordered and take up space in warehouses.
3. Many people are indeed reluctant to take their credit card out to buy virtual goods. This is part of the reason they make great incentives. People love virtual goods. They just don’t like paying for them. We like to say that we take the guilt out of getting virtual goods because we allow people to get them from their favorite brand by doing things they do all the time like shop or sign up for an email newsletter.
Give us some examples of success stories through Facebook ads
A great example is Shoebuy.com. They ran a promotion offering 50 Facebook Credits with any purchase. To drive traffic to this promotion, they ran ads in Facebook. They found that the click-through rate of ads mentioning Facebook Credits was 2X compared to ads with an equal dollar value offer. We’ve seen this type of lift in CTR for our other clients as well.
Beyond Facebook ads, how else can advertisers use these credits?
Facebook ads are only part of the opportunity in using Facebook Credits incentives. They can be used as an incentive for practically any call to action. For example, shopping site, ShopAtHome, offers Facebook Credits for downloading their shopping toolbar. They make this available after customers Like them on Facebook. In eight weeks, ShopAtHome’s fans on Facebook went from 150,000 to nearly 500,000. They are also having success in getting more people to download their toolbar as well.
We’ve also found that when people receive Facebook Credits as an incentive, they are likely to share this information with their friends on Facebook. In fact, we’ve seen that 60% of people will share that they received Facebook Credits as an incentive. This has the effect of making these promotions go viral.
How easy is it for advertisers to get started?
It’s super easy. You can do everything yourself on Facebook. However, just like anything new, you should build in time to optimize your ads based on different targeting and creative. You can also work with an agency and take advantage of the experience and tools they make available to clients.
Where can people stay current on the latest trends in social gaming and virtual goods.
My favorite blogs are Inside Social Games and Inside Facebook. I also find AppData to be a good way to keep track of the hottest apps on Facebook. I started a group on LinkedIn called Virtual Goods and Retail, which can be found at http://linkd.in/ifeelgoods. And, if you like to spy on your competitors’ Facebook activity, check out Socialbakers.
Update: For eTail Palm Desert attendees, Teresa Tao from Shoebuy.com will be discussing their work with Ifeelgoods on Thursday 2/24 at 3:30pm under the Track A program.