Commentary

Startup Pays Consumers To Look At Ads, Finds Supply Outstrips Demand

One of the most interesting and refined startups I’ve come across in the burgeoning “rewarded, opt-in” advertising marketplace is a nifty app called Dabbl, which pays users a 5 cents credit per completed engagement. When users accrue $5 worth of value, they can redeem it for a gift card.

The venture was founded by a Grey Advertising alum and former Catalina Marketing executive, Susan O’Neal, with deep knowledge about consumer promotion and loyalty marketing. Dabbl is all about testing, learning and delivering the best ROI possible for both sides of the marketplace: consumer and brands.

It’s also one of dozens, if not scores of startups trying to crack the new post-advertising “attention economy” based on rewarding or compensating consumers directly for their engagement. Instead of paying third parties -- media or technology platforms -- to reach their audiences, these ventures are trying to prove there is a viable economic rationale for paying people as their own first-person media.

advertisement

advertisement

“We don’t think of it as paying consumers, so much as consumer partnerships,” O’Neal told me recently, as part of several interviews I conducted,  asking her to explain the Dabbl model and what she has learned and how she has adapted to date.

Fundamentally, she says the rewards or payments are less about compensation in the strictly labor sense of the word, and more about a signal that brands respect the consumer’s time and attention.

Interestingly, she says she was inspired when she went through a divorce a few years ago and realized that the most valuable relationships she had were based on the trust and transparency she had with the friends and family that helped her through it. She created Dabbl to see if she should replicate that model between consumers and brands.

“I thought, I’ve been in the business of cultivating trust and loyalty between consumers and brands for most of my career. But if I used the same tools and tactics and strategies I used as a marketer in my personal life, I probably would not have any friends,” O’Neal recalls, adding: “I think everybody in the industry could have that moment and just stop compartmentalizing themselves as a marketer and themselves as a human being, it would be helpful.”

After a beta in 2016, she initially deployed Dabbl as part of the loyalty and rewards program used by grocery retailer Shoprite -- a relationship that continues -- before going direct to mainstream consumers.

Dabbl just celebrated its first year of general release, and while O’Neal would not disclose what here installed base of active users explicitly is, she indicated it is in the six figures and continues to grow. She also learned that the biggest impediment to growth is not finding quality consumers who want to engage with brands, but finding enough brands that want to engage with them.

It’s a classic chicken-and-egg conundrum shared with similar ventures that need to achieve scale among users willing to trade their time and attention with brands, before brands are willing to scale marketing budgets to reach them.

“Right now, we’re still challenged to bring five to 10 [engagements] to our audience each week,” she explains, adding: “They’re saying they want 70 to 80.”

While O’Neal continues to iterate Dabbl’s model as she learns from brands and consumers, the paradox is understandable from a consumer point of view, because at 5 cents per engagement, it takes 100 engagements before they can earn and redeem a gift card.

In terms of the economics, O’Neal says the value exchanged to consumers is more of a consideration than something qualifying as wages for labor. The average Dabbl engagement lasts about 35 seconds, which would equate to earnings of $8.55 per hour. While that’s slightly higher than the $7.25 U.S. minimum wage, O’Neal says the earnings are less the point than the fact that consumers feel valued and respected by brands that reward them for their time.

From a brand’s perspective, Dabbl’s cost is the equivalent of a $50 CPM, but O’Neal says it’s not right to think of them as classic impressions-based media math, because each of the engagements is a completed, attention-based experience.

O’Neal, like others in the burgeoning rewarded, opt-in advertising marketplace are aware that many marketers still have an aversion to what they consider “incentivized” ad models, but she says that mindset has been softening -- especially as companies like Dabbl prove the ROI and yield of direct-to-consumer attention in an increasingly cluttered and non-transparent media marketplace.

“We’re still learning what the right economics are. We started at 35 cents (per reward),” O’Neal said, noting that other models like AdWallet are paying consumers 50 cents per engagement.

“It’s not going to be a good audience if we allow this to be people’s full-time jobs,” she says, adding that there nonetheless is a tremendous amount of potential economic value to test and learn from.

“If you look at the $1 trillion U.S. marketers spend each year, it works out to about $8,000 per U.S. household. There’s a lot of value to be recouped by [consumer] and brand in a more direct exchange.”

10 comments about "Startup Pays Consumers To Look At Ads, Finds Supply Outstrips Demand".
Check to receive email when comments are posted.
  1. Jonathan Hutter from Northern Light Health, September 24, 2018 at 11:27 a.m.

