According to data provided by AdNectar, branded virtual goods receive ten times the interaction level of their non-branded counterparts. That number references the percentage of people that click on or send a gift after seeing it. The strong results have driven numerous corporations to launch branded gift campaigns across numerous social platforms. AdNectar has now run campaigns for Fisher Price, Godiva, Gilette, Procter & Gamble, Trident Gum, and Malibu, just to name a few.

Is Cost Per Gift The Future Of Social Advertising?

The industry average for banner ads on social networks is around 0.04 percent which is extremely low. AdNectar however is seeing a 4 percent interaction rate which is 100 times higher. Does that mean all advertisers should be buying ads on a cost per gift basis? It makes sense and that’s why Facebook has also been seeing great results from their virtual gift ads. Recently a number of movies including Harry Potter and the Half-Blood Price have run gifting campaigns on the site.

So how do you pay for a gifting campaign? It’s pretty straight forward. AdNectar has been charging brands on a CPM or Cost Per Gift (CPG) basis. For those campaigns, advertisers only pay for those gifts that are viewed from within Facebook applications. If someone re-gifts a virtual good or does anything else with it, the advertiser is not charged. Advertisers are currently running campaigns in which millions of gifts are being sent which means the “Cost Per Gift” advertising model is already a multi-million dollar business.

A Great Way To Deliver Video Advertisements

As the video below depicts, many of the gift campaigns launched by AdNectar include videos within the gift unit. Users that like the gift, which is visible on their friend’s wall, can then click on a “Share It” link which redirects them to a landing page which shows the gift and has a box with a list of their friends’ names. While other video campaigns like those on YouTube can be instantly shared through Facebook, this form of gifting encourages users to send it to their friends from directly inside the feed story.

So far this appears to be a great approach and a great alternative to the appvertisement model which requires the development of robust applications. While applications can provide value to brands, virtual gifts are practically guaranteed to reach a high volume of gifting if properly positioned. According to AdNectar, one other benefit is that publishers who run the advertisement also experience growth in their traffic, making this an easy to sell value proposition.