Paying with Personal Information: An Emerging Trend of Currency Monetization in the Virtual Economy
Virtual currency has emerged as the lifeblood of online games, social networks, and virtual communities. In order to subsidize development and recurring operating costs, currency demand needed to be created to ensure the financial stability and longevity of the projects. Web properties needed a value system that was both stable and flexible. It needed to cater to people of all income levels. Selling “credits” in a marketplace for limited virtual goods emerged as the most viable solution to this necessity. By providing numerous methods of attainment, players could choose how they spent their personal resources (time and money) in their pursuit of the accumulation of credits.
This emerging advertising model shifted the cost of credits from players to advertisers without compromising the virtual economy. The money flowed from the advertiser through to the site owner, while the virtual credits flowed from the site owner to the player. This complex transaction needed additional technological components in order to automate the transactions, create a critical mass, and increase the likelihood of return player participation. The transaction also needed multiple layers of security and fraud prevention in order to protect the integrity of the information and credit exchange.
The demand for a transaction clearing house created an opportunity in the marketplace for technologically advanced advertising networks that could innovate around the needs of the site owners, advertisers, and users. While having one player, in one country, participating in one advertiser offer, and being rewarded one credit, is the simplest form of the transaction, complexity emerges when thousands of players from every country are interacting with hundreds of offers at the same time. This complexity grows further when the player demand for daily new offers is high. The technological intricacy to not only facilitate multiple simultaneous transactions, but also add additional components such as complex security layers, geographical user targeting, advanced reporting features, interface customization, and real-time monitoring created a new industry dedicated to ensuring the long-term success of this emerging monetization methodology.
Martin King, CIO and Chief Scientist of Blvd Media Group (www.blvd-media.com) was the architect of the next generation, virtual currency monetization system called the rewardTool. He recognized that the user experience was as important as the transactional operations and the security. His vision was to create an interface that satisfied the extensive needs of advertisers and site owners, but more importantly, provided a game-like feel for users. The importance of providing a visually appealing connection point for users to interact with advertiser offers was seen as a key differentiator and a way to dramatically increase user participation and the quality of information provided to advertisers.
“It is paramount that companies like ours remain focused on the user experience, particularly as it pertains to online virtual worlds. Massively Multiplayer Online Role Playing Games are immersive and to that end, Blvd Media intends to complement, not confuse, the virtual landscape.” says King, whose company has seen double-digit growth every month since the launch of the rewardTool in May, 2009. “I believe that we will see free-to-play marketplaces grow exponentially — especially in today’s economic climate. Inasmuch as the Internet strives to shrink the world, the reality is that a global marketplace has to prepare for, and ultimately behave as though, the Internet is a very big place. Regrettably, there are nuances to being a global technology company, and sometimes those nuances get lost. This is where Blvd Media lives; it is our belief that there is no “owning” the space, but rather we must develop the space… relentlessly.”
Virtual currency has proven to be a universal incentive to consumers in all countries. Advertisers have embraced this model by spending over six billion dollars a year on the acquisition of user data. As new and more advanced games, social networks, and virtual worlds are developed, this spending trend is expected to remain steady. Users continue to earn credits and enjoy the premium site experience at the expense of advertisers. This model subsidizes user spending and justifies the development of more advanced web properties.
Ironically, the companies that will ultimately endure will develop relationships with advertisers, aggregators, and networks around the globe looking for the particular information each locality has to offer. In a way, this will end up being a viral movement, not sparked by the advertiser – but rather by the player, or digital persona, or perhaps even the trends, in an entirely alternate, digital universe. After all, where there is a demand, supply will be identified and commerce will be created.
Kevin Golob worked on the project that first launched advertiser supported virtual currency monetization systems into multi-player online games and virtual worlds. He then worked on the bringing a new method of monetization to premium content websites throughout the world. His background in business development combined with his passion for writing, entrepreneurship and assisting others to succeed has driven him to become advocate for all businesses trying to innovate in this space.
