Spot.Us Experiments with User-Directed Sponsorship Revenue

In some ways, it seems like a no-brainer: Encourage consumer engagement with advertising by giving users a stake in deciding how the revenue gets spent.

As far as I can tell, though, Spot.Us is breaking some new ground with the “community-centered advertising” feature it rolled out Tuesday.

In brief, here’s how it works: Answer three questions posed by a Spot.Us sponsor, and you’ll earn a $5 credit that you can assign to any one of the site’s user-funded stories.

In fact, the arrangement doesn’t look much like online advertising — no banners, no tiles, just a simple three-question survey. Implicit in the approach is that a relatively small number of engaged users — engaged enough to answer a few questions about the advertiser’s product or cause — can be more valuable than many more users who may or may not notice whatever message the advertiser delivers via a traditional ad.

The new feature adds a fourth choice to the Spot.Us navigation. As reflected in buttons at the top of the site, users can start a story, fund a story, read a story and — now — earn credits. That’s pretty understated from the point of view of most advertisers, and it reminds me of the “underwriting” model employed by public radio and TV.

I tracked down Spot.Us founder David Cohn by phone for more details.

Cohn, who launched Spot.Us in 2008 with about $340,000 from the Knight Foundation, has been anxious to find a way to add advertising to the site’s mix of grants and user contributions.

So when he was approached with an offer of $5,000 from an outfit called Mortgage Revolution, he decided to turn it into an advertising experiment instead.

Mortgage Revolution is a start-up that sponsors conferences for mortgage brokers and donates its profits to charity, according to its website. Cohn said the firm told him that Spot.Us could use the money for whatever it wanted — perhaps to fund a story involving some aspect of real estate. Cohn wasn’t comfortable with that kind of story-funding approach, but he figured he might be able to find another way to use the money.

As he thought about it, he said, he realized that the idea of user-funded journalism doesn’t necessarily mean that the money itself has to come from users, “but that it has be under the control of the community.”

So rather than decide on his own how to allocate the $5,000, he turned the decision(s) over to Spot.Us users — to 1,000 of them, each with the chance to direct $5 to the story of his or her choice.

Cohn sent an e-mail to about 3,000 recipients of the Spot.Us newsletter Tuesday. Within the first few hours, more than 150 had answered Mortgage Revolution’s questions and earned $5 in credits.

I spent last fall exploring user-first ways to pay for news, but I didn’t come across any ways of involving users in advertising that are quite as simple as what Cohn describes: “Our budget — your decision.”

Now that he’s launched version 1.0 of the experiment, Cohn says he has two questions:

  • How long will it take to get 1,000 people to get involved? As he points out, “It takes a lot of energy to get 1,000 people to do anything that requires even the slightest bit of concentration.”

  • Will another advertiser be game for round two?

Cohn said he believes this approach to advertising may be especially appropriate for “cause marketing,” noting that a foundation that wants to raise awareness of homelessness, for example, could engage users with several questions on the topic and invite their suggestions for addressing the problem.

In an April 1 post introducing community centered advertising, Cohn acknowledged that “we may find that the Spot.Us community [will] react negatively” to the idea.

As he said Tuesday, though, Spot.Us itself is “an experiment in transparency and control of money” for news. “This is just a matter of applying it to advertising.”

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