Dell, eBay, Sephora Offer Virtual Gifts on Facebook

A New Frontier in Social Network Ads?

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NEW YORK ( -- Digital gifts used to mean iPods and GPS devices. Call it a product of a flagging economy, or maybe even eco-conscious guilt, but the term has come to entail something entirely different -- not to mention weightless and wholly pixilated.
Facebook's current holiday promotion features gifts sponsored by Dell, eBay and Sephora.
Facebook's current holiday promotion features gifts sponsored by Dell, eBay and Sephora.

Virtual gifts -- tiny icons displayed on user profiles, pioneered by Facebook as the intangible present of choice -- are being employed by several major companies this season.

Facebook's current holiday promotion, which officially went live at midnight, features gifts sponsored by Dell, eBay and Sephora. Each company is offering one of its 250,000 allotted virtual incarnations for free through the holiday weekend in hopes of drumming up conversation and a little zeal for actual products should it come time to leave the computer.

Going fast
Since the three shopping virtual gifts launched overnight, Facebook already had more than 30,000 given by users, and that's "growing now that it's daytime," e-mailed Matt Hicks, a Facebook corporate communications exec.

Each of the companies' gifts is part of a broader Facebook marketing campaign, which entail engagement ads, personalized e-cards and community fan bases. According to Tom Arrix, VP-sales for Facebook, the gift promotion is designed to drive fan usage of brand names and, ultimately, retail decisions.

"They certainly bring the brand to life," he said.

This certainly isn't the first time a company has been digitized as a Facebook keepsake. Ben & Jerry's promoted their free Election Day scoop with a virtual ice cream cone. The day after, while there was a run on newspaper hard copies, a digital New York Times proclaimed Barack Obama's victory neatly from thousands of profiles. Even movie releases like "Indiana Jones" and "Sex and the City" got their virtual due in the social marketplace.

Priced to move
And while many of the site's gifts are free, including those in this weekend's promotion, plenty others go for $1. And users buy. More than 60 million gifts have been given since Facebook's Gift Shop launched in February 2007, which includes free gifts, sponsored gifts and paid gifts.

Jeremy Liew, a venture capitalist with the international firm Lightspeed Venture Partners, places Facebook's virtual gifts at a $35 million run rate. And, not unlike the physical retail climate, where around 40% of sales come in the last eight weeks of the year, Facebook gifts see a run in the same time frame, with year-end holiday-themed gifts getting the most paid traction annually.
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