11. The challenge
Getting value from different users
Propensity to spend
High
Low
Low High
Site activity level
Different segments different needs and opportunities
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12. Engagement vs. cash currencies
Overview
Engagement Currency* Cash Currency
Target • All, but particularly non-paying • Paying customers
customers
Purpose • Reward majority who • Offer additional benefit for
can’t/won’t buy those able/willing to pay
• Incentive for all users to be • Pay to run, grow business
more active
Sources • Regular site login • Direct funding
• Specific feature usage • Completion of ad offers
Sinks • Basic site interactions • Gameplay advantage
• Higher status
• Premium access
Dual currency system addresses needs for multiple segments
* Also known as reward, attention, action currency or points.
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13. Influencing user behavior
Propensity to spend
High
Cash currency
Low
Engagement currency
Low High
Site activity level
Dual currencies can help make users more valuable
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14. Example: Gaia’s dual currency system
Gaia Gold Gaia Cash
Type • Engagement currency • Cash currency
Sources • Daily one-time activities • Direct funding
• Posting to Forums and other • Third party offers
site usage
• Participating in sponsorships
• Sale of items won
Sinks • Buying basic virtual goods from • Buying most coveted virtual
Gaia goods
• User trades • Attain wealth faster
• Entering contests • Level up faster in MMO
• Creating private forums
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15. Monetizing non-buyers
Propensity to spend
High Cash rich
BUT
points poor
Cash poor
Low BUT
points rich
Low High
Site activity level
Opportunity to make both groups better off through trade
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16. Example: Gaia’s marketplace
User to user trading
Cash buyer Non-buyer
Item traded via
purchases earns gold via
marketplace
premium item activity
Trade provides gold to buyers, exclusive items to non-buyers
Both are happier
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17. Monetizing non-buyers
Should you sell engagement currency directly?
Trade has to serve both parties
Clear need for non-buyers to trade for exclusive items
Need for buyers to trade stronger without direct sale
Encouraging user trades has other positive effects
Some buyers become distributors, contributing to sales
Additional supply of items to ecosystem
Higher perceived value of engagement currency
Likely to be perceived as unfair
Devalues investment of time by non-buyers, who may feel second class
Transparent advantage might be considered cheating
Consider carefully before selling engagement currency directly
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18. Maintaining control over currencies
Implied value of currencies likely to attract fraud attempts
Botting of site (“gold farming”) to earn engagement currency
Payment fraud to gain cash currency
Allowing conversion/trading increases costs to manage
Trades increase difficulty of tracing source and reversing transactions
Direct conversion raises consequences of any exploits/bugs/errors
Accounting difficulties for cash and revenue
Legal questions if attention currency is convertible to cash
Set systems to prevent and manage fraud/botting
Consider restrictions to granting/trading if necessary
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19. Controlling abuse on Gaia
Controlling cash currency
Set limits on conversion for new purchasers
Amount minimizes exposure
Trade delays allow for review of transactions
Log trade activity, with ability to reverse
Managing engagement currency
Select use of Captcha to limit automation
Mass registrations tracked and banned
Extreme usage blocked or reviewed
Negligible fraud, limited black market availability of Gaia Gold
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20. Managing inflation
Maintaining value of engagement currency
Importance of a budget
Consistent rewards and standards for progression
Currency loses perceived value if granted too freely
Set desired level of inflation: investment versus accessibility
Elements to balance in economy
Amount granted (including rewards converted to currency)
Sinks that will counteract inflation and add to perceived currency value
Supply of goods available for purchase and trade
Other things to consider
Approximate proportions by type of activity
Relative “wage” of rewards (e.g. amount per activity, time or value)
Manage budget to maintain value of engagement currency
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21. Gaia’s gold budget
Getting the most out of engagement currency granted
Budget set based on expected usage
Scale with site usage
Adjusted to achieve controlled inflation
Amounts set to direct site usage
Decreasing “gold curve” to have diminishing returns to grinding
Encourage trial of diverse site features
Premium on community/social activities
Gold grants across multiple categories Once a
day
Once a day rewards
Revenue
Engagement activities
Revenue generating sources
Engagement
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22. Other suggestions
Balance uses/sinks of each type
Cash currency uses pay the bills
Engagement currency uses keep your site active
Maintains perceived value of each and increases benefits of trading
Engage users before pushing monetization too aggressively
Could be turnoff if they aren’t yet committed users
More experienced users become easier upsell
Set expectations and manage commitments carefully
Manage exchange rates
Set fixed official exchange rate for consistency, implied fairness
Monitor implied market exchange rates for signs of over-inflation
Watch offsite trading as sign of exploits and fraud
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23. Pros and cons of dual currencies
Pros Cons
• Flexibility to engage different • Added complexity of user
user segments experience
• Separate virtual economy from • Investment to manage and
real money balance interactions
• Can indirectly monetize active
but non-buying segment via
trade
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