Two trends hit me in the last week: 1) the desire for marketers to increase engagement through social media is leading them to explore game mechanics to incent users and 2) the quasi-backlash against “Social Spam” which ironically is being driven a great deal by the game mechanics of applications on Facebook.

Seeing Social Media as All About Branding

I attended a great brainstorming session last week held by Eli Mandelbaum’s Founders Roundtable that touched on a couple of these things. Eli gathers VCs, founders of start-ups and industry vets together for small, intimate discussions in an effort to get people to share ideas, information and network better than you would at the typical industry event.

The group noted that several organizations are trying to put the old online metrics on social media, but really it’s less about click through rates growing followers or fans and more about brand marketing which ends up driving long-term customer value. To underscore that realization, Kevin Ryan, the VP of Social Marketing at Barnes and Noble noted they moved social media from the acquisition team to the branding team just this summer.

So while monetization of social media is still elusive, driving engagement and positive brand experiences have become the goals (eventually tied back to CRM systems where you can show the positive impact on customer lifetime value). Indeed, one attendee suggested that their Facebook Fans were actually some of their most loyal customers, with a much higher than average frequency and spend rate. This is corroborated by marketing professor Puneet Manchanda, who noted a recent study in the Fall magazine of the Steven M. Ross School of Business at the University of Michigan that “just becoming part of the brand community seemed to casually increase the amount spent by brand community participants by about 25 percent.”

Turning to Game Mechanics to Incent Engagement

So as engagement becomes key, marketers continue to try to figure out how to incent users to talk more about their brand. While several attempt to enable customers by providing tools and information to make them feel more a part of the brand, there is a desire to help provide additional incentive to get users to post/blog/comment about the brand.

While there are notable giveaways (from Moonfruit to Pizza Hut to coupon codes for key users to share with friends), many have started to look at tactics typically found in game play to help drive progression: unlocking of levels or content, awarding of achievement badges, leaderboards and limited items to show off.

Marketers are beginning to incorporate this game mechanic in several new ways:

• Nike+ is letting users chart their running progress, the feedback giving them incentive to alter their running patterns, or as Dennis Crowley, Co-Founder of Foursquare said during the Founders Roundtable, give you the “incentive to get out of bed in the morning and run.”
• Dennis’ own Foursquare is focused on mobile location-based services, but provides incentive to users to try out more restaurants by unlocking achievements (become the Mayor of a location by going there the most often), showing leader boards, and using the social connections of its customers to drive others to try out new places.
• Honday’s new Insight actually tries to make users more efficient drivers, prompting users to “boost their Eco Score” and gain little green leaves based on acceleration and braking skills, providing multiple levels of feedback as you drive.

While providing these kind of achievement-based or feedback mechanisms can definitely boost engagement, there is also a chance of both burn-out and annoyance. From a burnout stand point, users reach a certain level and the incentives just don’t drive them any more (“I’ll never reach the leader board” or “I’ve passed all my friends and there isn’t much of a challenge any more”).

Social Spam and the Emerging Backlash

Likewise, we’ve seen a great deal of annoyance with “Social Spam” – where you are prompted by an application to brag about an achievement, about going up a level, or challenging them to a match. These are basic game mechanics to push progression in a game, but in the social space, they are used to draw the player’s friends into the game.

I believe a great deal of Zynga’s success, in addition to good gameplay, is their ability to latch on to the creative use of “Social Spam” to get users to post to their network – to give their friends rewards (or “share the wealth” to give a FarmVille example).

But when something is successful, everyone starts to follow suit: with more and more games trying to engage users, the notifications and reminders and posts from game applications are starting to outnumber those by friends. Some recent feedback I’ve solicited:

• “I try never to post if I can catch it in time…it’s annoying and fills up everyone’s feeds!”
• “I post as last resort, better to keep in game. I filter all but the few that I play, it’s really very annoying and spamy.”
• “I hate spamming. I want an easier way to limit spamming to only my friends who play the game.”
• @SFsourmilk: I wish #Farmville would add REAL social components (Tractor sharing, social harvesting) rather than just social spam

And while those quotes talk about Facebook game applications, the same can be said of users in Twitter: @praxisloki: “Conflicted about videogames being able to tweet my milestones and achievements. Champions Online & Uncharted 2 both opt in.”

Clearly, users are already cognizant that there are repercussions for posting too much. They are aware of the social implications of being seen by friends as “that guy that is always playing Mafia Wars” or “the person that sends me social spam all the time” – just like companies worry about their brand, users are worried about their personal brand amongst their friends. As the novelty wears off, customers will demand more control and be more judicial about what messages they will share. (Shanti Bergel did a nice piece on Social Network Fatigue which is worth a read).

This is not to say that game mechanics are not important in developing a successful incentive strategy to get users to engage their friends across social media. But the ultimate incentive for users is in the value of what is shared. Marketers and companies must first focus on quality content, products or useful data (like Nike+ stats) and only then can they achieve long-term success by wrapping them in the game mechanics to grow them virally.