Little Gift, Big Lift: Virtual Goods Prove to be a Highly-Effective Ad Medium

AdOperationsOnlineAdNectar Releases First of its Kind Study by Vizu Revealing Virtual Gifts are the Most Effective Way to Market to Social Networking Audiences
PALO ALTO, Calif. – March 9, 2009 – AdNectar, a pioneer in customized social gifting and branded virtual goods campaigns, released a whitepaper today that combines third-party and company data making a compelling case for why virtual goods may be the most effective form of advertising on social networks to date.

As the advertising industry tries to tap the growing number of people using social networks such as Facebook and MySpace, the answer may lie in a little box of Godiva chocolates. This is no ordinary box of bonbons. Although it has aroused the appetites of millions of people, it can never be eaten. Its ingredients do not consist of cocoa or milk, but of bits of code. This box of Godiva chocolates exists only on the Internet and was recently promoted by the famous chocolatier as part of a recent campaign through AdNectar.

Increasing Purchase Intent and Click-Through Rates

Recent studies conducted by an online brand ad metrics company, Vizu, show that AdNectar’s campaigns are truly paying off for brands using sponsored virtual items as marketing messages.  The company’s research shows that branded social gifts increased purchase intent, awareness and engagement while actually improving the user’s experience.  “Our study showed that AdNectar’s social gifting ad approach clearly drove purchase intent,” said Dan Beltramo, CEO of Vizu.

In the Godiva study, those exposed to the AdNectar’s virtual chocolate were 20 percent more likely to purchase a real box of Godiva in the next six months than the control group that was not exposed.  This is particularly notable since most purchase intent studies of online campaigns barely break 2 percent lift according to Dynamic Logic, a leading advertising effectiveness company.

Effectively branding virtual items is not limited to well-known chocolate companies.  Method, a leading brand of eco-friendly home care products, recently launched a virtual goods campaign with AdNectar.  The results were even more impressive.
“Our campaign achieved a more than 60 percent lift in purchase intent,” said Gunther Lie, director of interactive marketing at Method. “AdNectar was very effective in driving traffic to our Facebook fan page as well as increasing awareness of the brand through the viral spread of our sponsored virtual items.”

According to AdNectar, the average click-through rate for its campaigns hovers around 0.8 percent and can reach up to 8 percent.  These clicks are generated by a hypertext link below the virtual item which directs users to the sponsor’s site of choice such as a landing page, home page or a pop-up video.  This CTR is significantly higher than the typical rates found on Facebook, which are in the range of 0.04 percent.

Preferred by User

Nir Eyal, CEO of AdNectar, believes the high purchase intent and click-through rates are a result of “user-generated targeting.”  Eyal said, “The users always know more than the marketer about what they and their friends like.  Virtual items let the users find our target audience for us.”  It is likely, for example, that a user, who voluntarily sends a virtual Sunkist soda (a recent AdNectar client) to another user, knows something about the person he or she is sending the virtual fizz to.  Eyal explains, “It is likely that the sender knows that the person being sent the virtual item, enjoys soda, loves the brand, or loves orangey goodness.  In any case, that’s a target customer for our client and is something you just can’t do with a traditional banner ad.  The best part is, it’s all voluntary.  The user chooses to send the virtual item because they enjoy doing so.  That’s why the AdNectar motto is ‘advertising people appreciate.’”

Virtual Goods Reach Tens of Millions Daily

Apparently, lots of users appreciate virtual items.  AdNectar reaches 50 million monthly unique users through its network of application partners and has agreements in place with 6 of the top 15 applications on Facebook.  The company believes virtual items are no longer a niche offering and estimates that 5 million virtual items are exchanged on Facebook every day, 90 percent of which are within the applications built on the social networks.
“Virtual items have become mainstream and are integral to many of the top social media applications,” said Eyal. “Users have come to expect them as a part of the social networking experience and they seek out better ways to communicate with friends.  AdNectar simply replaces what is are generally generic offerings, with branded virtual items that add to the user’s enjoyment while driving awareness and sales for advertisers.”

About AdNectar
AdNectar specializes in creating effective advertising that consumers appreciate.  By associating brands with virtual items, marketers are able to insert their brand message directly into the social media experiences.  AdNectar provides an integrated advertising platform that is more enjoyable for users, more effective for marketers and more profitable for publishers.  Headquartered in Palo Alto, CA, AdNectar is backed by highly regarded private and institutional investors including Battery Ventures.  For more information, visit  Please direct media inquires for AdNectar to:  Nir Eyal, [email protected], 917.279.8578

About Godiva Chocolatier

With production facilities in Belgium and the U.S., Godiva Chocolatier is recognized around the world as the leader in fine chocolates. From its famous truffles and shell-molded chocolate pieces to its European-style biscuits, gourmet coffees and hot cocoa, Godiva Chocolatier is dedicated to 75 years of excellence and innovation in the Belgian tradition.   Please direct media inquires for Godiva to:  Alison Brod Public Relations, Alana Radmin / Ellen Fobes, [email protected] / [email protected], 212.230.1800

About Method

Founded in 2000, method is headquartered in San Francisco, California. Today, method is the leading innovator of premium healthy home and personal care products. Method can be found in over 25,000 retail locations throughout the US, Canada, the UK and Australia. Major retailers include Target, Wegman’s, Costco, Duane Reade, Safeway, Waitrose (UK), Shopper’s Drug Mart (Canada) and Woolworths (Australia). method is a privately held company backed by high net worth individuals and a private equity firm.  Please direct media inquires for method to:  Rachel Goldberg, method public relations, [email protected], 415.746.1764

About Vizu

Vizu is the leading online brand advertising measurement system. Their Ad Catalyst real-time measurement infrastructure for assessing ad campaign effectiveness provides powerful benefits for publishers and advertisers. Through the use of Ad Catalyst, clients gain actionable Brand Lift data on their online advertising campaigns, giving them a powerful advertising ROI metric. Vizu is a privately-held company based in San Francisco, CA, with backing from leading venture capital firms Draper Fisher Jurvetson and Greycroft Partners. For more information visit:  Please direct media inquires for Vizu to:  Ben Heskett, [email protected], 415.362.8498 ext 17.