Social Gaming, Advertising, & Microearning

A recent study from RockYou surveyed 18+ social gamers has tremendous implications for understanding how multiple revenue models can work together within the Social Web to generate maximum value for each the consumer and marketers.  Social gamers were found to be more receptive to ads within games, more willing to consume ads in exchange for microearning game reward, and more willing to spread ads throughout their social networks for virtual currency.  Social gamers also showed particular propensity for consuming ads that lead to real world rewards (i.e. coupons).

These findings illustrate how advertising and microearning can complement one another to drive product sales.  Social gamers represent the early adopters of online micropayment.  The virtual goods market which is driven greatly by social gaming (see Farmville) is projected to hit $14 billion in revenue in 2014.  As most virtual goods cost less that $5 USD, the fall into the micropayment category.  That gamers are willing to view and spread ads in order to accumulate rewards give credence to the argument that a microearning system as opposed to a traditional micropayment system is more compatible with the way consumers interact with the Social Web.  Consumers want to be paid back for the use of their social networks by brands.

In the social gaming setting, the dissemination of branded content actually becomes part of the game.  The consumer is driven to push out the content for virtual currency.  However, it is important to note that real world rewards are motivation as well.  While the virtual goods market is growing and important, being able to turn those virtual goods consumers into offline consumers would be the Holy Grail of social commerce.  Managed correctly, these finding indicate that marketers can use virtual goods within the Social Web to acquire new customers building brand affinity and awareness (where necessary) while building loyalty among existing customers, then transform those virtual customers into real world customers through the use of real world rewards.

To summarize, here is what I am proposing.  Marketers use advertising to sell branded virtual goods.  Dissemination of that advertising allows the consumers to microearn rewards in the form of promotional incentives or currency.  Those rewards serve two functions: 1) to incentivize consumers to continue spreading the branded goods, and/or 2) to lead consumers to offline brand contacts.  Whereas online brand communities are geared to towards building loyalty among existing consumers, this approach allows for new customer acquisition and brand loyalty building practices.

In closing, I would note that the principles of microearning exhibited here illustrate well that arguments for this approach made by Geoffrey Graybeal and I in our Modified News Micropayment Model and our expanded Modified Media Micropayment Model.  Moving forward, multiple promotional and revenue models will be needed to maximize the potential of the Social Web.

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3 thoughts on “Social Gaming, Advertising, & Microearning

  1. Nintendo is interested in virtual goods sales (micro-payments), but I don’t think they’ve bought the micro-earning element yet. I think it makes sense and encourages players to perform particular behaviors that encourage the overall viral aspect of spreading one’s game. The thing I’m curious about though is that Nintendo is still really vested in physical product sales (cartridges/disks) and will someone go out and buy a thing based on someone else asking them to play on Facebook for example.

    The trouble is, that many companies are only half buying into the whole idea and so what they wind up with is half returns, which they’ll then point to as “failures,” when they didn’t really try.

    • I think you are right on in terms of companies buying in half way. Hopefully, the research we will be doing in the spring will provide empirical support for buying in all the way. Also, you are correct that Nintendo has ot fully incorporated micro-earning. However, with Wii points already in place, they certainly could.

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