    I don't know about anyone else, but "testing, learning and delivering the best ROI possible for both sides of the marketplace" sounds like a lot of double speak for ad fraud.

    How about this one? "If I used the same tools and tactics and strategies I used as a marketer in my personal life, I probably would not have any friends."  Is she saying that if she paid her friends $.05 per engagement she'd have more friends? Anyone want to go out for a drink tonight? "For a nickel I will."

  2. Joe Mandese from MediaPost replied, September 24, 2018 at 11:39 a.m.

    Interesting inferences @Jonathan Hutter. So you interpret testing, learning and delivering ROI as "double speak" and "ad fraud?" How so?

    re. using tactics and strategies in personal life, if you read the story, Susan O'Neal was talking about "trust and transparency," not paying friends 5 cents per engagement. 

    Apologies if I did such a poor job of writing this column that someone would infer those things, but that is not what O'Neal told me or what I thought I was reporting.

    Thanks for posting this comment so others who might have interpreted as you did know that is not what was intended.

  3. Jonathan Hutter from Northern Light Health replied, September 24, 2018 at 1:51 p.m.

    I'm paying someone .05 to watch my ad and engage. Let's use the example of the urgent care ad shown here. As that client, I'm seeing all kinds of engagement on my advertising. But if I'm the consumer getting that .05, when I really need the service, what is my decision tree? "I got paid .05 to go to that company's site so I should use it?" Or "I need urgent care, I'm going to find a close, convenient provider who has a good reputation?"

    If Dabbl is selling those .05 engagements as a measure of marketing effectiveness, they're pulling the wool over people's eyes.

    As long as we're on that subject, how are they protecting against engagement bots that can ring up .05 engagements by the hundreds per second?

  4. Joe Mandese from MediaPost, September 24, 2018 at 2:46 p.m.

    @Jonathan Hutter: You sure like posing "ifs." I suggest you download the app and experience it yourself: http://getdabbl.com/

    The engagements all differ, but the one you're citing for the urgent care brand, includes a combination of branding and some user testing too.

    In terms of the benefit to the consumer and it's impact on their "decision tree," I could ask the same about any other form of advertising: It's just a means of getting someone to pay attention and consider something. What you do with that message -- the thing you want consumers to consider -- is the most important part.

    But most advertising rewards consumers at some level, even if it's just sponsoring, subsidizing or underwriting the media content the ads run in. Some of it is more explicit than other reward models. Dabbl's is extremely explicit, but that's its point. Maybe it's time to be explicit about value exchange. It literally is the opposite of trying to pull the wool over someone's eyes.

    But I could understand why people new to the concept might see it that way.

    Specifically, regarding the value exchange for marketers, Dabbl has plenty of its own research supporting its claims of marketing effectiveness. I chose not to cite them in my column, but you can download them here

    https://brands.getdabbl.com/mediakit/

    Personally, I think they are very transparent int what they are doing, and part of that is being honest about what they know and adapting when they learn something new.

  5. Susan O'Neal from Dabbl, September 24, 2018 at 4:51 p.m.

    Jonathan, your fears are not at all uncommon, and u checked they are making our industry worse - furthering the alienation of consumer and brand. In order to turn around the current state of affairs we brand marketers are going to have the trust the people whose trust our marketing dollar is supposed to be earning. Because of the way modern advertising evolved, lots of people believe that buying Sally’s attention from Google delivers more authentic attention than if they were to buy it directly from Sally herself. What does that tell you about how we think of Sally? What do your own comments say you believe about your own consumer? They say you don’t think she is trustworthy. 

    In reality, the consumer is the most trustworthy person in the whole media supply chain - especially if you make the process of engaging simple and easy and not at all “gimmicky” (in other words, completely transparent). Further, if you allow for authentic responses within your experience - that’s what you will get. If after spending 30 seconds with your brand message, you allow the consumer to tell you they’re not interested - they will. Finally, it does have to work for the advertiser - the transparency goes both ways in a marketplace or an exchange. We bring as much transparency to the advertiser as we can so they can know 1) who is the consumer they are transacting with 2) what effect did the experience have on the consumers feelings about the brand, the message, their purchase intent 3) what did the consumer actually do after the experience (beyond self-reported data). 

