10 Tips for Monetizing Social Traffic Through Virtual Currency

This is a guest post by Anu Shukla, CEO of Offerpal Media. Offerpal Media is a leading “managed offer platform” for social applications, virtual worlds, games, and community-oriented websites.

The Opportunity

A new boon is taking place on the Internet. For community-oriented web publishers like social networks, social applications, virtual worlds, MMOGs and other social properties on which traditional advertising has produced such little revenue per user relative to other sites, a new market, led by the proliferation of virtual currency and virtual goods, is rapidly expanding.

No one knows yet the exact size or potential of the market, though even conservative estimates put it at well over $2 billion.

What’s behind the boon? A confluence of factors. Social publishers, forced by necessity to find creative ways of monetizing their traffic, discovered that virtual currency and virtual goods are the most effective way to monetize traffic on their properties. At the same time, infrastructures for virtual currency were becoming more common, and consumers were becoming more comfortable with the whole concept of a virtual economy.

Today, there’s little doubt that virtual currency is the most effective way for social web publishers to monetize their traffic. Drawing from case studies, I have highlighted 10 tips to show how you can successfully integrate virtual goods and services into the overall user experience.

10 Tips for Monetizing Social Traffic through Virtual Currency

1. Understand Your Users’ Motivations

A virtual economy is much like a real economy in that it is driven by human psychology and human motivations including greed, ambition, curiosity, power, a sense of belonging, and others. When creating a virtual economy, it is important to understand which motivation or motivations your economy is addressing. Does it help users satisfy their destructive urges, the way “killing” games like Vampires or its sister-apps Zombies and Werewolves do? Does it give users a sense of belonging and connection, the way Friends For Sale! does? Knowledge of who your audience is from a demographic, psychographic and behavioristic viewpoint is essential for building a vibrant virtual economy.

2. Create Multiple Methods for Users to Earn Virtual Currency

Before your users can spend any virtual currency, they’ll first need to earn it. Some users are willing to simply pull out their credit card and pay real dollars in exchange for virtual ones. For those users you’ll want to offer PayPal or similar credit card options (just be sure to be prepared to also offer customer service, fraud prevention, chargeback handling, technical integration and other supporting efforts if you’re going to integrate with these service providers directly. Platforms like Offerpal Media remove all of these headaches for you). But a majority of users will want other options as well. The method that generates the highest revenue is allowing users to complete targeted, relevant advertising offers in exchange for virtual currency.

3. Sell “Decorative” Virtual Goods

Decorative virtual goods allow users to express their individual personalities. WeeWorld.com, where users get to dress up their avatars to reflect their online personas, is a perfect example of users spending their virtual currency on decorative items geared towards self-expression. Just as clothes, accessories, gadgets and other personal belongings are symbols of self expression in the real world, so too are their virtual counterparts, and people are just as inclined – if not more so – to decorate their avatars, profiles and backgrounds with personalized items as they are to dress themselves up in items that express their individuality.

4. Sell “Functional” Virtual Goods

A second type of virtual good is known as “functional” goods, or those that have an impact on the user experience. These goods are most prevalent in MMOGs such as Mobsters, in which users redeem virtual currency for goods or services that confer some kind of advantage, in this case more territory or more mob members. They are “functional” in the sense that they help advance the game or user experience.