Friday, April 9, 2010
Every eyeball has a price - literally
The biggest innovation brought by Google (and largely responsible for it's ground breaking success) was that under a cost per click systems companies now could measure ROI much more precisely. Instead of relying on indirect audience measurements - number of newspapers sold, TV audience ratings - advertisers now could know exactly how many people clicked on an ad.
The evolution of CPC was the so called cost-per-action, in which the advertiser pays when the user actually do something - spend time on a website, accept an offer, buy a good.
However attractive these types of advertising deals are, they all had the same problem - there is no real incentive for the audience to engage with the ad or respond to it. And the click through rates and conversions rates showed it. For every thousand ad impressions, if you get 20 to click on your ad, you should consider yourself lucky.
This is why I was pleasantly surprised when I read that some companies are now offering money for users to watch an ad. The basic idea is similar to the "internet offers" made famous in the social games industry (sign up for Netflix and get 50 gold FarmVille coins), but less scammy and much more straight forward. Users sign up for an ad network and get cold, hard cash for watching video ads.
This is very interesting. And much more so because in the early nineties, Bill Gates predicted that something similar would happen with spam and email - advertisers would pay users if they opened and read commercial messages.
As with most futuristic predictions, even if the details of the idea were incorrect, the general idea was in the right direction.