More articles by James Burrows
Fitting Virtual Currency Into Loyalty-Based Advertising
ADOTAS – Advertisers are always looking for the secret recipe that results in consumer engagement and actual purchasing decisions. Brands that cook together virtual currency rewards into loyalty-based advertising can achieve both goals if used properly.
So how do you fit a virtual currency model into loyalty-based advertising? It could be as simple as the classic carrot and stick method of reward motivation. But with more carrot, and virtually no stick. As the reward mechanism for a customer action, you use a reward that has a redemption value that is hyper-specific to the customer.
Any time you have a vehicle to motivate consumers into making a decision, you have a very powerful branding and performance-based marketing tool. Compared to search which is usually immediate yet disposable and transient, a currency and redemption mix brings longer-lasting brand loyalty and that sense of personal engagement. That’s the key point and key value of virtual currency. The carrot is there to motivate behavior, not to forcefully push the consumer into making decisions where they do not have 100 percent buy-in.
There are many advertising models available to both publishers and brands. Some methods might give the consumer the illusion of control, the sense that they are pulling the puppet strings. With a virtual currency and redemption advertising model, there are no strings. The user has a vast variety of redemption options to choose from, giving them real control and a clear sense of how their time and engagement translates into a tangible reward.
Some users might choose a narrow path with a reward such as earning FarmVille Gold while playing on Zynga. Others might join a program that allows the earning of broader virtual currency that is usable for a variety of redemption programs that are only relevant to the individual user. With either path, the consumer has a level of buy-in to earning the reward.
How should brands go about implementing a virtual currency offer to their consumers? Brand managers need to first use a customer’s profile and other personal data to uncover background data for insight into which redemption offer should be offered. Finding the best offer to match with the right virtual currency reward is best done by a specialist in the industry. Unlike a search account which can be setup and tweaked within an hour, an creating an effective virtual currency requires some investment, which should be paid back quickly with higher ROI.
What are the caveats to the virtual currency approach? Advertisers need to first set out exactly what they want offers to achieve. Stated and measurable goals are the bedrock. The key is for advertisers to be absolutely sure the value of the virtual currency being rewarded is 100 percent aligned with their advertising goals, otherwise it simply doesn’t make financial sense or ensure quality.
Let’s throw out an example. You have an insurance industry giant that is looking to build some leads. So they produce some offers to a highly targeted permission-based audience to generate some quality leads for their sales team. Sounds pretty straightforward, right?
The key for this insurer is to reward on a much lower scale those customers that simply engage with the ad, compared to the virtual currency they present to consumers who sign up for more information or actually make a purchase. You don’t always treat all customers equally with rewards.
Keep in mind the end goal at all times and remember virtual currency works best when customers can transparently see their engagement and action translating directly into rewards.
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