Creating Virtuous Cycles

Posted in: Advertising, Blog, Loyalty, Monetization, Virtual Currency on November 24, 2009

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So often in highly competitive marketplaces competitors find themselves in a race to the bottom.

This is certainly true on the Internet for both publishers and advertising networks. For publishers the name of the game is getting as many eyeballs looking at your site at the lowest cost. For advertising networks it’s about creating a profitable margin between the publishers who are constantly getting pitched better rates and advertiser’s who are always looking to cut their payouts.

With some notable exceptions, the eyeball, the actual user of the site, gets lost in the equation. We think the publishers who create the best and most interactive user experiences should be rewarded. Aligning advertising rates with the interactivity of a publisher’s user experience is the challenge that we, here at BigDoor, are working on right now.  We like to call this the Loyalty Economy.

Rather than racing to the bottom, we want to be involved in helping our publisher’s race to the top. Racing to the top is about creating win-win-win monetization strategies that reward user loyalty and participation, rewarding interaction between publishers and users and building on that relationship to create value for trusted advertisers.

Recent events have amply demonstrated that when values are improperly aligned online advertising can become a vicious cycle of manipulative and deceptive advertising begetting poor user experiences begetting cynical and manipulative users.

If values are properly aligned then trusted advertising should beget better user experience which begets engaged and happy users in a virtuous cycle – a mutuality of value for everyone involved in the process.

–Patrick Murck

The Real Value of Virtual Currency

Posted in: Blog, Loyalty, Monetization, Virtual Currency on November 21, 2009

There has been a lot of talk recently about virtual currency, and rightly so.  Points based systems took off in Asia years ago, and as is often the case the U.S. is just now catching up.  It is our thesis that rewards (points, virtual currency, coins – whatever you want to call them) lie at the heart of a shift that is going to substantially alter the online entertainment industry.

The Challenge

There is a well documented macro trend under-way in U.S. consumer behavior as it relates to how we entertain ourselves.  People are shifting their time from more traditional media (Newspapers, magazines, CDs, television and theaters) to the online world.  Whether part of the cause, or in reaction to this move – the online world has built an amazing entertainment infrastructure within just the last few years.  We’ve invested countless millions into in systems and content in order to make sure that users can be connected, entertained and can even personally express themselves in this exciting new world.  We’ve improved the experience and are making the online world a truly great place for massive consumer entertainment.  The problem is we are still using offline models for monetization.  Until recently, in-content ads (that nobody wants to click on if they are in “entertainment mode”) and subscription models were the only two significant monetization methods employed by online entertainment related properties.  But a new model is coming, and if we are going to make the online world a sustainable and healthy ecosystem for consumer entertainment, we have to embrace and evolve our methods of monetization to match these new experiences.
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U.S. Virtual Goods Revenue Poised For Growth

Posted in: Blog, Virtual Currency on November 5, 2009

Today’s chart of the day from The Business Insider.  Virtual goods and the revenues derived from them are exploding.

The Great Debate Over The Exchange Economy

Posted in: Blog, Offers, Social Media, Virtual Currency on November 3, 2009

The BigDoor team has been watching with great interest the massive debate that Michael Arrington kicked off last week when he publicly blasted some of the practices of the large offer platforms.  He then followed that ambush up with a scathing report in TechCrunch.

All we can say is, well done Michael!

Well, maybe that’s not all we can say.  A few more thoughts on the subject.

Our founders have more battle scars than we ever cared to earn from public debates of this nature, and as a result we’d like to think that we’ve learned a few lessons along the way.  Here’s a few pointers we’d like to offer for no charge at all (virtual or otherwise) to the players in this debate:

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