Free Diapers and the Future of Incentivized Marketing

It turns out that you can learn a lot from an offer for free diapers. For us, that journey into free diaper land helped cement a belief surrounding the email submit space – that not only is there continued consolidation but that the barrier to entry for those wanting to make money by sending traffic to email submit offers continues to increase in both difficulty and investment. Gone are the days of simply grabbing a link and buying keywords. Gone are the days of a quick and dirty jumper landing page. Welcome to the days of development, having to invest in a site that must stand on its own, or at least pass for one that could. This means a longer product development cycle and one that requires access to some slightly more technical resources. Taking a step back, the email submit space starts to resemble a more normal offer development cycle, where success means not nearly as much work as managing the email submit offer but enough to make people think twice about where they invest their time.

We are at a very interesting point in time with regards to incentivized advertising online. The state of the email submit offers might suggest the end of an era for incentivized offers, but as is already widely known within the performance-based marketing community and just now beginning to be better understood outside of it, incentivized marketing is far from dead. It’s growing, and that is thanks to an unanticipated intersection between social media and incentivized offers. We are talking about the managed offer platforms, those which help game developers monetize their games through turn key virtual currency systems. For whatever reason, when presented with a threshold for obtaining certain items within the game, users will pay, and that can be with their time (more game play), wallets (payments), or through the completion of offers. And requiring them to pay hasn’t hurt the growth of the games at all. Some even argue that the installation of payments has only increased game play by adding a value to what could have been an otherwise free game.

The discussion of incentivized marketing within a social media context tends to focus on the usual topic of incentivized marketing – quality. Users who chose to complete offers in order to earn the points necessary do so not for their interest in the product but the products overlap with their interest in the game. While a valid argument and one that doesn’t have an answer yet, in many ways trying to gauge quality within the social media context is like trying to measure the ocean’s depth with a thermometer. You can’t do so because you have the wrong tool. Incentivized marketing via social games doesn’t resemble incentivized marketing in the email submit landscape. If it does, that is not a reflection of the virtual currency world. It is a reflection of the preexisting incentivized infrastructure. This infrastructure works well enough with respect to tracking offers from click to completion and awarded some redemption to users who do so. However, this infrastructure is not suited to maximize the specific type of user that comes through the games. These aren’t people who just happened to be surfing and clicked on an ad. They aren’t someone looking to get something for nothing. These are people looking to do something to get something, and that’s a huge difference. Not only that, but the number of interactions and opportunities available to sell are so much greater than in the email submit approach.

Users looking for virtual currency want to give up something to get something, but what are their options? They are stuck with the end offers that run across all incentivized sites, those from the offer wall (see bottom of article).
We went through the rather tedious process of analyzing the offers on a typical offer wall, i.e., where offers completed actually count towards the redemption of the prize. What we found is that these offers for the most part suck. A typical offer wall has roughly 50 unique offers. That might sound like a lot until a) you realize that a person must complete 10 (15% to 20% of all available) of them for a typical prize, and b) you look at what they really are. Of the 50 unique offers, you have less than half that are truly unique. There is Blockbuster and Netflix for DVD rentals, Privacy Matters, CreditReport.com, and FreeCreditReport.com for credit monitoring, and, so on. By the time you group like offers, you’re lucky to have 10 that someone would complete. By and large, with the addition of a few lower end offers that couldn’t make the wall and mobile offers that have greater success with a younger crowd, those making their money off incentivized ads – from users, to networks, etc. – have little from which to choose.

It takes a special type of advertiser to work in the email submit / breakage model. But, the games offers a much more rich opportunity that right now is like a square peg and a round hole. If they continue to try to make do with the offers meant for another model, they will ultimately fail. The virtual currencies have a chance to do some great things, and many could involve just their time. These people playing have time on their hands. Put them to use. Have them watch stuff, sort stuff, etc. Gambit is trying to do that, and OfferPal is about to unveil an entertainment related collaborative that goes above and beyond the typical approach. These are just two examples that have yet to scale, but again, users want to participate and users like brands. They will gladly watch trailers, give their input, even interact with branded goods. This ecosystem can supports thousands of advertisers not the fifty or so today. To do so it must shake off the stigma associated with email submit, a model that is fine, but doesn’t represent all of incentivized marketing.