Priceless Promotions

I was floored last month when I read a CNET report estimating that Facebook racks in an average of $35 million in virtual gift sales each year. These virtual gifts, which can range from an image of a birthday cupcake to a pair of stiletto shoes, can be sent from one person to another for $1. The gift is then placed on the recipient’s profile page for all to see.

For example, in May, some of my friends received promotional “Sex & the City: The Movie” gifts from other Facebook members. Many gifts are only available for a limited time so there is often a sense of urgency—and victory—for Facebook members who successfully snag one before the virtual stock runs out.

If I ever send a virtual gift to a friend, I usually hold off for the sponsored freebies (I like to save my dollars for tangible gifts). Monetary worth aside, these free gifts are rich in value for the companies that sponsor them. (The sponsored item gets prime real estate placement on members’ profile pages.)

Although retailers are creating profiles and groups connected to the social-networking world in hopes of reaching their target audience, I’m baffled by how few have yet to tap into the virtual gift space. I’ve seen gift promotions from companies ranging from Miller Light and Dr. Pepper to Airborne, but retailers have been slow to jump on board. And I can’t figure out why, especially since interest in retailers certainly exists among Facebook users.

For example, my “news feed” recently reported that my childhood neighbor became a “fan” of “aerie by American Eagle” (meaning she added the retailer’s profile to her own Facebook page). I haven’t talked to her in years, but now I know where she shops (and truth be told, I always liked her style).

I was an early adopter of Facebook—I joined two or three months after it launched in 2004—and it’s been fascinating to watch it grow. Facebook has changed year after year, introducing new features and applications for members to use. The latest version is barely recognizable from its 1.0 platform—and although some changes have been well-received in the online community, others initially generated negative feedback.

For example, I remember when the news feed was introduced in 2006. It created quite the Facebook uproar (some called it “stalker feed,” because it allows others to keep track of changes made to profiles, such as updates to their relationship status or user conversations). Now, the news feed is actually a site staple that people have come to love, embrace and rely on for getting news about their friends.

In fact, when Los Angeles had its 5.8 magnitude earthquake in July, my feed alerted me before the media broke the story. My California-based friend updated her Facebook “status” with news of the quake and I was able to see the changes she made to her profile in real time. We were already messaging back and forth before the rest of the country heard the news.

Facebook is truly changing the way Gen Y interacts online. Users now have a way to stay on top of their friends’ profiles, and ultimately keep track of what’s going on (from their daily lives to their latest interests).

That said, retailers need to create more ways to get onto profile pages—and launching a sponsored free-gift program is an easy, fun and quick way in. Facebook users are ready for retail-inspired virtual gifts. Just start giving it to them.