Are Virtual Goods The Next Frontier For Brands?

Brands have already done a fine job of working their way into every aspect of our real world. You’ll find brand advertising pretty much everywhere you look, offline and online. Every communications medium is peppered with brand ads. Less obvious forms of brand advertising, such as product placements in television shows and movies, are commonplace.

Now, it seems, brands would like to play a role in virtual worlds in much the same way. Big brands – H&M stores, MTV Networks, and Volvo Cars, to name a few, are testing “virtual merchandise” in social games to see if it will generate brand awareness, according to a recent article in the New York Times.

H&M and Volvo are both running campaigns on MyTown. In case you’re not a follower of iPhone apps, MyTown is a location-based mobile entertainment app built around local shops, restaurants and hangouts. Users check-in at real-world locations and can unlock rewards. Players can purchase, upgrade and collect rent on their properties in their virtual town.

MyTown offers brand advertisers the ability to reach a very large base of engaged users. As of May, for example, MyTown had more than two million players. More than 100,000 players join each week, and users spend more than an hour per day in the app, on average.

That’s why H&M, a European youth-oriented fashion retailer that’s both trendy and value-oriented, went on MyTown in March. During the H&M campaign, MyTown players that checked in to a retail store, shopping center, or spa, hair salon, or other female-centric locations near H&M stores were able to unlock H&M virtual items that then unlocked real-world discounts. The Times reports that some 700,000 players participated. H&M is now planning a new campaign on MyTown.

Volvo just started a campaign on MyTown. Players check in to an auto dealership or garage and can receive virtual Volvo tires, steering wheels, sedans, or the company’s logo. The timing of the campaign coincides with the promotion of Volvo’s 2011 S60 new mid-sized sports sedan.

Emily Garvey, brand manager at Media Contacts, the digital agency for Volvo, tells the New York Times that Volvo is using MyTown to “attract auto enthusiasts – who are about 60 percent men – to get excited and to change brand perception so people think of it as a sporty, fun and good-looking car.”

MTV, meanwhile, is promoting its September 12 “2010 Video Music Awards” show by using Mall World to offer “virtual replicas of celebrity accessories and fashion items like the singer Beyonce’s diamond ring.” Mall World is a Facebook application targeting women that has about 400,000 monthly visitors.

Farmville, a social game with some 20 million players, is also a virtual opportunity for real world brands. For the first time in July, Zynga incorporated an organic blueberry crop from Cascadian Farms into its Farmville game. In March, Bing used an integrated ad on Farmville to generate 400,000 Facebook fans.

Brand advertisers like H&M, MTV, and Volvo are early adopters in an arena that is still in its infancy, says the New York Times. Currently, “there are few solid measures to pinpoint how much campaigns offering the pretend items build awareness, enthusiasm or loyalty to a company and generate real-life purchases.” But as the real world becomes overly saturated with brand advertising, the virtual world may become the next ad frontier for brands.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

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