"You won't see this on TV," Barry Soicher, CEO of AdPerk told me as he fired up his demo. AdPerk is a company that helps magazine publishers make more money, by putting its advertisers' videos in front of readers and potential subscribers. Readers also get paid (after a fashion) to watch the vids.
From the user's perspective, it works like this: on the magazine's Web site, you're given a pitch to "Watch and be Rewarded." You're presented with a collection of videos, and can select which ones you want to watch. You earn credits for watching. On the Dwell magazine site, for example, advertisers include Rheem furnaces, Delta faucets, and so on. Their promo videos are short -- 30 seconds to 2 minutes -- and you get one credit for each 30 seconds you watch. These credits are then applied to your Dwell subscription. Six credits (three minutes) is good for three issues of the printed magazine.
I used to work with Soicher at Red Herring. He's a canny salesman. And it looks like he's created a salesman's ideal product: a good deal for all parties.
Users get content they likely are already interested in (if you're reading Dwell, chances are you have an interest in high-end appliances). They also get a nice payback on their time: a free subscription extension for 2 minutes of watching videos you like is not bad. Also, there's no onerous step to earn the credits. There's no blocking of content (see Ultramercial), quizzing, or anything awful like that, although you do have to enter a Captcha at the end to prove you've played the video through.
Advertisers get a very good outlet for promotional videos they already have. That's key -- AdPerk is not recommending that advertisers create new vids for their products. Most big product companies have promo videos sitting around that aren't getting in front of potential customers. The economics may not work for putting them on the Superbowl, but putting them in front of people who are already self-selected as potential customers is a good idea.
And it works for the publisher, who gets to increase involvement with readers and nab new subscribers for very little extra money. Subscribers who have demonstrated that they will exchange their time for a subscription are the kind of readers publishers love. AdPerk programs are also new products that ad sales people can use either for revenue or as giveaways to sweeten an existing contract.
The key to AdPerk's success will be the three-way balance of the equation. It will fall apart if the cost/payout model becomes unpleasant for any party: if you have to watch too much video to earn your reward; if the individual videos are too long; if the advertiser has to create new videos; if the publisher offers cut-rate subscriptions (as many do) that are easily found elsewhere. But AdPerk's first customer seems to have the relationship tuned nicely. I'll be curious to see if this product can be used as deftly by others.