In an efficient ad marketplace, the top keyword usually goes to whoever can spend the most money on it, normalized for conversion. Who can afford to spend the most money? Unfortunately, it’s not always the company with the best product, service, or price; under pure laissez faire advertising, it can be the company that tricks, lies, and steals more pennies out of each customer than any competitor. This often forces ethical competitors to make a very tough choice: roll over and stagnate (or die), or play a similar game. Playing to win means staying microscopically behind the red line or breaking the rules and not getting caught.
Let’s keep that as the backdrop as I tell a sordid story about lead generation on the Internet.
If I told you that you can get over $700 worth of stuff for $29.99, you’d probably be interested. But you’d also likely think there was a catch. And there is — but in this case it’s a good one: The net proceeds of that $29.99 are being donated to the American Cancer Society.
TheBigBundle is a site put together by TrialPay. Basically, they rounded up a bunch of tech companies (and some non-tech ones) and got them to offer some good deals to people who made the donation. So you’ll get things like, a free month subscription to Skype Unlimited, 6 months free of TripIt Pro, $25 off Everynote Premium, a $5 coupon to Threadless, 3 months free of Dropbox Pro, $50 off 23andMe, and a bunch of other stuff.
San Francisco based TrialPay will announce a $12.7 million second round of financing tomorrow, which brings them to $15.8 million raised in total. They tapped European money for the round, bringing in London based Atomico, as well as previous investors Index Ventures, Baseline Ventures and Battery Ventures.
The service provides users with an alternative payment method at 3,000 or so participating merchants. Instead of directly, users are offered something for free (such as free calling minutes on Skype) in return for buying a magazine subscription. Another example – “If a customer isn’t quite sold on a software title, he or she could get that software for free by sending flowers from FTD.com, signing up for Blockbuster Total Access or buying $50 worth of clothes at Gap.com. TrialPay pays for the software using revenue (CPA) from the advertiser, and the customer gets a free license.”
We first covered them at launch in October 2007. Buyers are presented with the alternative options at the time of checkout, so they can choose to just pay as normal or take one of the offers. It’s an easy option for merchants to accept, since they get paid anyway. The question is, will consumers use it enough to make a real business out of it? I’m doubtful, but that’s mostly because we’ve seen a trail of dead bodies who’ve tried to create alternative payment schemes. People seem to like their credit cards just fine, and can smell a marketing gimmick a mile away.
TrialPay says they’re adding 15,000 new registered users per day, though, with 5.2 million total. Maybe people aren’t so good at smelling those gimmicks after all.
Maybe you want to try Skype-out, but don’t want to be saddled with paying for unused minutes if the “VOIP revolution in telephony” isn’t your thing. Well, Mountain View-based TrialPay will let you get a 3 month trial of free minutes by buying something on eBay or participating in any of 129 other partner offers.
The Skype deal is just one example of TrialPlay’s ongoing promotions to help services make some money, while hooking new users and advertisers gain customers from trying something new, while paying for something familiar. The company is working with over 1,500 businesses to let users “pay” for their products by participating in an advertisers program, which range from buying a subscription to the Economist, to trying out anti-wrinkle cream.
While TrialPay CEO Alex Rampell can’t say how much Skype is making off their offers, he did say that “for most of our merchants, we are yielding between 10-100% in incremental revenue. A company like Skype might make $80 on a consumer not willing to buy their $8.85 calling plan”. He went on to say “Skype now yields significant revenue for Staples.com, because people shop at Staples.com in order to get Skype credits for free”. Conceivably, users not willing to buy Skype may be willing to buy enough from Staples to actually generate more revenue than Skype’s purchase price. He made no qualifications about how commonly the over-achieving offers occur, though.
But businesses do have some control over how potentially lucrative the deals are. They can set a minimum acceptable price “MAP” for the revenue generated by offers customers can use to “buy” your product. While it make sense to set the minimum at the price of your good, digital goods can maximize their profits by selling more at a lower price. Regardless of the price, TrialPay always orders the offers in a profit maximizing order based on expected total revenue, with the most lucrative deals at top.
