How Gaia Online Made Users Love Ads With Branded Virtual Goods

Gaia Online's branded virtual goods strategy has in many ways become archetypal for virtual worlds that monetize more through sales of virtual items and microtransactions than by subscriptions and fees. Gaia Online  offers advertisers the chance to create branded experiences in the world, which can involve anything from watching ads to participating in games and contests. The reward for taking part in these interactions is usually a virtual good that somehow evokes the brand in its design or function. User interest in goods like this in Gaia is high because they tend to be limited edition offerings with high resale values on Gaia's secondary market.

Gaia gold is the main virtual currency of Gaia Online, earned through participation in the site and used to buy most of the game's virtual items. A second virtual currency, G-Cash, is obtained via RMT and used to obtain a small selection of high-ticket luxury virtual items, some based on licenses provided by third parties like Virtual Greats. 

But Joe Hyrkin, Vice President of Sales and Business Development, doesn't see the direct sale of items like the Virtual Greats line as a major part of Gaia's branded goods business, since they tend only to appeal to users who are interested in a given celebrity brand. Instead, Hyrkin feels Gaia gold is one of the main motivators that drives Gaia Online user engagement.

"In the case of Skittles, if you participate in various parts of the campaign, you earn items that are valuable because they're only available for limited periods of time. They're valuable because we have this auction site where users can trade or sell items to other users," said Hyrkin. "In the case of Sony we did a promotion for House Bunny and as part of pledging in the sorority experience you got a pair of pink bunny slippers. They were worth 400 gold after promotion, but now they're worth 1000 gold because of their limited initial accessibility."

Exactly what form a branded virtual campaign experience can take in Gaia varies tremendously. In the case of a Men's Warehouse campaign currently going on, a shop selling virtual tuxedos for avatars has opened up in the world. For Verizon, users can participate in activities to win virtual phones and other accessories for avatars. Gaia's Scion branded area features a car-racing game and a steady stream of virtual items users can use to customize their virtual cars. Hyrkin estimates there are about ten different branded campaigns going on as of this writing.

"We typically launch in the neighborhood of 5-7 campaigns a month," said Hyrkin. "We try not to do too many, but there are some that are longstanding. Verizon has been sponsoring Verizon Cinema since August, and Scion has been a partner of ours for about two years and they're integrated into the Gaia cards area. Skittles just launched a new campaign with us and they'll be on the site for an extended period of time."

Building Branded Success

Scion's ongoing campaign in Gaia has in many ways set the standard for how brands advertise in the virtual world and what types of brands fit with Gaia the best. Scion Interactive Marketing Manager Adrian Si sees a significant overlap between the demographic of the Gaia user and likely buyers.

"Gaia is a good fit for Scion since we target the youth trendsetter who happens to spend a lot of time online and within various community sites. The worlds they're involved in now are the next evolution of online communities so it made sense for us to partner with them," said Si. "Scion can interact with them in an environment in which they are very comfortable. And, we're providing them with something that benefits them and that they can personalize. If they come away with a positive experience, that's the most we can ask for."

Scion's campaign in Gaia isn't a minor part of its targeting advertising, either. While Gaia developed most of the content in conjunction with Scion's ideas of what defined the brand, Scion looks to levels of user engagement in Gaia to help measure how well the brand is doing and to get ideas they extend into other areas of its advertising. Scion also has a presence in There.com and Whyville as part of its efforts to reach the 18-35 demographic.

As it did for Scion, Gaia generally handles the design and creation of the branded virtual items in its campaigns, with different approaches reserved for different sorts of brands. For a video game, Gaia might create versions of the game's iconic items for Gaia users to interact with through their avatars. For a movie, virtual versions of major items from the film, or items that referenced a film's stars or aspects of the costuming. A promotion for the film Paul Blart: Mall Cop gave Gaia users the unusual chance to own a virtual replica of the mustache lead actor Kevin James wore in the film.

