Why virtual goods work and why your brand should WAKE UP!

I got a bit emotional this morning. Yesterday, I forgot to feed John my virtual pet dog. He was really hungry. He's on Foo Pets. I almost spent real cash to feed him. (I discovered that I didn't have to this time - I had some foo coins I could use to get his virtual food.)

So, yes, I bonded with my virtual pet and I felt bad when I forgot to feed him. This is crazy you think? Yes, it's crazy. But it's also human nature. See, I spent some time setting up my account. I “adopted” this virtual dog. I chose him over many others. I gave him a name. I played with him for a few minutes. Threw a stick and ball. I also spent a minute giving him a bath and fed him twice. After a few minutes, I was “invested” in him. I had spent time - valuable time - and now I don't want to loose that investment.

This is why virtual goods work. You're invested the minute you engage. Once you spend time - you don't want to “loose” that investment. Standard cognitive stuff. The same trick works for auctions. Once you bid for that TV, you feel you own a part of it. You don't want to loose something you own, so you keep bidding. Yeah, sometimes it's just your time, but once you invest - you're in!

It's already clear that virtual goods and social gaming works. It's been the driving Internet business model in Asia for years. It's coming to the US in a big way in 2010.

I think the big idea for your brand is pretty clear: You have to get your brand into these models now. Just look at me. I'm 37 year old. I became invested in my virtual pet! If you want to capture the attention of anyone under 25, you have to position your brand in this experience flow.

Hey, are you snoozing again?