Prestige for Sale

Ty Amad-Talylor, founder and CEO of FanFeedr (a real-time personalized sports feed), made the rounds last week with an article he wrote about the rise of prestige as an online monetization model.  Another damning article about the value of today's CPM, making the case to replace the ad model with alternate payment platforms based on some sense of social hierarchy.  But in reality, new mechanisms such as this also create yet another way to place relative value on a user that will ultimately translate into back into ad $.

The basic idea is a platform for users to earn online recognition for their ability to achieve a certain level of online status for which they can be awarded virtual goods or currency, live in infamy on some leaderboard somewhere (Pac-Man, anyone?), or amass all kinds of neat "badges" to broadcast their achievement on Facebook, Twitter, Hi5. You might earn status or accumulate virtual goods on social gaming sites or by participating in sports, financial or political predictions. I don't really dig the idea of virtual currency, nor do I think it's particularly effective (some folks at SecondLife might disagree with me), but as a measure of user value and an open door to new revenue streams,  prediction markets and leaderboards could provide a new platform for online content publishers to drive up engagement numbers, connect more organically with social, and drive additional ad revenue. That's right, drive additional ad revenue.

As I said about paid content, just because there is another form of currency exchanging hands, do not assume you will be immune from advertising... engaged users, those that participate in this level of exchange and value the associated prestige or access, are that much more valuable to advertisers.  If you find value in it, they will too. Gone are the days where advertisers buy exclusively on demographics. Your HH income does not necessarily translate into value these days (tell us about it, right?). Your behavior, your engagement with a product, the level of value you place on their content or service, translates back into value to the advertiser.

So I say, great... open up as many online revenue streams as you can. But don't walk away from the ad model exclusively in search of a paid path. You need a balanced approach, using one to build on the other.