A Quarter Buys Media Headlines or 1/3 of a Click

31 08 2006

Liz Gannes at Giga Om has a great observation that pretty much mimicked my thinking after seeing numerous headlines in not one, but two Web 2.0 related blogs I follow for breaking start-up news.

Both bloggers made a huge deal (as did the resulting comments) about Guba’s affiliate scheme to pay $25 for 100 referred users. You have got to be joking me! At first, I was a little shocked because I thought it was 25 cents per visitor but, no, it’s 25 cents per registered user – a monumental difference if you believe any of this permission marketing hooey.

That works out to 10 million users for $2.5 million. Presuming that we’ve got a system that doesn’t pay for fraud (something affiliate marketers deal with regularly), you’re looking at mass market numbers for a fraction of the big market VC money that’s funding these video plays – fully ignoring any monetization returns that might be expected.

For anyone out there in the affiliate world, you know that affiliate programs can often pays $0.75 to $1.50 just for an e-mail address, $3 to $8 for an e-mail address and (gasp) a mailing address and the sky’s often the limit for sales, subscriptions and the like. It’s not up to me to determine whether these are fair numbers. But I do know that true affiliates won’t be sending traffic to Guba for the money.

I think this is just really an example of two different worlds. The Web 2.0 crew thinks that YouTube crowds falls out of trees and the marketing crew knows that it doesn’t matter what you pay, so long as it works out in the long run. What boggles my mind on the Web 2.0 side is that paying for users is so taboo that the fact that the sheer cheapness of the program is what probably will make this scheme fall on its face is being ignored. As Liz said, PEOPLE, IT’S A QUARTER!

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