Wednesday, October 15

Brother, Can You Spare Some KinzCash?

I've been thinking a lot about micropayments lately. Back in Dotcom 1.0, it was lauded as a sure thing to drive the success of the Internet. It was essentially the Long Tail of e-commerce = paying minimal fees for accessing content or services online. Which, over time, would add up to real big revenue for the companies providing it.

Dotcom companies tried all types of micropayment schemes = digital tokens, points, microwallets, etc. In the end we got Paypal, 99 cent iTunes, and affiliate marketing kickbacks via Amazon.com "buy this book" referral buttons.

But I have noticed the reemergence of micropayments in a most unusual place: kid-focused virtual worlds such as Webkinz, Club Penguin, and Neopets. The focus of these sites is accumulating virtual stuff for your virtual pet/avatar. This includes virtual houses, furniture, clothes, food. In order to purchase it, you need to accumulate virtual money. This is primarily achieved by playing online games and performing other tasks within the site. Most of these only reward you with a few points/cash at a time.

You have to play a bunch of games, or complete a bunch of tasks, in order to actually purchase something substantial (in a virtual kind of way). Similar to collecting tickets at a carnival or Chuck E Cheese. After 3 hours of mindnumbing games, you then can get that cheap stuffed toy from China that will fall apart before you get home.

We are training a whole new generation of consumers to accept micropayments as a way of life online. Only this time -- in a bit of e-commerce role reversal -- they are the ones getting paid. Which in the next 10 years could lead to a whole new online marketing platform.

Marketing to kids in these environments is really tough. Unless you happen to be a provider of essential nutrients and vitamins. But soon these consumers will grow up and start accessing sites where you can market to them without getting sued. Will they be willing to watch your branded online video for a few Paypal coins? Click your banners and rack up points to get real stuff? Spend 3 minutes on your brand website and win their girlfriend an exclusive virtual unicorn for her Myspace page?

Google AdSense and affiliate programs already have marketers comfortable with spending micropayments of their own for ensuring consumer action. Can't wait to see what happens when consumer microrewards and marketer micropayments finally come together.

1 comment:

Sean said...

Having been there from the beginning, as you say "Dotcom 1.0", the first of these that I find myself really using (besides Paypal for the odd ebay item) is iTunes app store. Rather than concern myself with a credit card charge for every $.99 iPhone app, I buy myself a gift certificate for, say $50, and then grab any app on a whim.

Essentially it's like a Chuck E. Cheese in my palm.