    As for fraud, there are many things we do to ensure we don’t have bots instead if buyers. First, we don’t pay cash - we pay in gift cards. A fraudulent minded person (or bot) would have to go to a lot of extra trouble to realize value for their efforts. Second, the engagements the comprise an experience are viewable by the advertiser in real time as it is live. It’s much easier to fake impressions and clicks, than conversations. Finally, the registration process itself would require a bit or fraudster to go through a lot of effort to perpetuate fraud across multiple devices. Again, much easier to fake web or mobile web impressions and clicks. 

    I hope this helps open you mind to the possibilities behind the value of partnering with consumers. For sure we don’t have all the answers, but we are committed to finding them and figuring it out for the good of all of us who love both the art and the Science if marketing and advertising.

  6. Nat Guy from Dabbl, September 24, 2018 at 6:05 p.m.

    Thanks Joe for the thoughtful article and thanks Jonathan for the q's. I work on the Dabbl team and for whatever it's worth, will throw my 2 cents in.

    Re: the bot fraud question, Dabbl knows ad fraud is a serious problem facing traditional ad delivery. One of the great benefits of offering people explicit value is that requiring greater verification is possible.


    Dabbl has various systems in place such as authentication processes that go well beyond the anonymous or cookie-based views for most ads -- and even goes beyond email-based authentication -- to verify authenticated, registered humans. This can include verified phone number, unique device id and other verification checks and monitoring.

    As far as treating consumers as you would want to be treated, we see that people appreciate  1) brands sharing their ad budgets directly with them versus all of it going to others 2) they tell us they like having their opinions heard 3) they tell us they like the user experience a lot, that it can fun and quick 4) they like having the control to choose when to view ads versus the alternative which is to be interrupted 5) and some enjoy this format for discovering new products.

    You can see more of what users say here: https://brands.getdabbl.com/audience/thanks/ 

    And yes, they also say they want more brands to spend time with.

  7. Jonathan Hutter from Northern Light Health replied, September 25, 2018 at 4:50 p.m.

    Susan, what my comments say is that I don't trust the digital media ecosystem, and I don't trust consumers that I have paid a nickel to do no more than interact with my ads for 35 seconds. All attention is transient, so paying for that attention does not make it more valuable. Unfortunately, digital ads are still filler IMO. Each product category has to have its way of deeper engagement, through media or otherwise.

  8. Jon Carmen from SimpleFund, September 26, 2018 at 3:24 p.m.

    Great article Joe, thanks for writing about this topic.

    @Jonathan Hutter

    There are several reasons why incentivized advertising works and actually brings more ROI to an advertiser than a Display Ad. Regardless of whether you are for or against online advertising.

    I will list a few here

    1) Ad Blockers 
    Yes, Ad Blockers are more a symptom of the online publishing ecosystem but Ad Blockers hurt both publishers and advertisers. For an Ad Blocked Impression, publishers give their content away for free without being compensated and advertisers in many cases have wasted impressions for that same impression. Without their knowledge advertisers can have their banners covered or blacked out during each Ad Blocked Impression, but still, be charged. Wasted money and impresson on both sides. There is plenty of research out there on this topic here on Mediapost.

    2) Bots and such
    It is said that over half of online advertising impressions are fake. In my last company where I ran an ad network, I can tell you first hand this is a real and difficult problem. Every time you plug one "hole" others pop up. Billions of dollars are wasted each year on this.

    3) The Online Media Food Chain
    Looks something like this:

    Advertiser > Agency (fee) > Internal Agency Trading Desk (fee) > Brand Safety Protection Wrapper (fee) > DMP (fee) > Exchange (fee).  I am probably forgetting a few more.

    So along the way the Brand advertiser has taken $1.00 worth of advertising and received at most $.50 worth of advertising. That is of course before the wasted Ad Blocker and Bot Dollars. 

    At the same time, is a coupon for $.50 off a box of cereal, fraud too?  That is literally the same thing, paying a consumer to interact with the brand.




  9. Carl Spaulding from Nielsen Catalina Solutions, October 8, 2018 at 12:22 p.m.

    Joe -- I think you got the headline backwards.  Susan says

    “Right now, we’re still challenged to bring five to 10 [engagements] to our audience each week,” she explains, adding: “They’re saying they want 70 to 80.”

    So demand is outstripping supply -- not vice versa

  10. Joe Mandese from MediaPost, October 8, 2018 at 6:49 p.m.

    @Carl Spaulding: Interesting that you took it that way.  I guess it depends on how you define supply and demand. In the case of Dabbl, we were defining supply as the supply of people willing to trade their attention with brands, and demand as brands willing to acquire it. But I can see how you might see it the other way: demand from consumers and the supply of brands.

Next story loading loading..