Branded Virtual Goods Are Presents for Marketers, Too

Online Gifting Campaigns From Nestle, Malibu Have Trumped Banner Ad Results on Facebook

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SAN FRANCISCO (AdAge.com) -- In a sign that virtual goods aren't just the province of gaming anymore, marketers from Anheuser-Busch to 3M have offered up free virtual wares for social-media mavens to pass around to their friends. But how well have these online "gifts" paid off?

Nestle's virtual cookies provided a social vehicle for users to engage with the brand and share stories with each other.
Nestle's virtual cookies provided a social vehicle for users to engage with the brand and share stories with each other.
Chances are, if you're a Facebook-aholic, you have either received or even sent a branded virtual gift -- really, a display ad by any other name. Recently, a pair of virtual-gifting campaigns by Malibu Rum and Nestle have yielded results that trump banner ads on the social-networking site, suggesting that virtual goods may be another way for marketers to reach consumers who are spending more and more time interacting with each other online.

Offered through a number of Facebook application catalogs, Nestle's virtual cookies were the companion to birthday and congratulatory wishes. For the food giant, the goal was to translate its offline "Bake some love" campaign into a compelling online experience, providing a social vehicle for users to engage with the brand and share stories with each other. Users can personalize and embed photos of themselves into the virtual cookies.

"Nestle wanted to be an enabler for sharing stories, especially baking stories," said John Nitti, digital director at Zenith Media. "We wanted to be part of that experience and do it in an organic way."

Over two week-long periods in October and November, users sent more than 1.1 million Nestle Toll House cookies. The campaign registered a 16% brand lift, and a 17% lift in intent to purchase. About 3% of the people opened the cookie gifts, compared to the 0.02% to 0.04% who click on Facebook banner ads.

Malibu Rum did a similar campaign, as it sought to remind 20-somethings to make the distilled beverage part of their summer fun. Over two weeks last summer, more than 1 million virtual Malibu Rum drinks were sent; 7% of the users opened them, netting a 7% brand lift.

These campaigns have the potential to generate multiple brand impressions: Apart from the first impression when the gift is sent, usually as an image, users also receive a confirmation message that the recipient saw the gift. Other impressions occur when the recipient sees the image, and still more impressions would result if users post the cookies and drinks on their Facebook profile page.

"There's deep integration in the user experience, and there's social endorsement built into them," said Paul Martecchini, VP-marketing at AdNectar, which ran Nestle and Malibu Rum's virtual-goods campaigns. "These drinks aren't coming from Malibu Rum, it's people advocating a brand they're passionate about."

More than 1 million virtual drinks were sent during Malibu Rum's campaign, netting the marketer a 7% brand lift.
More than 1 million virtual drinks were sent during Malibu Rum's campaign, netting the marketer a 7% brand lift.
Mr. Martecchini also pointed out that when the company ran side-by-side tests of generic vs. branded virtual goods in the same catalogs, people preferred branded goods 10 times more. "The story is also about how consumers actually enjoy interacting with these branded experiences," Mr. Martecchini said.

Trust and word-of-mouth had as much to do with the success behind Nestle and Malibu Rum's campaigns than just a branded experience. "Calling it a web banner vs. virtual goods is a matter of semantics," said Dan Zarrella, author of "Social Media Marketing Book." "If we're friends and you send me a web banner, I'd probably open it, because we have a relationship and I trust you, and you're sending it to me because you think I'll like it."

But experts say preference for branded gifts has much to do with the way people use brands to express and differentiate themselves, much like the way some people proudly don designer labels to proclaim their status.

As people spend more time in the digital space, digital identity is becoming just as important. "People are spending more time on Facebook than they are face-to-face communications, and it's natural that if you are going to present yourself in the digital space, you care about how you look and how you sound," said Jeremy Bailenson, a Stanford professor and founding director of the school's Virtual Human Interaction Lab.

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Kunur Patel contributed to this report.

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