Duncan Alney Presentation


Published on

Published in: Technology, Economy & Finance
1 Like
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Duncan Alney Presentation

  1. 1. Facebook Credits & Social Video Grant Crowell , Reel SEO Duncan Alney , Firebelly Marketing
  2. 2. What Is “Virtual Currency?”
  3. 3. Virtual currency is another way of describing “electronic money” It is used to purchase virtual goods within a variety of online communities; which include social networking websites, virtual worlds and online gaming sites
  4. 4. What Are “Virtual Goods?”
  5. 5. <ul><li>Virtual goods are non-physical objects purchased for use in online communities or online games. </li></ul><ul><li>Virtual goods have no intrinsic value and, by definition, are intangible. </li></ul>
  6. 6. <ul><li>A large majority of the sale of virtual goods has been in Asia. (70% as of 2010.) </li></ul><ul><li>Many online games now derive their revenue from the sale of virtual goods. </li></ul><ul><li>In 2009, $7.3 billion was made from virtual goods sold worldwide. </li></ul><ul><li>$1 billion of that was made from the </li></ul><ul><li>sale of virtual goods played on </li></ul><ul><li>social networks such as Facebook . </li></ul>“ Virtual Goods” Trends
  7. 7. and in 2014, reach $14 billion according to a different analyst. $ $ $ That figure was estimated as 1.6 billion in 2010. 2013 sales will be $4 billion according to one analyst,
  8. 8. What are “Facebook Credits?”
  9. 9. <ul><li>Facebook Credits were introduced in 2010 as a virtual currency you can use to buy virtual goods in many games and apps on the Facebook platform. </li></ul>
  10. 10. Why has Facebook launched “Credits”
  11. 11. <ul><li>- Generate additional revenue streams beyond advertising </li></ul><ul><li>Gather data on users including browsing & shopping activity </li></ul><ul><li>Have “virtual game economy” with developer revenue stream </li></ul>
  12. 12. How do “Facebook Credits” work?
  13. 13. <ul><li>Facebook redeems credits at the rate of $0.10 per credit. </li></ul><ul><li>Purchase Facebook Credits through the Payments tab in your Facebook account settings, or you can buy a gift card at many retail stores like Target, Walmart and Best Buy, or get credits through social promotions. </li></ul><ul><li>You can also purchase credits within many of the games themselves and some of the video apps on Facebook. </li></ul><ul><li>After making an initial payment, you are able buy Facebook Credits and get back to your games or other Facebook Credit-related activity very quickly. </li></ul>
  14. 14. Who’s using “Facebook Credits?”
  15. 15. Developers <ul><li>Creating a platform, service or product and gaining FB credits from their use. </li></ul>
  16. 16. Social game developers can provide a reward system into their games for users who engage in a certain type and degree of activity. “ Most leading developers have already integrated Credits as the only way of paying using credit cards ” – Inside Social Games , January 11, 2011
  17. 17. Marketers <ul><li>Incentivize users to participate in a special promotion – </li></ul><ul><li>Watch a video ad inside of a social game online, or other content. </li></ul><ul><li>Take a survey </li></ul><ul><li>Rewards for fans who watch your videos. </li></ul><ul><ul><li>(Why pay an ad network or other middleman for views you can pay the consumer directly?) </li></ul></ul><ul><li>Other </li></ul>
  18. 18. Outside of Facebook <ul><li>4loot.com - A search engine like Google, only every day you use it you gain coins which you can convert FB credits. (If you have your friends join, you can win coins when they win.) </li></ul>
  19. 19. Why should we care?
  20. 20. <ul><li>July 1 st , 2011, FB Credits becomes the exclusive payment system in all FB-hosted social games </li></ul><ul><li>“ Facebook has steadily worked to make Credits the only payments option on its platform.” – Inside Social Games. </li></ul><ul><li>FB Credits has already achieved considerable traction as a virtual currency. </li></ul><ul><li>FB Credits will only gain more momentum. It will continue its penetration into mass retail chains such as Target, Best Buy and Walmart. </li></ul>
  21. 21. <ul><li>“ Paying consumers in FB credits seems a viable way to get them to engage with certain types of branded content </li></ul><ul><li>“ Gamers who are already invested in the FB Credits ecosystem will probably appreciate the opportunity to earn a few extra credits for watching an ad. And; </li></ul><ul><li>“ FB might even draw some new users to social games on the promise of credits for ad views.” </li></ul>– eMarketer
  22. 22. Why is Facebook paying users to watch ads? Facebook is hoping to grow the use of Facebook Credits, if only by 3 to 5 percent - Business Insider Facebook is hoping the new incentive-driven model will remedy its categorically low click-through rates on banner ads - AdWeek
  23. 23. Forecasts
  24. 24. <ul><li>Virtual Currency News – </li></ul><ul><li>“ Facebook Credits poised for a massive 2011.” </li></ul><ul><li>– Nov 15, 2010 </li></ul>
  25. 25. Facebook Credits will become the mandatory payment method for third party app developers on the social network on July 1, positioning the virtual currency for explosive growth. This growth will likely be driven in great part by daily active players of social games, who now comprise well over 150 million users Source: Mediabistro.com latest Facebook research reports entitled Facebook Credits: Deployment Strategies in Facebook Games and Facebook Ad Networks: A Guide to Monetizing Facebook Games & Apps.
