• by February 7, 2002

“Consumers are either going to pay with their time or their money.” That’s the quote I fully endorse and have freely touted for a while now. The “death of FREE” has essentially forced publishers and providers to monetize their offerings, and instead of accumulating eyeballs they’ve had to shift their focus and attention to accumulating revenue (there’s a revelation!)

On the one hand, we’ve seen an abundance of services either disappearing or being replaced with some kind of apologetic fee-base. The free ISPs immediately come to mind here. In this case, I have to take my hat off to AOL, who in the wake of the free ISP onslaught, stuck to their guns and even raised their prices. Worse still for these freebies, was the fundamental marketing faux pas of continually back-peddling with conditions, clauses and small print. Forget marketing 101; think kindergarten: once you give, you can’t take back!

On the other hand, we’ve seen the dawning of the age of full screen advertising. No prizes here for seizing the inevitable in a timely “apples to apples” comparison between online and traditional media: one message to one consumer at one time.

But it doesn’t stop there. If only it were that easy to leave it at a binary pay-per-view vs. in-your-face outcome. In reality, this is just the tip of the iceberg as far as our journey towards the New New Business Model is concerned. The pay (and get no advertising) or don’t pay (and get a slew of advertising) extreme approaches are not only oversimplified, but indeed are potentially hazardous to our industry’s health. Think about the message it sends out. Paying to eradicate advertising doesn’t make me too motivated to get out of bed in the morning to reach those cheapskates that cover the bottom of the barrel. Furthermore, we need only look as far as print media in order to find a common ground in which both can survive.

And what about the hybrid models, or the innovative ones that truly attempt to marry push-based communications with pull-based subscription services? In this vane, I’d like to throw out the endorsement model. Think of a subscription service, which has a set monetary fee. As far as the consumer is concerned, there is a tangible value proposition associated with this offering. Now, if a brand was to offer to sponsor the said service or “endorse” the transaction in return for being exposed to a communications message, then not only would the message be associated with perceived value, but more importantly there would be value exchange, which would constitute an economic transaction.

We’ve seen signs of this on the Net in the past. Perhaps the best application of this approach was Priceline’s utilization of this concept, whereby subscribing to a magazine or applying for a credit card would elevate – and strengthen – a given bid for an air ticket.

Finding a harmonious balance between pay-and-display is going to be critical in order to forge a clear path ahead, in which both marketers and consumers have a fighting chance to survive in cyberspace.

The flipside is equally true and important. Over the weekend I turned to Mapquest to help me out with directions in and around Connecticut. The driving directions came up in a flash, with email, print and download to PDA options to boot. The price? A glorious zilch! This is just as disturbing to me. Was there advertising on the Mapquest pages? To be honest, I couldn’t tell you…and I’m in the business! This is one of those cases where advertising in its most raw and most traditional form is horribly out of touch in a focused and functional context.

An endorsement twist would work wonders here. One large screen ad per set of driving directions seems fair to me.

So would an incremental pricing model. A quarter (25 cents) per set of directions is well worth it as far as I’m concerned. In fact, I actually feel really bad getting so much value for nothing in return. We need only mlook towards mwireless in order to get inspiration and mdirection. Monetizing trivial ring tones directly to a wireless account is so effortless; why then can’t we do the same for our travels on the information highway?

This prompts me to append my original quote ever so slightly: “Consumers will either pay with their time or their money for value.” And that’s not just good business sense; it’s common sense.

- Joseph Jaffe is Director of Interactive Media at TBWA\Chiat\Day in New York, where he works with clients including Kmart, ABSOLUT Vodka, Samsonite, Embassy Suites and Cunard. His primary focus is to highlight interactive's value and benefit in meeting his clients' integrated business and branding objectives.