Virtual currencies gain ground

23 May 2013

SAN FRANCISCO: Mobile consumers would rather engage with adverts than pay money to receive virtual rewards and premium content, according to new research into the fastest-growing segment of the virtual currency economy.

The study, titled Redefining Virtual Currency, was carried out for Tapjoy, the mobile advertising and publishing platform. It investigated virtual rewards, including loyalty points, credit card points, airline miles and app-based virtual currencies.

It estimated that the virtual currency economy is worth $47.5bn, and will grow to $55.4bn by 2017. Within this, advertising engagement is expected to be the fastest-growing segment, increasing more than 200% to nearly $900m by 2017.

The study found that 20% of mobile device owners engaged with advertising on a daily basis in exchange for virtual rewards and premium content, while almost half did so at least monthly.

"Mobile device owners have demonstrated that they're willing to interact with a brand by exchanging their time (ad-views) and personal data for free digital content," said Jordan McKee, an analyst with Yankee Group and author of the report.

"Since users choose to take part in this exchange, the engagement can be far more meaningful and powerful than pop-up, banner or television advertisements," he added.

Specifically, 54% of smartphone users and 41% of tablet users had paid for in-app premium content. But given the option of receiving the same content for free in exchange for advertising, both sets overwhelmingly preferred engaging with advertising.

Respondents also demonstrated a willingness to engage with advertising to receive digital content. For example, 77% were prepared to engage with ads to earn a tablet app, 73% to get tablet in-app premium content, 73% to receive music and 67% to get smartphone in-app premium content.

Despite campaigners' concerns about privacy, mobile users were also prepared to trade personal information, such as email addresses, to advertisers in exchange for virtual rewards and premium content.

Some 70% of smartphone owners and 53% of tablet owners had provided such data in order to download a paid app for free.

Peter Dille, chief marketing officer at Tapjoy observed: "We expect this virtual currency model will continue to grow through mobile beyond games and into other types of content, such as music, print media and video content."

Data sourced from PR Newswire; additional content by Warc staff