  26. 26. Challenges for Facebook Credits
  27. 27. Facebook’s 30% Share will deter many game developers <ul><li>Facebook takes a 30% cut of the developer ’s share of the transaction, making it more akin to Apple’s and Amazon’s share of content sold on their digital storefronts than a purely transactional system such as PayPal. </li></ul><ul><li>Given that dynamic, the penetration of FB Credits will be limited by the number of developers (esp. game publishers) who decide to go along with this system. Many have already signed on but a large contingent of smaller and mid-sized players have expressed strong objections to the size of FB ’s share. </li></ul>
  28. 28. Are consumers interested? <ul><li>- Tedious way for users to gain credits </li></ul><ul><li>- Requires a lot of their continual time </li></ul><ul><li>- Limited uses for earning something of value. </li></ul>
  29. 29. Virtual Goods have a limited appeal <ul><li>No plans from FB yet on allowing credits for use of purchases on real goods or services (note: other than movies, videos, and online content) </li></ul><ul><li>- No plans announced by developers for real currency integration </li></ul><ul><li>- No plans for real currency integration by regular retail/ecommerce vendors either </li></ul>
  30. 30. Consumer Watchdog files anti-trust violation against Facebook - Consumer Watchdog, a nonprofit consumer advocacy group, has filed a complaint, with the Federal Trade Commission accusing Facebook's virtual currency system of anti-competitive behavior. - The complaint asks that the FTC issue an injunction stopping Facebook from continuing its behavior and that it investigate Facebook's relationship with social gaming giant Zynga.
  31. 31. New Marketing Uses for Facebook Credits
  32. 32. <ul><li>Virtual - to-real credit transactions : Brands take the lead in allowing X amount of Credits for real-world purchases on their own FB eCommerce store. </li></ul><ul><li>Education – Improving Education through incentivized social gaming. FB Credits could be used as an incentive and reward system for finishing homework, extra credit, extra assignments, etc. </li></ul><ul><li>Cause marketing – social gaming w/ video towards social change. </li></ul>
  33. 33. Marketing Shifts point to video
  34. 34. <ul><li>“ For many businesses, having a branded Facebook page has become a near-essential part of their marketing arsenal. In the year since Facebook began encouraging businesses to deploy the thumbs-up button across the web, brands have been racing to rack up “likes.” </li></ul><ul><li>To be successful in this post- “like” phase of Facebook marketing, companies will need to excite their fanbase with compelling posts, interactions that spur a sense of community, and rewards for their ongoing support. Brands that do not make Facebook marketing a priority will risk seeing their hard-earned “likes” churn away.” </li></ul><ul><li>Source: Grant Crowell’s interview with Paul Verna, eMarketer, senior analyst </li></ul>Going Beyond “Likes”
  35. 35. Why Video?
  36. 36. <ul><li>Video is the most shared media online. </li></ul><ul><li>Consumers are creating video more rapidly today than at any other time in recorded history, and is ideally suited for the social media space </li></ul>
  37. 37. <ul><li>Audience  – Facebook is the 2nd largest trafficked website, with over 600 million active users </li></ul><ul><li>Referrals  – Facebook is the 2nd largest referral source for video </li></ul><ul><li>Mobile  – 150 million active users take Facebook with them everywhere they go. </li></ul><ul><li>Time  – Many people spend a lot more time on Facebook than on Google </li></ul><ul><li>Versatility  – Many video formats are supported for uploading </li></ul>10 Reasons To Use Video Marketing on Facebook
  38. 38. <ul><li>Length  – Facebook allows up to 20 minutes, 5 minutes more than YouTube </li></ul><ul><li>Connectivity - wide range of sharing features & engagement opportunities. </li></ul><ul><li>Search Engine Visibility  – Facebook videos are visible within Google Search. </li></ul><ul><li>SMO  (Social Media Optimization) – Excellent keyword encoding (aka, “tagging”) capabilities. </li></ul><ul><li>Conversions  – Hot triggers around the video for taking an intended action </li></ul>10 Reasons To Use Video Marketing on Facebook
  39. 39. Facebook is the fastest-growing site for video sharing. MySpace is dying. Online retailers are bringing video to the social web through a suite of tools focused on broadening video's impact while connecting it directly to revenue.
