Net advertising revisited

Net advertising revisited

Melbourne-based software developer Cybersource has introduced a new technology and business model, which CEO Con Zymaris claims will be able to resurrect both content providers and advertising on the Internet.

Called Pico-Pay, the technology is essentially a micropayments gateway that sees advertisers pay content providers indirectly for the amount of time Web users spend viewing ads while seeking content.

Zymaris came up with the business model and developed the necessary technology after noticing a worrying downturn in Web content in the last 18 months. Companies that offer content for viewing or download, and companies that offer free services such as e-mail or calendaring, have found there is no viable business model outside banner advertising, which has suffered from doubts over click-through rates. As such, many free Internet services are shutting down, and many news content sites are moving to a subscription model to cover their costs.

Zymaris sees the answer as micropayments, but not in its traditional form. The original concept of micropayments is that end users would pay a micropayments provider a certain amount of money for credit in an online currency that they could use at e-tailers, or for various content and services on the Web. Each time they use a service or view content, a small amount of credit would be deducted from the micropayments provider and passed onto the content provider.

This model failed dramatically as there were several competing forms of Internet currency (Beenz, for example), none of which managed to take off. The problem, according to Zymaris, was that the consumer was still forking out dollars for the content and services but there was only ever a limited amount of content providers that were compatible with that micropayments system for users to access.

Pico-Pay is a variation on the theme, using the free-to-air television and radio model that has proved more viable. Using Pico-Pay, the majority of the content on participating Web sites is given away free. However, for premium content or archived content, for example, the content provider asks for a small payment per view.

But rather than users pay, the user is simply directed by a link to a window that displays advertisements relevant to the type of user that content would normally attract.

Such advertisers would expect viewers to spend a certain amount of time browsing their ad before allowing a small monetary allocation for a successful transaction. The advertiser pays Pico-Pay for the time the user spent viewing the advertisement and Pico-Pay then forwards that amount, minus a small service fee, to the content provider. The user gets to access the content free, only after accumulating the prerequisite monies needed by the content provider.

The model allows content providers to earn real money for their services, while for advertisers it provides a guarantee that they will "get eyeballs" for a certain period of time. At the same time, Web users do not have to enter any personal data that could be used for unsolicited marketing. The user can remain completely anonymous - the advertiser's only knowledge of the user is that they intend to consume that specific form of content or service.

"There is nothing complex about this, but as far as we know there hasn't ever been anything like it," said Zymaris.

He said the model is much more effective than existing micropayments systems or banner advertisements. Both advertisers and content providers are able to hold Pico-Pay accountable for the activity on their sites, by accessing Pico-Pay's logs and comparing those figures with the logs on their own Web server.

Pico-Pay is now looking to team up with organisations that want to be paid for their content and advertisers that want a better alternative to banner advertisements. "It's a pretty novel idea so we are going to start with a free three-month trial," Zymaris said.

"We want feedback from potential advertisers, content providers and end users over these months to see if this is an appropriate model."

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