As the New York Times reported last week, brands such as Volvo, H&M and MTV Networks are entering the virtual goods market. Virtual goods are non-physical products that people buy for use in online communities or games. They usually cost a dollar or two and might be a gift like a bouquet of flowers or an item that people can purchase in games like Farmville that give players an edge over their competitors.
Brands hope to use virtual goods to keep in touch with their consumers and also use the goods to soak up any discretionary spending especially among the web-savvy under-40 crowd. The reason for their interest is not surprising. Analysts agree that the virtual goods market will be worth over $2 billion this year.
This is just one way that brands are responding to a very real challenge – how to make themselves relevant, sharable and likable within the social ecosystem.
Yet launching virtual goods is only half a solution. The currency that people trade across social networks in not money but emotion. As such, merely selling virtual goods will do little to achieve the emotional connection that brands need over the long term.
For that to happen, brands must ask themselves what is their priority? Are they merely after another slice of the consumer pocketbook? Or are they genuinely interested in the community and want to build it over the long term?
The most powerful way for brands to do the latter is through shared values. That is why virtual goods connected to a cause or initiative that reinforces the core values of a brand is great marketing and an effective way to forge an emotional connection with a community. A good example is how game maker Zynga recently used virtual goods to aid victims of the earthquake in Haiti.
Brands would be wise to consider the rules of social media engagement before treating social games as a gold rush. If they are only interested in profit, brands will quickly learn that gamers don’t play by their rules. But if their motives are transparent and their ad agencies help them to connect emotionally, this new trend could be incredibly beneficial for themselves, their community and the well being of others.
Do you think brands should start selling virtual goods? Or do you think that will ruin their experience within social games?
Reading Time: 1 minutesSimon Mainwaring is the founder of We First, a leading brand consultancy that provides purpose-driven strategy, content, and training that empowers companies to lead business, shape culture, and better our world.