Digital Thoughts: Micro-Payments and Online Marketing
by Sam Harrelson
Micro-payments are nothing new. They have been tried on
pay-per content models in the past and have frequently been
hailed as a way to turn browsers into consumers. However, a
developing trend is the growing resurgence of the model,
primarily from its popularity in the online music download
business. This has many repercussions for online marketers,
ranging from the download/desktop media space to
advertiser’s new taste for product placements within content
and areas that are not ad-intensive in revived pay-per
content models. Along with this, the entire micro-payment
model is undergoing a renaissance as direct response
marketers seek to make use of new technologies and consumer
friendly applications (such as RSS) that has the possibility
to cause a great change in how successful online marketing
is done.
Specifically, Bitpass, and technologies like it, has the
potential power to re-shape the manner in which we sell and
consume many things online. These technologies essentially
provide the ability for merchants to charge a small amount
of payment due from a consumer in exchange for a small
quantity of product (such as a single song) that would
otherwise be sold either as a package at a higher cost (such
as a CD).
The advantage to this is easily seen in the large amounts of
traffic, buzz and publicity that Apple’s iTunes is receiving
for its $.99 a song offering. Luring consumers away from
services like KaZaa and Limewire, iTunes has successfully
entered permission as a quotient into the download-a-song
market and has record labels and artists scrambling to be
included or have specials featuring a specific band. Many
new releases also coincide with a new exclusive offering
from the artist on iTunes.
However, is there room for the average online
marketer/advertiser to make a profit in the world of
micro-transactions? The answer is yes. Technologies such
as Bitpass offer consumers a chance to sample and/or buy as
much of a product as they see fit, rather than having to buy
something at a higher cost which can be a deterrent if a
consumer is unsure of its value to them.
For example, a great new site called
Mperia is getting
"street-cred" in the indie world for its anti-establishment
take on music selling. For just $0.25 a song using Bitpass,
visitors-turned-customers can purchase music from
independent artists who otherwise would have to go through
avenues such as Amazon that require hefty up-front payments
for placement.
Mperia also has another interesting feature that's pertinent
to the world of online marketing and consuming... a visitor
can actually syndicate a tracklist. Features like this are
breaking down barriers between consumer wants and what
advertisers/marketers can give them.
Sites such as Mperia using RSS and micro-payments are making
giant leaps in giving consumers access to information and
media that they want in a way that they can afford. Don't be
surprised to see more and more of these sites in markets way
beyond music as affiliates (and advertisers) begin to pick
up on the benefits and revenue potentials that are
available.
There are rippling affects throughout the online industry
from the popularity of these pay-per-download sites.
Companies who specialize in the download/desktop media space
from once dominant peer-to-peer sites like Kazaa and
Morpheus are faced with decreased impressions as more
consumers continue to flock to the micro-pay applications
like iTunes. As a result, advertising space is slowly being
eaten away and creating a loss of what was previously an
abundant space for online marketing. Advertisers are also
finding favor in product placements within pay-per-content
or micro-pay avenues, creating a loss of previously
plentiful avenues for publisher placement income in this
sector of the online direct response world. With the
popularity of TiVo and DVR technologies off-line driving
advertisers to consider adopting more product placement
media into their campaigns, will there be an increase in
online product placement through the micro-pay,
pay-per-download or pay-per-content from advertisers who
previously spent a great deal of cash in our space?
However, marketers in our space can still learn a great deal
from these examples because they present a profitable
long-term value curve for both producer and consumer. By
giving consumers a sample, or letting them have a small
amount of product before committing to buying a larger
amount, or more smaller amounts, advertisers could make
fuller use of the promise of direct response online
marketing.
Sam Harrelson
is the Co-Editor of the Digital Moses Confidential. Send comments and questions
to sam@digitalmoses.com
