18 November 2008 - 17:40E-gifts, AdNectar and Social Networking

Brands who want to get the attention of social network site users need to think beyond the usual banner ads and widgets.

While those types of ads can work if they are creative and carefully targeted, in general we’re finding that interruptive advertising on social sites just isn’t as effective as marketing messages delivered in a format that dovetails with the things that people are doing on social sites — interacting with their friends and colleges.

One of the most interesting and measurably successful new ways for brands to connect with social network users is virtual goods, also known as e-gifts. It’s a business model that’s just starting to hit its stride in the US and Europe and is already a key business model in Asia. According to a recent article in BusinessWeek “Two-thirds of the $523 million in sales by China’s Tencent social sites comes from virtual goods such as pets; only 13% is from advertising.”

The BusinessWeek article Lucrative Alternatives to Online Advertising went on to note that “Virtual goods (also known as ‘e-gifts’) are a better fit than traditional advertising on socially oriented sites… That’s because ads are more distracting than alluring on sites where people are there to interact with one another rather than surf for information or products. By contrast, virtual goods are essentially social artifacts that people use to gain status among online peers.”

Some of us at CreativeFeed have been interested in the potentials of the e-gift/virtual goods concept for a while now — we’ve worked with coders who have developed outstanding virtual good apps for the iPhone but hadn’t found an e-gifts platform that we felt answered all of a brand’s needs for marketing use.

So we were fascinated recently when a prospective client, AdNectar, told us about their service. AdNectar makes it easy for brands to transform their message into unique e-gifts (digital images of a brand’s product or logo) — social networkers could send, for example, Godiva chocolate to a friend who is having a rough day, a bottle of Veuve Clicquot to congratulate a colleague on a job well done, a pair of strappy Manolo Blahniks to one’s best girlfriends just because … and so on.

But that’s not all — with AdNectar brands can use a single piece of marketing collateral to reach all of the most popular social media sites — including dating, gaming sites and social networks like Facebook, Gaia, and MySpace. AdNectar e-gifts can easily be converted into real merchandise through coupons and giftcards, and AdNectar provides complete metrics and campaign reporting and actionable business intelligence. (No wonder AdNectar is the only startup to receive venture capital backing right out of Stanford Business School.)

We’re very pleased to announce that AdNectar has now signed on with CreativeFeed and we look forward to sharing this innovative marketing solution with brands that are looking for an effective, quick and cost-effective way to leverage the power of social media and achieve outstanding ROI. Email us if you want to know more about AdNectar and e-gifts.