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AdNectar Tops Two Billion Served
By John Gaffney
As a traditional, innovative American Midwest manufacturer, 3M is known for being progressive in product development. After all, it invented the ultimately practical scotch tape, post-its, and protective cleaning products. But it is not exactly a marketing early adopter. So when 3M announced it would get into the once airy world of digital goods, the event was a sort of validation for the tactic.
“I think 3M getting into this was a big deal because it shows how smart they are as a company and also shows that digital goods can be a good reason to engage with a brand beyond what we would consider standard reasons,” says AdNectar marketing VP Paul Martecchini, whose company helped 3M design and execute a DG campaign around a product called Privacy Filters. The filters are are screens that can be attached to laptop, desktop, or mobile screens to make onscreen data harder for passers-by to read in high traffic areas. The virtual goods line for the product is called “TMI” and features photographs of people caught in very embarrassing situations, such as construction workers unaware they’re showing off their thongs.
Users can open TMI gifts and watch a commercial for Privacy Filters that features the embarrassing situation shown on the badge-like basic gift. The virtual gifts are free and can be sent from an app called “TMI Moment” that doesn’t mention the Privacy Filter products explicitly. Martecchini says TMI gifts go viral on the merits of their own entertainment value, rather than emphasizing the conservative nature of 3M’s actual product.
Digital goods are more than a curiosity point for publishers. They can dirve more customer engagement and drive revenue in competitive markets. They have been a revenue staple for social media and social media games for more than a year. According to a recent Financial Times article, which monitored the sale of virtual goods across gaming platforms like Facebook, Second Life, Xbox Live and the iPhone App Store, the market has grown exponentially over the past two years. In fact, digital sales from social networking platforms like Facebook make up the lion’s share of this new market, and while Facebook itself generates respectable revenue from the sale of virtual gifts, 80 percent of Facebook sales come through third-party games like Farmville. Zynga, Playdom and Playfish alone are responsible for more than $300 million in sales of virtual goods this year.
A PlaySpan report found that 80% of users who make a virtual goods purchase do so in order to use the item in their game themselves. Only 20% of virtual goods buyers will purchase items with intent to give them to another player as a gift. Two-thirds of buyers purchase virtual goods about once per month, with one-quarter purchasing as often as once per week. Only 7% of those responded purchased every day. Likewise, only 12% stated they purchase virtual goods only once per year.
“They are more than a promotional currency although some companies are using them that way,” says Martecchini. “Facebook has certainly shown that there’s a big paid business there, but there also a huge opportunity for companies and publishers to develop virtual goods that can be sent to friends and a huge opportunity for brands to develop new engagement points.”
AdNectar counts Godiva Chocolates, Warner’s Harry Potter, ING, and Gillette among its clients. On January 4, it announced that it reached 2 billion virtual goods served from its platform. Also, over 10 million virtual goods have been sent between friends on social networks. The campaigns scale quickly, according to the company. For example, over 1 million Malibu Rum branded drinks were sent in two weeks; and over 1 million Nestle Toll House cookies were sent for the “Bake some Love” campaign. Engagement rates are also reportedly high for companies. Rates are anywhere from 2% to 6% because the campaigns tap into the implicit trust between your friends on these social networks. Also, brand impact is exceptionally high; 16% lift in purchase intent for Nestle Toll House, and 9% increase in brand favorability for Malibu Rum.
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