Facebook describes these credits as "a virtual currency you can use to buy virtual goods in any games or apps of the Facebook platform that accept payments." Their most common use is for the purchase of social-gaming assets, like animals or stores on Zynga's FarmVille or CityVille games. But other uses are rapidly proliferating, with the currency being used to buy tickets for events and rent movies.
Millions of people are spending hours playing games on Facebook. To increase their game status, most earn in-game assets through sustained play, rather than buying them with cash. A cow, an energy pack or virtual poker chips might not mean a lot to some people, but social gamers value them deeply, and consistently play long and hard to earn them.
This intersection between gaming, virtual assets and high perceived value creates an opportunity for marketers to reach the Facebook audience in new and powerful ways.
What distinguishes Facebook Credits as a promotional vehicle?
1. The high perceived value of Facebook Credits: The online retailer Ice ran two comparably valued promotions, one featuring Facebook Credits and the other a cash discount. More than three times as many users responded to the Facebook Credits. In other cases, campaigns to drive certain actions that could never be induced through cash -- such as providing one's e-mail address -- have proven quite effective when the incentive is in the form of digital goods.
2. Ads with Facebook Credits as a call-to-action generate higher click-through rates. After the online retailer Shoebuy added a Facebook-Credits offer as the call-to-action in its display ads on Facebook, the company enjoyed click-through rates two to three times higher than for the ads without the credits offer.
3. Campaigns with Facebook Credits enjoy viral distribution: Social gaming is inherently viral. People play the games on Facebook with their friends and they want their friends to have more assets, to enhance gaming. This is a big reason why users who have earned Facebook Credits via a promotion will share that fact in posts on Facebook.
5. Perhaps most important, incentives with Facebook Credits help break the discount cycle. Repeated price reductions train consumers to expect discounts whenever they make a purchase. Yet too many marketers rely solely on price promotions to move product. By offering customers Facebook Credits instead of cash discounts, marketers can give users something with perceived value that helps to move product.
When incorporated into the Open Graph, each Facebook-Credits redemption is displayed in the Facebook ticker, as well as in the timeline, with verbs like "redeemed" or "gifted,", which enables users to see all of their recently redeemed rewards. This further amplifies the distribution and visibility of the Facebook Credits offer.
As the applicability of Facebook Credits continues to expand, their perceived value will grow. Marketers should take note, and leverage them accordingly to enhance their advertising on Facebook.