Ifeelgoods showing brands the perk of virtual goods

Companies learning the value in offering digital credits to engage consumers, save inventory costs

Global brands are well-versed in creating sales campaigns that draw in new business by enticing consumers with 25% off discounts and buy-one-get-one-free offers, but one company has been educating brands about the benefits of offering digital credits rather than slashing prices.

Ifeelgoods has been working with big brand names such as Universal Pictures, Gap and 1800Flowers to offer digital credits, such as those used on Facebook for social games and renting movies, to encourage shoppers to participate in particular campaigns.

The one-year-old Menlo Park-based company recently launched a marketing campaign with Universal Pictures for the release of the movie 'Tower Heist' and worked together to give away one million digital credits when participants completed different social tasks such as 'liking' the movie page, sharing stories on the wall and playing games and trivia portions.

Scott Silverman, co-founder of Ifeelgoods, explained to me the benefits of using digital credits for an advertising or marketing campaign.

"People attach an emotional value to digital credits that get them more time or interaction with a game or online application," said Silverman. "And so the consumer is getting something they value and it is a lower cost to the company buying these digital credit options en mass."

Currently, Ifeelgoods has more than 50 clients that have run digital credits campaigns as part of their marketing and works with several digital goods providers such as Facebook, Skype and Starbucks.

Ifeelgoods has built its business model on receiving a commission based upon the amount of participation gained in each campaign it spearheads.

But the young company, that has received $9 million in funding, still has some challenges in educating companies about the benefits of offering virtual goods rather than a physical perk.

"We have to show these companies, not just the difference in bottom-line costs to their inventory, but also explain the market that these credits attract," Silverman told me. "The social gaming market is greatly made up of 43-year-old women that are in charge of household spending and are deeply committed to these virtual interactions and worlds that they build."

Silverman has seen that the campaigns that clearly promote Facebook credits as perks are getting three to five times more click throughs and interactions than those offering more traditional discounts.
Ifeelgoods has noticed that companies are just now prepared to evolve into the benefits of digital perks and goods.

And this type of promotion can also benefit the industry of social gaming that is always looking for ways to monetize and increase interactions with the large percentage of users that do not pay for credits (for most social games 94-95% of users are on the free side of freemium) and many of them could be capturing and using these credits.

Whether the virtual goods were gifted by a brand or paid out of pocket, they reach the social gaming companies the same and some gaming companies would hope that if free users get familiar with the perks of credits, they might be more likely to purchase some out of pocket later.

While offering virtual goods is often part of a social strategy for companies (by building social networking followers and interaction) Silverman likes to remind companies that these campaigns are really just a new sales and marketing strategy that social media has made more effective.