Incentivized Marketing - An Updated Look

Over the years, I've written a fair number of articles on the incentive space. If you read the previous entry on the Intersection of Those that have known me for many years, will tell you that I am bullish on incentive marketing but long on the current methods. The challenge, as anyone in the performance marketing space can attest, is finding the right balance between value to the user and media profitability. Those in the incentive space do not have the luxury to run unprofitable, well-funded entities. They must make every impression count, and in that quest towards recouping their media cost, companies and their affiliates have pushed the envelope and been willing to treat the medium as a short-term model without proper consideration for how it will be perceived outside of their stats.

Overview
Lots of companies use incentives. The free or heavily discounted mobile phone with activation is a classic example. The biggest difference between how it is applied in the traditional sense and the incentive promotion model is that the connection between actions is more tenuous here. Users know the implied price of the free phone (activation) but they do not know it as concretely when clicking on an add for a "free prize."

For those not so familiar with the mechanics of the incentive promotion model on the internet, here's a quick overview.

1. The Ad - it will have a strong call to action and/or engagement. For display ads this means interactive games - Outrace the bear to get a free prize - polling, and quizzes.
2. The Landing Page - the landing page historically is the first step in the funnel. It looks to get users by presenting a low-hurtle such as email address or zip code. When companies work with affiliates, they use this page as the action on which they pay, e.g. $1.50 per email submit or zip submit. Over time, as the process has grown more sophisticated, that number rose from $.25 to $1.50 per submit. The focus now is no longer on payouts, which have stayed flat, but on uniqueness of the offer - what premium is used to capture the user and how well they can convert the user.
3. Postal Data - after the landing page, users are asked for their contact information - name, postal, and phone. They use the lure of the premium offer to try and entice accurate data entered, i.e., "Tell us where we should send your prize." It's also the data that most every other offer in the flow will require, so having it up front also helps in reducing the effort required for users to complete the real money makers.
4. The Survey Path - perhaps the most contentious component, the survey has offers that users do not need to fill out in order to earn their premium. Especially with lead generation offers and even more so with inexperienced advertisers unaware their offers will be placed here, they find themselves disappointed at the leads they receive with phone reps who call on the data expecting to find an interested user finding one with little to no interest in their product. This isn't always the case, but a body of data supports that it happens frequently. The Survey Path is a major point of breakage too; it can be 100 questions long, often requiring users to at least view one offer, and it means that many will abandon the process before the incentive offers themselves.
5. The Incentive Wall - this page contains the offers that allow users to earn the premium that drew them in to funnel, whether directly (such as "Get a Free...") or indirectly (such as quizzes and polls). The size of the premium determines the number of offers a user must complete. If the prize has a small monetary value, a few offers will suffice. If it is great, then it requires many along with the controversial requirement that other households do it as well.)
6. Redemption - if users complete the process, they must still jump through one last hoop to claim the prize.

Here's another way to look at the process. For each step, we see how much time the user must invest in a certain step and likelihood that either through confusion or frustration they depart the process. Like rebates, there is a high correlation between breakage and where the company earns its money.

Step	Time	Breakage
Ad	Low	Low
Landing Page	Low	Low
Data	Low	Low
Survey	Medium	High
Incentive Wall	High	High
Redemption	Medium	Medium

A Platform
Incentive promotion marketing is in many ways brilliant. Its not an ad but a platform. It's a model for tapping into user interest and turning whatever that interest is into customers for other companies. The problem of course is that the interest that brought them to the page in the first place often outweighs their interest in the companies from whom they become customers. That's when you hear from users and advertisers about instances of "I just wanted my iSomething."

Something Old. Something New.
This post started because of my fascination for the evolution of the incentive model. The platform is still the same, but the techniques have evolved. The main driver is still the same, commercial intent, but be it regulatory scrutiny, media competitiveness, or the biggest one, Google, incentivized marketers continue to do what they do best, test and tweak, continuously trying to find ways to get traffic in a market that makes it harder and harder. The most recent example doesn't quite qualify as Incentive Promotion 2.0, less groundbreaking and more an exercise in being more thorough with greater up front investment than the typical templatized landing page.

