Is good content alone enough to build reader loyalty? Or could adding a little gameplay — and some circular icons — turn casual readers into engaged ones?

Early next week, The Philadelphia Inquirer and Daily News’ philly.com will launch a virtual rewards program to build reader engagement. Registered users will earn points each time they visit the site, read an article, or post a comment. These points will translate into a series of virtual trophies, which will appear alongside the articles the users read and be displayed next to their usernames whenever they comment on a story.

Philly.com’s partner in this project is a tech startup called Badgeville, which won the audience choice award at the TechCrunch Disrupt conference earlier this month. The company’s name puns on FarmVille, the Facebook game which convinced as many as 85 million users to trade virtual vegetables from virtual farms. Badgeville uses similar social gaming techniques, like awarding points, trophies, and badges, to help web sites retain users. This is not a new idea: The Huffington Post already rolled out their own system of badges this April. But Badgeville is expecting newspaper and media sites to become some of their most enthusiastic clients.

As users grab their news from the swiftly moving streams of Twitter or Facebook, homepages can seem increasingly irrelevant, and traffic spikes from successful stories soon melt away. Two years ago, the focus of philly.com execs was on pageviews, said Yoni Greenbaum, philly.com’s vice president of product development. Now, as at many newspapers, what matters at philly.com isn’t just clicks, but engagement. How long are visitors spending at the site? How often do they return?

I spoke to Badgeville’s CEO and founder Kris Duggan about the company’s overall strategy for news sites, as well as to Greenbaum and Christopher Branin about why and how Philly.com is adding points and trophies.

Duggan told me that he doesn’t think news sites should move beyond just adding Facebook widgets to their pages as their social media strategy. “You’re just promoting Facebook, which is kind of your competition,” he said. Instead, he thinks news web sites need to leverage the same kinds of tactics that make Facebook so additive. The goal is for users to spend time as part of the news site’s own community, rather than just viewing the organization’s content occasionally through the lens of another site. (The New York Times, of course, has already implemented their own on-site version of this, Times People, which has yet to really take off.)

In order to encourage users to hang around, Badgeville can create built-in frameworks to incentivize any kind of behavior with any kind of reward, Duggan said. Rewards might be completely virtual, like shiny pixel trophies, or more real, like coupons or access to premium content. The key, Duggan said, is “communicating with the user at the right moment in time to drive behavior.”

What news sites need to do, Duggan said, is build on incentives that have worked elsewhere on the web — anything from the badges that powered Foursquare, as TechCrunch suggested, to the little profile completion bar on LinkedIn that tells users that they’ve only filled in 60 percent of their profiles.

“I really do believe that people want to see their face on web sites,” Duggan said. News sites right now use their sites to highlight their content. Duggan suggests they might need to become more like Facebook, and highlight their loyal users, as well. Why not add a widget with the faces of the users who have emailed the most stories, he told me, as well as a typical “most emailed list” of stories getting a lot of attention?

While Badgeville bills itself as a loyalty and rewards system, at the core, Duggan said: “We think of us as an analytics product…I don’t think they [news sites] really understand who their audience is. I don’t think they have the analytics to say, ‘here are our high-loyalty users, and our medium-loyalty users.’ They don’t know who’s sharing, they don’t know who’s commenting, they don’t know who the high-quality commenters are. They might have little tools for each of these things, but none of these things are unified…We think the next generation of analytics is actually influencing outcomes and changing behavior, and we think we’re in the forefront of that.”

For philly.com, partnering with Badgeville is a substantial investment. While Greenbaum said the monetary terms of their partnership were private, he did say that among philly.com’s third-party partnerships, it was “in the top three” in terms of cost.

Philly.com‘s Badgeville roll-out, tentatively slated for Tuesday, will start off with a very simple incentive system. Users will get one point for visiting the site, one point for reading an article, and one point for commenting. The trophies they are awarded will be generic ones from Badgeville’s trophy library, but the “badges,” awarded for certain milestones — like posting a given number of comments — have been custom designed for philly.com. Branin said Badgeville’s service includes some barriers to keep people from gaming the points system — users can only get a point for visiting the site once every half hour, for instance, and for commenting once per article.

Branin said that they hope the points system will convey status on the site’s more enthusiastic, dedicated readers and commentors, and that the system might have an impact on the commenting culture, as HuffPo’s badge system set out more deliberately to do. As they get initial feedback on how the system is working, they’ll continue to add incentives and rewards.

I asked both Greenbaum and Branin and Duggan about how they thought reporters would react to the new system. After all, Badgeville operates on the assumption that giving out digital gold coins will attract loyal readers in a way writing good stories won’t. To a certain segment of journalists, the ones who pounce on tech entrepreneurs for referring to articles generically as “content,” Badgeville is likely to look like another step towards the total trivialization of news.

“I don’t think we’ve done a really in-depth analysis in talking with our reporters on how they’re going to feel,” Branin said, adding later that he didn’t think readers would be clicking on stories just to earn points.

Greenbaum said he thought Badgeville was friendlier to reporters than other social media tools. “It’s not that an article will have a value attached to it. It won’t be: ‘1,000 people liked this article and 10,000 people didn’t’…It’s really a tool on the publisher level and not the reporter level,” Greenbaum said.

Greenbaum and Branin also noted that the information gained from the points-and-trophies strategy could be used to direct traffic to stories that might otherwise languish unread. Philly.com might create a special badge for people who read, say, land use and development articles, or other worthy reporting that doesn’t tend to draw a lot of eyeballs.

For his part, Duggan noted that implementing a Badgeville reward system won’t fix sites with bad content or no community. A news organization needs a certain amount of community already in place for the points and trophies to have an impact. Philly.com is using Badgeville to build on what they already have; last month, that was roughly 6 million unique visitors, 76 million page views, and nearly 70,000 comments. They will be watching how the system affects the outcome of the complex algorithm they use to measure engagement. (Right now, that equation spits out a score of 73/100 for sports content engagement on philly.com, and only about 30/100 engagement for news.)

On the other hand, Duggan said, “Right or wrong, it’s just how it is. Facebook and Twitter have transactionalized your relationship with content.” In a world where content is shared freely, and articles sleep into the stream and disappear, news sites need something to “suck people back” to their home pages, Duggan said. “If you don’t have a magnet to keep people there, you’re dead.”