March 1st, 2007
We’ve all seen this ad… it loudly proclaims “Punch the monkey to win a free _____”, fill in the blank with whatever is new and out today. A ps3, an xbox, maybe even an iphone (which hasn’t even been released yet). It’s perhaps one of the strangest phenomenons of online advertising, and I have yet to meet a person not in the industry who understands how these make money.
So lets look at an example I just saw on myspace.com:
So, if I hit this monkey ten times, I’m going to get a FREE PS3!!! OMG that’s awesome, I’ve always wanted a ps3 (or not.. had it been a ‘free wii’ ad I would have been much more likely to click)! But wait… someone told me once, “There’s no such thing as a free lunch.” Ok, so what’s the catch? Somebody is paying somebody here right? And how can I possibly get a ps3?
So, lets walk through the ad and follow the money. First, we gotta hit the monkey (kind of fun actually). GOT HIM!
Ok, so this takes me to http://onlinerewardcenter.com/rd_p?p=154103&t=528&c=12814-ps3_728_monkeygame&a=, where I see that I actually have a CHOICE of the free gift I can get… life is getting better! Now, at this stage, no money has exchanged hands yet. Publisher hasn’t gotten paid, and advertiser hasn’t made a penny.
Now entering in my zip on this page takes me to the next page which is some sort of registration form:
Ok, seems harmless enough. Why don’t we try filling this out? Before we do, lets take a look at the ‘terms and conditions’ (conveniently hidden at the bottom of the page). Hrm…
By participating in the programs offered on the Site (each, a “Program”), you signify your express consent to receive information from Company in electronic format. You will need a computer with browser and Internet access to receive such electronic records. Electronic records may include terms and conditions, agreements, privacy policies, Gift redemption voucher(s) (each, a “Gift Redemption Voucher”) and other items.
Translation — We can send you any email we like if you fill out this form.
Translation — We will be sending you a lot of email/regular mail since you just agreed to it
Well, that doesn’t seem too bad. This is the first interesting piece. By filling out this form, you are now ‘converting’ on the very first step of this offer, namely, providing personal information. As you can see from the terms and conditions, this company is going to (with your consent) sell your personal information to various marketers. If you do continue, expect to see a large increase in the amount of email you get — ok… lets be honest, spam email, as even though you consented and opted-in to this, it’s not the type of email you’ll be reading. So how much is this information worth? It really depends on who you are and how much info you provide. Last I heard, an name and email address was worth about $1.00, whereas full registration information (address, phone, etc.) was worth more like $2.50 – $5.00. So if I fill out this form, somebody is going to make a couple bucks!
Ok, well, I REALLY want that FREE ps3, so lets do it! I can handle a bit of ‘bulk email’. So, what do we see now:
Surveys? I don’t want surveys, I want my free PS3!!! Ok, skip this.. it says I must answer truthfully to get my free PS3.. Ahhh… it just keeps asking me these questions!!! Where is my free PS3?
Ok, lets take a look at the Program Requirements. How many questions do I have to answer??
2. For this promotion, Playstation 3, you must complete a total of 10 offers as follows: Page 1 – complete any 2 offers; Page 2 – complete any 2 offers; Page 3 – complete any 6 offers to get your gift. [...] If you do not correctly, and fully, complete the number of Offers required on each page, you will not be entitled to a Gift. If you have any questions, please contact us.
I have to complete 10 offers? Holy shit. What’s an offer? Well, after finally getting through the survey, I get to ‘page 1′ of the official offers, and they aren’t the kind of thing to sign-up for on a whim. I see Netflix, Blockbuster, a Discover card? (who has a discover card anyways?).
Ok, so lets get to the point, can I get a free ps3? If so, what’s the catch, and who gets what?
The offers that this marketer has are all pay-per-lead based. For example, one of the offers I can signup to fullfill my requirement of ’10 offers’ is a Netflix subscription. Netflix probably pays somewhere between $50-$100 for a new user, bam, marketer makes money. Other offers are credit cards, book clubs, and a whole assortment of random stuff. For every ‘offer’ that I sign up for the marketer makes money. If I actually do go out and fill out 10 offers I’m guessing the marketer is making between $300-$1000, depending on what I signup for. How much is a ps3? Exactly, the fact is, even after sending you a ps3, they still make money! Not to mention the money they make from selling your personal information and from all the users that only completed one to nine offers and didn’t fully complete the process.
Interestingly enough, the advertisers behind the offers don’t mind this at all. There are ample choices of offers to choose from, which means that if you signup for Netflix in an attempt to get a ps3, you’re probably somewhat interested in Netflix already.
Is it worth it? Hell no. Most offers are subscription based, which means that once your’e done with this whole process and get your PS3 you have to go back and cancel all 10 before you get charged up the a$$ in fees. I would personally just spend an extra month or two saving and go buy the damn thing in the store. Although — If you do go through the process, at least go for the free wii =).
So why do you see so many of these offers when you browse the web? As you read above, the payout happens early in the process, when you giveup your personal information. This is a very easy thing for users to do and many do it without realizing what they’re signing up for, and hence, these offers can pay high CPMs. Also, since there is no ‘marketing budget’ here, the money will simply keep flowing as users continue to signup.
There is also a good lesson here for more ‘traditional’ marketers. There can be huge value in a user’s personal information. I’m not saying to go out and start selling it, but instead of aiming on getting users to signup for your deal directly after clicking on your ad, why not start by just asking him about who he is and what he likes? You can then easily send more information or retarget the user (more on that later) in future campaigns. The less impulsive the purchase, the harder it is to get someone to signup.
Interested in reading more? Wired has a great article here.
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