Should You Pay Customers to Watch Your Ads?

Last Updated Jun 8, 2011 10:21 PM EDT

Viewers of a new Pepsi Max ad can receive a coupon for a 20 oz. bottle.
It used to be the only person you had to pay to get your advertisement seen by customers was a media company, like a TV network, radio station, or newspaper. But after years of digital media disrupting the old model of advertising, a new model is starting to emerge: paying customers to watch your ads.

The difficulties of advertisers are well known. The Internet--from YouTube to Twitter to TMZ.com--has given customers unprecedented media choices and made it much harder for advertisers to reach them in large numbers. When an ad does reach us, customers often skip it with a flick of our TiVo button. Or they tune it out entirely, not even noticing the blinking banner ad on the side of Web page.

This is why "incentivized viewing"--rewarding viewers to willingly watch an ad--is emerging as a new, and potentially quite effective, way to reach today's audiences. And no, this doesn't mean you'll be wasting your budget to have teenagers in Mumbai stare at your ad spot, collecting pennies per view. Incentivized viewing usually offers rewards, points, or coupons to customers instead of cash. It can be easily targeted to reach high-value audiences. And it can get customers to not just watch an ad, but to interact with it and share it with others.

Six trends are driving the emergence of incentivized ad viewing:

1. Demand for "quality" online ad-views outweighs supply. The Internet has produced a glut of ad inventory for those who care only about raw "impressions" (no matter if your ads show up on the junkiest "content farm" webpage). But for brands that care where their ads appear, who is watching them, and if they watch all the way through, there are not nearly enough quality ad-views to meet demand.

2. Works across traditional and digital. Incentivized viewing is not just constrained to PC based web viewing. It can work across mobile, tablets, and even traditional television. Yahoo's IntoNow app was developed for audiences to chat about their TV watching with friends, but now has become a platform for incentivized ad viewing. One example: view a new Pepsi ad and "check in" via IntoNow, and you receive a coupon for a free bottle of Pepsi Max.

3. Targeted, high-quality viewers. Incentivized ad viewing can be targeted by geography (e.g. US only), by gender, by age, and likely soon by keywords and interests (just like Facebook display ads already are). Popular video site Hulu.com already allows viewers to indicate which ads they find "relevant", in order to serve more targeted ads over time.

4. Opt-in views are hugely valuable. Traditionally, advertising has been all about interruption. No one chooses to watch it, and they often get up from the couch when ads come on. Incentivized viewing generates audiences who have consciously chosen to let an ad play, and it has been measured with up to 90% completion rates by Web viewers.

5. Opportunity to engage beyond the ad. Incentivized viewing can also gives viewers the opportunity to share, respond, or interact with the ad once it is finished. Advertisers using the Jun platform got 3-5% of their viewers to opt-in to social interaction after watching the ad (shares, tweets, Facebook "likes", email, comments, and ratings).

6. Virtual currency & social gaming. Facebook and mobile apps have given rise to a huge phenomenon of "social gaming," like Zynga's Farmville. Social games are played by huge audiences (100-200 million by some estimates) with diverse demographics (typical player is 27-year-old woman). They also thrive on virtual currency, used to buy things in-game. Giving audiences virtual currency in their favorite games can be a perfect reward for incentivized ad viewing, and one that will reach a huge and attractive audience.

Digital marketing is increasingly about broadening the brand's toolkit beyond the just advertising. But many marketers (e.g. a mass market brand like Pepsi) still can see a high ROI from placing an effective ad in front of a large audience, whether via TV or YouTube, FM radio or Pandora.

Given trends in customers' digital behavior, advertisers may increasingly find better results when they offer viewers incentives--to ensure their ad is reaching the right people, is actually being seen by them, and is leading to further interaction, sharing, and word of mouth. For customers, it's nice to feel your time and attention is finally being rewarded.


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David Rogers examines the five core strategies of successful networked businesses in his newest book, "The Network Is Your Customer: Five Strategies to Thrive in a Digital Age." He teaches Digital Marketing Strategy at Columbia Business School, where he is Executive Director of the Center on Global Brand Leadership. Rogers has advised and developed marketing and digital strategies for numerous companies such as SAP, Eli Lilly, and Visa. Find him on Twitter at http://twitter.com/david_rogers
image courtesy of flickr user, Extra Ketchup
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    David Rogers is a consultant, speaker, and author of The Network Is Your Customer: Five Strategies to Thrive in a Digital Age. He teaches Digital Marketing Strategy at Columbia Business School, where he is Executive Director of the Center on Global Brand Leadership. Rogers has advised and developed marketing and digital strategies for numerous companies such as SAP, Eli Lilly, and Visa.