  40. 40. Use video to build conversation & community
  41. 42. What Is Social Video?
  42. 43. Social video gains focused attention , which gradually increases over time. They’re dependent around the value of the human-based conversation that develops around them Social video is based on trusting the source and the message, must be transparent and authentic . It shares not just content, but communication .
  43. 44. Social Video Platforms will help adoption <ul><li>Liveclicker launches social video platform </li></ul><ul><li>Allows consumers and Facebook friends to post interactive videos directly to their own pages to create the ultimate social shopping experience. </li></ul><ul><li>Includes delivering interactive video experiences throughout Facebook and onto their websites. </li></ul><ul><li>Interactive videos are easily shared and commented on. Customers receive guidance and feedback from their Facebook friends, creating an interactive and fun social shopping experience while driving social traffic back to your main website. </li></ul>
  44. 45. Commerce on Facebook Fan Pages <ul><li>“ Integrate your entire Liveclicker interactive video library with your Facebook Pages through the Liveclicker-pioneered videos tab.” </li></ul><ul><li>How-to videos placed on Facebook (Business) Fan Pages. All examples feature the Liveclicker video technology platform. They feature the “share” and “buy now”/”shop” buttons, and you can sometimes browse, shop, and buy other products right within the video player. </li></ul><ul><li>Examples include: Advance Auto Parts, OnlineShoes.com, eBags, Vitamin Shoppe </li></ul>
  45. 46. Retail / Ecommerce Examples
  46. 52. Music Industry Examples
  47. 53. <ul><li>Musicians have begun allowing fans to exchange Facebook Credits for access to pay-per-view streams of concerts, at a standard price of 50 credits, or 5 dollars, per show. </li></ul><ul><li>The hook is access to premium “entertainment” content and value </li></ul><ul><li>New revenue stream with built in audience despite the 30% cut </li></ul>
  48. 55. Widespread Panic live on Facebook - 2 day concert in Mid-June utilized Milyoni live event plaftorm- - All purchased tickets to attend the first Social Theater concert on the Facebook platform  - 2,300 tuned in across 19 countries and all used Facebook Credits - The average concert attendee was 33, with 75% male and the remainder female - More than 19 countries, including the United Kingdom, South Korea, Australia, Germany, Brazil, and South Africa - The music group increased Fan followers by 20,000. Austin City Limits' Facebook Fan base grew by 40%. Source: MediaPost
  49. 56. Brand Marketing Examples
  50. 57. Clorox <ul><li>Users watch an ad in its entirety, and their receive FB credits in exchange. </li></ul>
  51. 58. Facebook Commenting In Videos <ul><li>“ Integrate Facebook video comments on your brand's own site and product pages so consumers see what Facebook users have to say about your product. ” </li></ul>
  52. 59. Movie Examples
  53. 60. Warner Brothers Movie Rentals <ul><li>In March, Warner Bros. launched a service allowing Facebook users to rent and stream popular movies, using Facebook credits as a form of payment. </li></ul><ul><li>Most movies are 30 credits, or 3 dollars each, and can be launched from their respective fan pages. </li></ul>
  54. 63. Unanswered Questions <ul><li>Are Facebook Credits a real opportunity for more businesses than just social games? </li></ul><ul><li>Are Facebook Credits really the right incentive? </li></ul><ul><li>Do Facebook Credits really qualify customers? </li></ul><ul><li>Is Facebook really suited for video commerce? </li></ul><ul><li>Will Facebook Credits ever be used for real currency? What will it take for that to happen? </li></ul><ul><li>Is social video commerce a viable strategy for Facebook Credits? </li></ul><ul><li>Are Facebook credits a violation of anti-trust laws? </li></ul>
  55. 64. Grant Crowell Grant Crowell is the senior media analyst, podcast show host, video interviewer vlogger for ReelSEO.com – the #1 online magazine dedicated to the business, culture, and technology of online video. [email_address] Duncan Alney Duncan Alney is the vision behind Firebelly Marketing and a nationally recognized social media provocateur who speaks across the country. [email_address] Follow on twitter: @firebelly