Posts Tagged convenience

Incentive Based Advertising

Posted by on Sunday, 6 November, 2011

With traditional media, such as a television show, an advertiser has very few ways of convincing a consumer to help him advertise his product. Humor is typically one of the few effective methods, as a consumer who watches a dancing frog may call his friends over to see the commercial. It is much easier for a Web marketer to offer an incentive to a consumer, because he can give a consumer a cut of the revenue.

The main problem with this advertising method is that the Web marketer usually makes a very small amount of money when the consumer shares his ad, so he can only offer a small reward to the consumer. If the marketer offers the consumer ten cents to watch a minute long commercial and share it with his friends, this deal is not very attractive. This is effectively a pay rate of $6 an hour, and the consumer is giving up part of his free time to help the marketer, so a better incentive is necessary.

One type of incentive is to offer a reward that the consumer does not perceive as cash. Many online games that are free to play use this feature. If a consumer can watch a commercial to get a new dragon slaying sword, an in game sword can appear more attractive than an offline dime. This can be especially effective if other players have used their credit cards to purchase in game advantages, so a consumer who has less disposable income, such as a college student, cannot simply buy the sword with his own bank account.

Marketers have recognized the importance of this concept to green business. Many environmentally beneficial actions are relatively cheap, but they are difficult for a consumer to conveniently perform. For example, planting a tree is easy if you live in a rural area, but it is difficult if you live in a city, even if buying an individual seed costs almost nothing.

Clean Technica reports that this problem has been solved by the web site Click it For Good. Basically, if you help promote a green business, the green business will perform an action such as installing a wind turbine or planting a tree. Another benefit of this method is that a consumer can easily make a fractional contribution. A wind turbine costs more than a dime, of course, but if 100,000 people click on a link, the business now has $10,000 to pay for its turbine.