When I first read your post I was thinking that maybe there is a hierarchy here, going from 'practical utility' to 'identity value'. But then your post about flirtomatic made me think that perhaps its more about aligning the 'virtual value' to the purpose of the site.

Big Point in Germany are doing some interesting things with 'practical utility'; in their case weapons. Having a better weapon, or more ammo, improves my chance of winning, and being a competitive man my identity is closely tied to winning!

So, perhaps its more about combining sources of value? In the case of digital weapons I'm buying utility that hopefully helps me win and effects my identity.

But then, to really tap into my identity its got to be a little deeper than just a status symbol. Somehow my mac says a little something about me, some how it stands for something that I want as part of my identity.

So if its not just a status symbol then its definitely not about making some digital goods more expensive and assuming demand follows price (although that might be the case with some wines!).

I think, perhaps, its more about examining what characteristics that make up the identity of the sites audience. If its a competitive gaming site then help me win because my self esteem is tied to my success. Or maybe I'm on IMVU and I'm an emotional and sensitive guy so let me dress as a goth. Or Im on Flirtomatic and I want to show I'm caring and a little racy, let me send you a risque gift! But ultimately, I'm prepared to spend the most money when its about me!

It seems my budget for entertainment its far more limited than my budget for defining who I am.

All round its a fascinating topic!

When I first read your post I was thinking that maybe there is a hierarchy here, going from 'practical utility' to 'identity value'. But then your post about flirtomatic made me think that perhaps its more about aligning the 'virtual value' to the purpose of the site.

Big Point in Germany are doing some interesting things with 'practical utility'; in their case weapons. Having a better weapon, or more ammo, improves my chance of winning, and being a competitive man my identity is closely tied to winning!

So, perhaps its more about combining sources of value? In the case of digital weapons I'm buying utility that hopefully helps me win and effects my identity.

But then, to really tap into my identity its got to be a little deeper than just a status symbol. Somehow my mac says a little something about me, some how it stands for something that I want as part of my identity.

So if its not just a status symbol then its definitely not about making some digital goods more expensive and assuming demand follows price (although that might be the case with some wines!).

I think, perhaps, its more about examining what characteristics that make up the identity of the sites audience. If its a competitive gaming site then help me win because my self esteem is tied to my success. Or maybe I'm on IMVU and I'm an emotional and sensitive guy so let me dress as a goth. Or Im on Flirtomatic and I want to show I'm caring and a little racy, let me send you a risque gift! But ultimately, I'm prepared to spend the most money when its about me!

It seems my budget for entertainment its far more limited than my budget for defining who I am.

All round its a fascinating topic!

A simple, “It's valentines – we should offer hearts and flowers”, approach probably won’t cut it. Technology that quickly learns what a specific user is more likely to respond too and measures the success or otherwise of what is presented is likely needed. This is especially important in 'spiky' markets and I suspect virtual goods have a certain viral element to them in that what was popular yesterday isn't necessarily going to be popular tomorrow.

Cognitive Match (http://www.cognitivematch.com) is an early stage company that aims to help site owners solve this problem by using smart mathematics to match users with content/goods in real time.

http://www.broadstuff.com/archives/1014-The-rea…