Sachin Rekhi

So are you thinking about adding a virtual economy to your app or website? The great news is there are a variety of startups out there waiting to help you!

Incentivized CPA Offers and Direct Payments
Over the last two years more than a half dozen partners have emerged to supply publishers with offers and direct payment options to fuel cash flows into their virtual economy. Most partners in the space offer both a set of direct payment options as well as a large selection of offers.

When deciding on partners to integrate with, there are a variety of considerations to think about. Each partner offers a different revenue share, so its important to negotiate to ensure you are getting the lion share of the revenue. I have seen the rev split be anywhere from 50% - 90% net to the publisher. Keep in mind that it may make sense to separate the rev split for offers vs. direct payments, as its often very easy for a publisher to sign up direct payment providers like PayPal, Amazon, Zong, etc themselves and as such, the offer providers aren't justified in taking much of an additional cut on the transaction.

Another very important consideration is the breadth of offers that are available from the provider. Providers have a mix of both hard offers (requiring a credit card or purchase) and soft offers. You want to make sure that your partners have a diverse mix both in terms of types of offers but especially in terms of availability of offers per country. You'll find that some partners are stronger in certain international countries than others. In general though you should expect international monetization to be significantly lower than the US, as availability of offers are limited outside of the large ad markets (US, UK, Canada, etc).

When it comes to direct payments, the direct payment options and country coverage are both very important. Most partners integrate with PayPal or other credit card options as well as mobile payment options. The mobile payments space is still nascent and no one yet has coverage of mobile payments in all countries. So you'll want to ensure the partner you go with has mobile payment coverage in the countries that are most important to you.

Let's take a look at the players in this space:



Offerpal Media, founded in June 2007, is the most well known managed offer provider, supporting 2.5 million completed offers per month across hundreds of apps and websites. Offerpal is a full service provider, offering a variety of direct payment options (Paypal, Amazon, Mobillcash, and Ultimate Game Card) as well as a diverse selection of offers.

Offerpal makes it easy for any publisher to integrate, offering a complete self service platform as well as a dedicated business development and technical staff ready to assist you in your implementation. Offerpal has also sought to establish thought leadership in the space, putting together great articles for publishers as well as events to help publishers learn from each other's success.



Super Rewards is definitely Offerpal's fiercest competitor, launching their product publicly in December 2007. They are aggressive about winning your business and have obtained a lot of high profile Facebook and MySpace applications on their platform. They are definitely worth a look.



Gambit is a fairly new entrant in the space. Built by a group of developers who originally used the technology to monetize their own Facebook sports related applications, they have recently made the same technology available to any third party application.

Being small gives them the agility to innovate on a daily basis. I've made suggestions to them to improve their offering and have been amazed to see them implemented immediately and carefully tuned to optimize conversions. I've already seen their eCPMs start to surpass that of the more established players.



Most offer providers obtain their offers from large CPA ad networks. Several of these CPA ad networks realized that they themselves could get into the business of providing a managed offer product. PayBuyPartner is one such product brought to you by CPA Storm.

The attractiveness of working with them is that it cuts out a middleman which should theoretically result in higher returns. However, they are focused on both offer acquisition as well as offer optimization, which may spread their efforts thin.



SocialCash is another offer provider built by Gratis Internet, one of the largest CPA ad networks. Gratis Internet was even the CPA ad network that brought us the most notorious of incentivized cpa offers: free ipods!

However, they have recently launched a new ad product called Headliners, which has resulted in them de-emphasizing their virtual currency PointCash product. While SocialCash may make sense if you are interested in offers in international countries where they are strong, I would suggest avoiding them as a general solution as they will likely no longer be innovating on this product.



TrialPay, founded in 2006, has a long history of providing qualified offers from prominent merchants. With the growth of virtual currencies, TrialPay has adapted their system to work in the virtual currency environment. There solution isn't quite as plug-and-play as some of the others, but definitely worth looking at for their offer selection.



Peanut Labs originally built Xuqa, a social network that has taken off in Turkey. When ads weren't working, Xuqa introduced a successful virtual currency called peanuts. Peanut Labs is now offering this same monetization platform to third party developers.

Peanut Labs specializes in quality market research surveys, which are often the best type of soft offer. Peanut Labs also has built an impressive selection of direct payment options that differentiates them from other players in the space.

Offer Provider Optimization
Given that there are already so many different offer providers and more coming, a solution is needed to easily A/B test them to select which work best for your site in each country. This should be done for both offers and direct payment options. Since every offer provider will tell you that they are confident they are better than their competition, the only way to know for sure is to test and find out!



Sometrics is the first to build a virtual currency manager product that makes it easy to test multiple offer providers and specify rotation ratios for each provider. They have done a good job encouraging developers to get the most out of offer providers. This product is still in its infancy and not without its limitations, but its a great start at a product specifically designed to address this very real need.

I hope to see others enter this emerging space.

Virtual Economy Optimization
In addition to optimizing the offers and direct payment options, its important for publishers to carefully monitor and tune their virtual economy. For example, a publisher needs to look at available sources (ways of acquiring currency) and sinks (ways of spending currency) to ensure they are appropriately balanced. By graphing currency acquired and currency spent over time, a publisher can ensure that the graphs are aligned. If, for example, the currency spent dips compared to currency acquired, a publisher needs to introduce new valuable virtual items available for purchase or generally increase the price of their goods to keep their users hungry for currency.



SocialGold by Jambool is a great virtual currency analytics product to help you easily monitor your virtual economy, study price elasticity, and generally tune your virtual currency. Through simple instrumentation of your application, you get access to easily understandable graphs and tables overviewing the performance of your economy. In addition, SocialGold provides a wide selection of direct payment options across both credit card and mobile alternatives. Definitely worth checking out as well.

Additional Opportunities
Beyond these existing startups, there are still additional opportunities for startups to build tools to help support the virtual currency ecosystem. With the continued growth in both usage and revenue from social games and virtual economies it's a valuable startup opportunity.

One area ripe for innovation is merchandising of virtual items in social games. Every social game has some form of store where users can spend their virtual goods. This has effectively made every social game an etailer. However, social game developers are not well versed in the best ways to merchandise items in their storefront, on deciding how to feature the most valuable items, on suggesting related items, managing shopping costs, order histories, etc. And it's not necessarily something developers want to focus on when there is enough to deal with in developing the core game mechanics of their experience. It provides an opportunity for a partner to provide expertise in retail to the social games arena.

I expect in 2009 we will see continued growth throughout the virtual currency ecosystem. Got a new product in this space? Let me know!