September 05, 2011

Marketers often think of advertising as a tradeoff for consumers: People watch ads in exchange for free or subsidized content. Consumers may understand this, but still sometimes feel annoyed or bored by ads they encounter each time they turn on the TV or launch their web browser.

But some digital ads are now explicitly incentivized. For example, a brand may sponsor a social game, and make a reward of virtual currency contingent on watching a display ad. These incentivized ads, research from digital advertising technology company SocialVibe and KN Dimestore found, can be very effective.

A summer 2011 study exposed web users to incentivized ads, and found that nearly half interacted with the ads because of the incentive—but ended up paying attention to the brand. Nearly one in three said they paid equal attention to both, and 12% interacted because of the brand. Fewer than one in 10 study participants said they interacted with the ad only because of the incentive.

In the consumer packaged goods (CPG) category, the chance of a web user visiting a brand's website after exposure to such an ad climbed by a dramatic 161%. Participants were also considerably more likely to look for the product at the store, purchase the product and—especially important in the CPG category—choose the brand over its competition.

Earlier research from lucid marketing found that incentives could boost the propensity of online moms to tell their friends about a product or brand. The offer of a coupon, a charitable donation or even something without any tangible value, like social currency or a gaming power-up, could help get ads noticed, passed along and acted on.

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