We are looking at how Facebook could increase its digital goods revenue by improving the Means, MotiveOpportunity for users to buy digital gifts. Yesterday we looked at Opportunity. Today we’ll look at Means. and
Means
Last year Facebook switched from denominating gifts in dollars to gift credits.
This was a good first step as users tend to be more willing to spend
virtual currencies than real money, even when they are readily
interchangeable.
Currently there is only one way to buy Facebook gift credits, and
that is via a credit card. But a lot of Facebook users don’t have or
don’t use credit cards. They may want to be able to buy and give gifts,
but they can’t do so. This is a common problem for a lot of game
developers, including many game developers on Facebook. The techniques
that worked for them can work for Facebook too.
As a start, Facebook could enable additional payment mechanisms, including Paypal, cell phone billingdirect debit
from checking accounts. With such an international audience, additional
payments mechanisms would allow many of Facebook’s international users
to more easily buy gift credits. (including premium SMS) and
Some Facebook users, especially those younger than 18, may not have
access to any payment mechanisms other than cash. Accepting cash in
envelopes for Facebook points would not scale very well. However, many
game companies have been successful in getting their branded prepaid
cards distributed at retail. This is one way of turning user’s cash
into a payment mechanism that can be used online. Facebook has the
brand awareness to do the same thing by striking deals directly with
the two biggest distributors of prepaid cards, Incomm and Blackhawk. Alternatively, if they did not want to deal with retailers directly, a company like GMG Entertainment could handle it for them.
However, some users don’t have any money at all to spend on gift credits. $uperRewards and MyOfferPal have
found one way to reach this market, through incentive offers. These
companies allow users to trade their attention (through filling out
market research surveys, applying for credit cards, getting a free
trial of a service, signing up for email newsletters or other
activities) for virtual currency. They take the bounty paid by the
company acquiring the user, and use some of that to buy the user their
virtual currency. Facebook could enable users to buy gift credits with
incentive offers.
The combination of these tactics to increase Means to buy digital
goods could provide an additional lift of 50-100% in digital gifts
revenue.
What other ideas do readers have?
Tomorrow we’ll discuss the last, and arguably most important factor, Motive
(For more from Jeremy Liew, visit his blog)
(Image source:
