Virtual Games, Real Results

Whether trying to find a new weapon in Mafia Wars, looking for someone to tend crops in FarmVille or caring for animals in Zoo World, Facebook gaming is a hot trend. But social gaming is no joke: According to the report “Inside Virtual Goods,” the amount of money spent on “virtual goods” in such games is expected to top $1.6 billion in 2011. As retailers continue to venture into social media, one company says that the love for social games has huge marketing potential.

Founded by former members of Shop.org, Google and Paypal, Ifeelgoods is a first-of-its-kind virtual goods incentive company designed to help retailers tap into the worlds of virtual goods and social gaming. Co-founder and vice president of marketing Scott Silverman says offering deals via social gaming can make online promotions more effective and less expensive than discounts, coupon codes or gifts with purchases. More than 290 million people play social games every month, he says, and the average gamer is a 43-year-old woman, retailers’ target market.

“You have this enormous group of people who are playing social games and also control household spending,” says Silverman, the former executive director of NRF division Shop.org.

Games make money by selling virtual coins or currency that can be used to buy items, accessories or space within the games. In FarmVille, which is played by more than 60 million people — approximately 10 percent of all Facebook users — players can convert Facebook Credits into Farm Cash to buy supplies for their virtual farms. The credits have become so popular that they are now even being sold as gift cards by Walmart, Best Buy and Target.

Using Facebook credits as incentives
That’s where promotions come in. Silverman says that by tapping into their own Facebook pages and social media sites, retailers can use Facebook Credits as incentives. As one Credit is only worth 10 cents, retailers can offer what appears to be a more valuable promotion for less than a quarter of the cost. Instead of a promotion that offers 10 percent off all orders of $100 or more, Silverman says, retailers could offer 50 free Facebook Credits.

“As social games become even more integral to people’s daily interactions and personal relationships, it’s evident that retailers who learn how to capitalize on these trends will have a powerful advantage over their competition,” he says.

Silverman says retailers can also use Facebook Credits promotions to reward Facebook fans, attract new friends or entice people to sign up for their e-mails and newsletters. Retailers benefit by exposure to the social gaming audience, and the social game publishers benefit from exposure to new players and increased sales of virtual goods.

At press time, Ifeelgoods was working on holiday promotions with a number of retailers. Shoebuy.com jumped on board in late November, offering 50 free Facebook Credits with any purchase at its website. Shoebuy.com chief marketing officer James Keller says that using Facebook Credits as an incentive gives his company the ability to spark sales by using something they know their customers care about.

“We know that people like to play these games and we thought it would be fun to try to put these out there,” he says. “We wanted to do something that was a little bit different.”