Paidvertising is derived from “Paid” and “Advertising”.

Traditionally consumers have been bombarded with advertising on TV, Radio, Internet and mobile and have never been offered the chance to be compensated by the brands trying to reach out to them, unless they consume what the advertiser has to offer.

Paidvertising offers both the consumers and marketers a good way to interact with each other. The concept is based on the principle that the consumer must be compensated for consuming advertising (especially if it draws on their time and energy) and the advertiser attempting to reach its target audience would be happy to compensate as long as the ROI makes it compelling. It is envisaged that the consumer would be happy to offer some of his/her details and preferences in order for advertisers to correctly target them and the advertiser would get better ROI owing to the fact that the consumer has specified what he wants to be sold and what is not of interest. There are privacy issues here but as long as this is managed through an independent party, it can be nade useful and relavant for both the consumers and advertisers.

Get Paid to Receive Ads

More companies could in future be paying consumers to receive their advertisements. Take the business model of New York-based SpiralFrog.com or India based YouMint.com.

SpiralFrog.com, backed by music giant Vivendi Universal the company plans to compete head on with Apple by offering its subscribers ‘free’ music downloads. The company will charge advertisers for their commercials but reward subscribers with free downloads as long as they first listen to the ads. Advertisers could easily build-up a profile of each owner and know exactly which commercial has been delivered to whom and when. They would also know what music has been downloaded, which may give some indication of the user’s mood at that time a marketers dream with little need for investing in much further survey research.

YouMint.com on the other hand offers monetary compensation to its subscribers for receiving SMS and emails.

A recent study by Harris Interactive in the US showed that only seven percent of mobile phone users were very/somewhat interested to receive promotional text messages, provided they were relevant (meaning the consumer determines which messages he or she may be willing to receive). In come financial incentives: the willingness to accept commercial content increases to 25% if in return the user gets some free mobile phone applications. YouMint will be capitalising on this concept by offering cash to the consumer.

A major brewing company successfully tested this model in the UK a couple of years ago. A panel of young men were signed up to receive SMS advertisements (such as ‘Isn’t it time you bought a last round of Brand  X’) half an hour before Pubs’ closing time in return for free minutes on their mobile. Similarly, a leading TV company offers ‘free’ video clips of major news items via their website but viewers have to watch a commercial first with no facility to skip or fast forward to the actual clip.

Word of mouth marketing also uses the same idea. Companies offer selected consumers their products free of charge to turn them into brand ambassadors who in return will chat, write and blog about these offerings to the wider community.