"A lot of it depends on the experience that revolves around the virtual good. We did a campaign for Nike last year, and users were together in a group able to watch a piece of video content promoting this campaign," said Hyrkin. "Then they won a Nike t-shirt that let you move faster in town. So we built the ethos of the brand into the item. That worked because it gave users something really fun and unusual to experience with that brand."

Not every branded virtual good associated with a campaign in Gaia will gain in value in the game's secondary market. If users don't decide a particular brand's items are cool, there won't be much demand for purchases of it after the ad campaign ends. Much of what sets the secondary market value of a branded virtual good – and, by extension, its long-term impact on users – is the context it's presented in.

"We had some campaigns with 2-3 branded virtual goods, and only one was really cool and only that one increased in value. If there's a set of items, then a combination of the set increases in value. Sometimes it's the theme of the product itself and if users talked about it beyond the lifetime of the campaign," said Hyrkin. "It might be a movie where the campaign lasted a month but users kept talking about it, so they wanted to have those items so they could wear them while they talked."

Context and Campaigns

Shaping user perception, then, is an important part of what Gaia does during a branded campaign. It is of course beneficial to the advertiser, but it's also important to making the branded experiences feel like an inviting activity in Gaia rather than something intrusive. If Gaia has done its job successfully, then the users value the campaign's branded virtual goods, at least in part, because they valued the campaign.

As far as that goes, it's often the items that tie themselves most closely to the Gaia experience that end up becoming the greatest long-term successes, like the speed-boosting Nike shirt or a virtual cannonball promoting a Pirates of the Caribbean theme. The cannonball could be thrown at other users or the screen, giving it an obvious role to fill in Gaia's social interactions. The only items that really don't work are the ones that fail to have a sense of the playfulness particular to a virtual world.

"Sony's done maybe half a dozen movies with us, and the last few have been dramatically bigger than the first few because they've come to understand how Gaia works," said Hyrkin. "A great one was You Don't Mess With the Zohan, where they wanted to do a t-shirt, so we did something else, a cool hair dryer item. They saw the hair dryer did better than the t-shirt and they realized that more interactive and exciting items have more value."

Hyrkin describes Gaia as having done 60 to 70 branded campaign over the past two years. Gaia's first campaign was to promote The Last Mimzy film, conducted in cooperation with the Deep Focus marketing agency firm. Now the company goes back to Gaia Online with promotions about once a year.

Deep Focus spent some time in Gaia, observing the way users interacted and getting a feel for the nature of the community. What they noticed very quickly is that most interactions and conversations were taking place with Gaia's virtual goods as a central focus. As it happened, The Last Mimzy was a film that suggested immediate ideas for a virtual good tie-in.

"The great thing is that the Mimz
y in the title of the film was a plush rabbit, so that made it perfect. You could almost see the characters in this virtual world carrying the plush rabbit around the way the characters did in the film," said Deep Focus CEO Ian Shaffer. "A light went on, we thought if we did a limited edition virtual good and created a secondary market for it, not only would the conversation go on around the launch of this virtual good but once the initial availability passed there would be conversations about how to obtain it."

Though it might seem contrary to a brand advertiser's immediate interests, Deep Focus intended for the Gaia Online version of the Mimzy to be scarce from the campaign's inception. They wanted the Mimzy to be a source of product envy, which could prompt users to want to see the film even if they didn't have the connections or Gaia gold necessary to obtain a virtual Mimzy for their avatar. Those who initially obtained the Mimzy interacted with the brand more directly by watching a trailer for the film.

In terms of stats, Gaia is an online advertiser's dream. 60% of users are between 16 and 24, with a 55% to 45% female-to-male ratio. The usual engagement time of a user interacting with a Gaia branded campaign area is between 15 to 30 minutes, not counting time a user might spend interacting with a brand by just wearing branded apparel or playing with branded goods. Advertisers, says Hyrkin, have been taking increasing notice over the last six to nine months.

"We're way beyond an experimental site. A lot of players in the
space only have a million or two users,and anything brands are doing
there is an experiment," said Hyrkin. "With us, their campaigns are
substantive and a huge part of their online activities. Increasingly
brands see Gaia as an integral part of their campaign for the 13-24 US
population."

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