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Despite the controversy over the use of CPA offers in the virtual goods market, the business of offers continues to grow.
In an effort to innovate and differentiate itself, relative newcomer gWallet is combining offers with online video. With success, it claims.
gWallet, which is the latest ad company started by serial entrepreneur Gurbaksh Chahal, ran a campaign for 10 brands in December. The model: in exchange for watching videos that were made available through the "offer walls" that appear in social games on popular social networks like Facebook, users were rewarded with points which can be used to purchase virtual goods, just as they are rewarded with points for completing traditional CPA offers.
According to gWallet, these video offers deliver results. The company claims that in its tests, viewers were engaged longer, even though they weren't required to watch videos in their entirety to receive the points. gWallet cites a video ad promoting the History Channel’s Ax Men TV series that was part of its campaign as an example of the type of performance achieved. Users exposed to the video ad through gWallet watched the video ad for much longer than users exposed to it through comScore's Top 250 Sports Sites.
According to Chahal, the outcome of gWallet's campaign "proves that we’ve opened up a brand new opportunity for monetization in social gaming".
So should more brand advertisers looking to get the most bang for their video advertising buck turn watching their ads into a CPA offer? I'm not so sure. While the results reported by gWallet sound promising and brands shouldn't hesitate to experiment, I think brands need to be careful. While there may indeed be acceptable ROI available here, turning "viewing my ad" into an action worthy of a CPA payout is not nearly as straightforward as paying for an action that has a tangible return (eg. a new paid subscription).
In my opinion, gWallet's video offers really employ the same model as the good old pay-to-surf programs such as AllAdvantage that were so popular during the .com bubble. That model: pay consumers for their attention. That's not necessarily a bad thing (consumers are rewarded in some fashion for their attention) but paying for it in cash or virtual currency can often distract from the actual viability of the ads because it's not always clear whether the message is well-crafted and well-received. After all, a direct payment can mask the natural signals that come when an ad truly resonates and makes it harder to trust traditional engagement measurements.
In short, as brands look to take advantage of new advertising opportunities that the virtual goods market introduces, they should remember that the goods are virtual, but the money isn't.