The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
Consumers are taking advantage of new ways to buy virtual goods, such as a teddy bear for a friend’s Facebook page or a new weapon for an avatar in an online game.
13% of online consumers say they have purchased a virtual item in the past 12 months, up 1 percentage point from last year, according to a survey by market research firm Frank N. Magid Associates and PlaySpan, whose technology enables consumers to make payments from within online games, virtual worlds and social networks. The average amount purchased increased nearly 14% to $99 from $87 in last year’s survey.
43% of iPhone owners say they have made a virtual good purchase, up from 28 last year, and moving those consumers into the top spot among purchasers, followed by participants in virtual worlds (41%), weekly players of games on handheld devices (33%) and those who play games on mobile phones every week (32%).
Also notable was the emergence of Facebook Credits, a new currency for making purchases on Facebook—16% of digital buyers say they have used Facebook Credits to make purchases.
The demographics of virtual goods buyers skew heavily male: 31% of men 18 to 24 says they have bought virtual goods, followed by males in the 8 to 11 and 12 to 17 age ranges (both 23%), males 25 to 34 (21%), females 8 to 11 (16%), females 12 to 17 (15%) and females 18 to 24 (14%).
57% say they have made purchases within a game, 38% at the official web site of a virtual world or game, and 16% at an e-commerce site like PlaySpan. 37% say they have made a purchase in a free, web-based game, 31% on a social network, 29% in a multiplayer computer game and 29% in a game on a social network site.
“With the proliferation of smartphone users, and players becoming more comfortable paying for items within virtual worlds and social networks, Magid believes there is a huge opportunity for developers and publishers to capitalize on this growing multi-billion dollar industry, especially as virtual credits and pre-paid payment options become more widely accepted,” says Mike Vorhaus, President, Magid Advisors.
Magid cites estimates that U.S. sales of virtual goods stand at $1.6 billion and global sales at $10 billion.