The company claims that through other channels, such as newly-signed online community Meez, it has served two billion — yes, 2,000,000,000 — virtual goods ads to Web pages since the company began operations in 2008.
To send a virtual good from Facebook, a member usually begins by clicking on a branded virtual good — such as Malibu Rum — in the catalog of one of Facebook’s well-known applications. They then select an image of the item and a recipient for the message.
The recipient sees, for example, a postcard-like image from Malibu Rum with a photo of their friend expertly worked into its center to look like a professionally-made card. The immediate goal of these virtual goods isn’t to induce a purchase on the spot, but to raise what marketers call “purchase intent,” the likelihood that the recipient will seriously consider buying Malibu Rum next time he or she hits the liquor store.
For every Internet grumpus who hates it that the Internet is now overrun by these brand campaigns, there seem to be many more who love them. AdNectar cites stats that say virtual-goods senders prefer branded gifts — that is, Nestlé’s Toll House rather than just “chocolate chip cookies,” by a factor of ten to one. Overall, the company claims that branded-goods senders spend 20 percent more time on the sites that host them.
“They are interesting content for their users,” AdNectar’s vice president of marketing, Paul Martecchini, told me in an email. “Big brands have jumped on board, like Nestle, 3M, Pernod Ricard, Warner Bros, and Gillette.”
Moreover, he said, “Gifts sent between friends are endorsed and, therefore, trusted” compared to the impersonal — albeit highly targeted — walls of ads that pack the pages of increasingly desperate websites.
One reasons advertisers are willing to test the genre: The virtual goods market is far easier to measure than its real-world counterparts. It’s no work at all to report that, say, 4,301 Nestlé fans uploaded photos of themselves baking and/or sharing cookies, outrunning the 3,513 who posted shots of themselves relaxing on an imaginary Malibu Rum island. AdNectar counted 62 million unique visitors in its most recent monthly tally, of which the company is pretty sure about 40 million were Americans.
The results are measurable, too. Standard consumer surveys found that the Malibu Rum ad lifted brand favorability — how positively both senders and recipients feel about Malibu — by nine percent. The Nestlé campaign boosted purchase intent an impressive 17 percent. From those statistics, brand managers can forecast future sales.
AdNectar was founded in Palo Alto, Calif., in early 2008. The company has scrimped by on a seed round of angel funding. Industry watchers cite New York-based Appssavvy as a competitor, but the real threat is that with billions of virtual cookies flying around, Facebook and other large sites will try to muscle in on the action for themselves.