Here's the ad I saw:

Gas Locked in at $2.49
AGRP locks in gas prices at $2.49, Saving Americans Hundreds
www.radiogasdeal.com

Note: I changed the links in the ad so don't feel bad about clicking :) Also, the offer, which runs on the RadioGasDeal.com domain name, does buy radio time to support their marketing efforts, leveraging Google Radio if I had to guess. I heard one of the ads in an NYC taxi.

A visit to the landing page below shows a much more official looking page than the standard incentive site. Mediazone, the proprietor, is far from the first to play on high gas prices for incentivized marketing, but they are the first that I've seen to think outside the $500 gas card box.

This is the first half of the landing page, and that it doesn't fit completely on a larger monitor also speaks to it not being the standard look and feel; the header has that USA Green Card offer feel though. It's a lengthy, text filled landing page, and my favorite part is the charts to add to its legitimacy, one of them being a custom designed graphic describing the incentivized marketing process along with a huge GasBuddy.com powered map of prices by region that looks like a weather map. Certain portions of the text show that they learned from Chrysler's Let's Refool America and the intriguing and MyGallons.com.

Confirming availability, i.e., entering one's zip takes you to the less salesy data collection page, again aided in its legitimacy by real time information from Gas Buddy, or perhaps the useless but mentally soothing lock icon next to the email field.

The remainder of the process starts to resemble the standard flow used in the vast majority of incentive offers. Completing the data collection step will take you to the Survey Path.

Like ad serving, most companies will outsource the survey path and in many cases the incentive wall as well. The Survey Path is a key component to the profitability and requires a strong sales force, some above average technology, and as important, operational expertise. It's not overly difficult, but it is very easy to do poorly. That's why only a handful will operate the path themselves and for the past three years at least, there has been a small but healthy market for providing an outsourced Survey Path.

Navigating through the less than simple Survey Path takes the user to the Incentive Wall. Here.

When compared to many others, the MediaZone America's Gas Relief Program is a well-executed site and perhaps even a step in the proverbial right direction for incentivized advertising. Does it try to play on current pain points? Absolutely. Revolutionary? No. But, as mentioned earlier, there is a greater level of investment than the standard templatized Free XYZ*. And that is a something I like to see and something I think bodes well or the reputability of not just this site but the model.

The same issues still exist around user quality and intent. The vast majority of the internal offers viewed by the user do not assist with actual fulfillment. Yet, without that breakage, the sites would have a hard time buying profitably. This is a major issue, and so long as it exists, the model will continue to generate friction from advertisers, users, and publishers.

Comments

[free market research]

what is the advertising model for web 2 social networking sites

[Josh]

While it provides more info, this ad clearly still deceives consumers with the idea of "locking in $2.49"

[Online Degrees Man]

Jay-

What do you think about companies like trial pay? www.trialpay.com

---
Thomas - I'd like to know the conversion, i.e. enrollment rate, of businesses like Trial Pay. I do think though that they are much cleaner than typical incentive sites as the link from the incentive to offer is more direct. What I'm trying to say by that is that the way I understand it, the user is filling out a smaller number of offers in order to fund what they are really interested in. I think the issue with current incentive tactics are the prize values which force users to have to convert on offers they have no interest in. But, if they only need to fill out one or two (and lower value ones like lead offers versus credit card / continuity offers) then you stand a chance at their picking your offer because of some interest. Ultimately, I'd say it's about parameters. I'd limit my exposure and not be an offer for any product that required over a certain number of offers (say two).

[Millie Edmonds]

Please help me. I had an offer from netblue to apply for a Discover card and receive a free airline ticket. I did so, and received my Discover card and have used it and I hear nothing of a free airline ticket. Can you help me or point me in the right direction? I called Discover and they told me to contact netblue.
Thank you very much.

[Make Money Online with Affiliate Programs Blog]

Good form of marketing this using incentives..