Facebook Experimenting With Virtual Currency Gifting in the Feed
It was only a few months ago that Facebook converted its gifting currency from real dollars to virtual credits in an effort to lay the groundwork for the expansion of its virtual gifting business. Now, Facebook is experimenting with a new way for users to give the virtual credits they have purchased to friends in response to content they share in the feed. The pilot program has been launched at a few college campuses, the Facebook company network, and the VentureBeat company network, where details were first published earlier tonight.
Here’s how it works: Currently, the only way to acquire Facebook credits is to purchase them in the Facebook Gifts store at the rate of $1 per 100 credits with a credit card (there are no other virtual currency payment options at this time). The only way to spend Facebook credits is on virtual gifts for friends, which usually sell for 100 credits each (though some sell for 200 credits or more, and occasionally sponsored virtual gifts are available for free). Now, however, Facebook is experimenting with a way for users to give credits to each other in the context of content they have shared. For example, if your friend posts a link that you like, you can either leave a comment, “like” it, or (now) give them virtual currency in response.
Many of the core dynamics of sharing on Facebook are powered by users’ incentive to accumulate social capital by sharing valuable information with their friends. In this credit gifting experiment, users can now get rewarded (“paid”) much more explicitly for sharing valuable content. Although Facebook credits are not currently redeemable for cash, Facebook has done a good job of keeping them scarce and closely pinned to the dollar in order to make the act of gifting them more meaningful.
Facebook’s product designers regularly apply principles of game design to the Facebook experience, and experimenting with explicit virtual currency gifting in the feed is another example of some of those principles in action. However, the current version of the test does not include many other common features that incentivize game play behavior like levels, leaderboards, or even showing users’ currency balance. Rather, Facebook is banking on the fact that because these credit gifts are readily visible to friends as an attribute of the content shared, they will share many of the same social capital exchange characteristics as wall posts, comments, and likes – albeit in a more meaningful way.
Finally, it’s important to note that this experiment appears to not be clearly related to the possible development of a universal virtual currency that could be shared by Facebook and application developers, as was speculated on last week after Facebook’s Gareth Davis said the company was “looking at” different virtual currency options. Such a system would obviously have many other moving parts and require much more complex economic management. Rather, this is essentially a test of a major expansion of Facebook’s own virtual gifting system.
According to VentureBeat, Facebook gifts and credits product manager Jared Morganstern says the test is going “well” so far. It will be interesting to see what Facebook decides to do with the experiment.