Next Big Thing: Virtual bounty

Savvy brands are rewarding consumers for social WOM, or just for being their game-playing, entertainment-loving selves.

Strategy magazine’s Next Big Thing series explores the concepts and technology that will likely change the media and marketing games in the not-so-distant future. This final installment looks at the trends in rewarding consumers.

What if you could reap rewards from activities you do on a daily basis, like share on Facebook, send a tweet or play a game on your smartphone? Increasingly, this is becoming the case as brands tap the power of rewards as a marketing tool.

Examples are popping up everywhere, for instance, on the Facebook app that the Globe and Mail launched in April, Globe Lifestream. The app complements the redesigned Life section of the Globe’s website, providing a personalized stream of content to its female target. And if that audience happens to share articles they like, they’re rewarded with contest ballots to win gift cards.

“Quality content will win the best audience, regardless of the medium, but layering in incentives can help at key times,” says Sean Humphrey, director of marketing at the Globe and Mail.

The Facebook page has nearly 2,900 “likes” with over 15,000 shared stories and 2,000 downloads, aligning with the Globe’s expectations, says Humphrey.

Retailers are also jumping on the social rewards bandwagon. Future Shop recently unveiled an app aimed at students called “Tapped In” that awards credits towards Future Shop gift cards, earned by “liking” the brand on Facebook or by using the #BeEverywhere (the name of the back-to-school campaign) hashtag in tweets.

And clothing retailer Dynamite launched a James Bond-inspired Facebook contest that encouraged consumers to find clues hidden in posted videos for a chance to win gift cards and cash. But its young, female target will receive store coupons just for playing the game or liking the page.

When asked if this tactic will become more commonplace, Humphrey says that while there will be a place for incentives, “smart marketers will not invest in shareable content, let alone incentives and rewards, unless they see incremental growth…It’s great to have consumers who will share your content, but…if their networks ignore it, you aren’t much further ahead.” In other words, it all comes back to that basic principle: buzz means nothing without results.

If the above examples can be boiled down to social interaction as currency, Brian Wong is offering a rewards system that he considers to be the opposite.

His company, Kiip, gives brands the ability to reward people playing mobile games by randomly offering them gifts. So, for example, a gamer reaches level 10 and a message pops up offering them free beauty product samples to congratulate them on their achievement. The player doesn’t know when a gift might appear, or what it will be, so they aren’t necessarily playing to win a prize.

The brand sets the reward and its demo parameters, and Kiip uses an algorithm to deploy the rewards in real time that are most fitting.

Rewarding consumers for something they’re doing anyway has been on the radar for a while (Topguest and Foursquare reward people for being wherever they happen to be), but Wong says the difference is the concept of reciprocity – where a brand gives something to a consumer and gets something back, not in a transactional way, but as part of a relationship.

“It’s less doing something for the brand and more the brand doing something for you as a result of you doing what you’re already doing,” says Wong, who is originally from Vancouver and started Kiip in San Fransciso about a year ago. Kiip is already working with big-name US-based brands like Sephora, Vitamin Water and Dr. Pepper (campaigns will be rolling out in Canada in the coming months).

The positive-association benefits for the brands are obvious: “Every brand wants to be there when someone is happy or doing something significant,” says Wong. “We’re guaranteeing that someone is paying attention.”

So far, Kiip has consistently seen double-digit redemption rates (sometimes as high at 50% for free samples of Sephora products), whereas the usual rate for direct response is 0.01% to 3%, says Wong. The interest in Sephora isn’t surprising, considering that the average mobile social gamer is actually female, age 28.

And while Wong believes there will always be a place for banner ads and what have become traditional digital buys in the foreseeable future, he notes, “Consumers are going to expect more, and the way you can create something that catches their eye will be limited, so that will continue to be a race that every brand has to spend time thinking about.”