One More Use for Facebook Credits: Incentives
Facebook Credits initially were used to help pay for virtual goods inside social games, then were used for other digital goods, like movies. Now other companies are leveraging Credits to lure consumers into connecting with their brands on the social network.
Today, ifeelgoods, which helps brands implement these incentive programs, has raised $6.5 million in capital. The first round was led by IDInvest Partners, a venture capital firm in Europe, with Tugboat Ventures also participating.
Michael Amar, co-founder and CEO of ifeelgoods, said its platform enables retailers to give away Facebook Credits to consumers, who can then perform tasks including liking the retailer on Facebook, signing up for an email distribution list, making a purchase, checking into a location or answering a survey.
Amar said giving Credits often works better than offering a coupon or discount code, because consumers like to believe they are receiving something, especially if they know they don’t have to make a purchase.
When the company launched in September, Amar said, there wasn’t a lot of awareness about Credits. But awareness has increased rapidly, because there is a lot of natural overlap between the demographic retailers are looking for and Facebook gamers, who may be 40-year-old housewives killing time between diaper changes.
Facebook Credits reach a new milestone on Friday when the payment service comes out of beta and the company requires all social-game developers on Facebook to use it — and consequently share 30 percent of the revenues.
An example of a promotion on Facebook is an advertisement that offers consumers five free credits if they enter their email address to be added to a distribution list. With one or two clicks, consumers can earn the points.
They can then post the offer to their wall so their friends can see it. Amar said consumers are willing to share this information 60 to 70 percent of the time.
Some of the retailers using ifeelgoods include 1-800-Flowers.com, GameFly, Ice.com, Meijer, Shopping.com, FTD and La Redoute.
Retailers must pay 10 cents apiece for the Credits, but Amar said the economics pencil out because it’s a small cost to get users to connect with a brand. Other applications using Credits as incentives include Booyah’s MyTown and Shopkick, which both require check-ins in the real world for a chance to win.
Amar said he imagines being able to provide other incentives in the future, such as credit on Skype.
With the funding, ifeelgoods plans to hire engineers and sales people and estimates it will have 20 employees in the fall. It also plans to expand in international markets.