TALKING TECH

For the past few years, experts have argued that the key to future online business models no longer lies in traditional advertisements and banner ads. Obviously it isn’t enough to throw up a simple website and expect revenues to pour in from Google Adwords and selling adspace. However, by employing creative use of advertisements, digital companies can still generate profits from a dying monetization technique.

Two separate companies that I believe should be working with each other are CaptchaAd and FreeAllMusic. Both companies have employed extremely creative uses of advertisement-based business models and seem to almost complement one another.

CaptchaAd is a German based company which recently won second place at Intel+UC Berkeley’s 5th Annual Technology Entrepreneurship Challenge. In case you don’t know, a Captcha is a challenge response test used by many websites to ensure that the response isn’t generated by a computer.

It’s essentially a security check to prevent spam and you’ve probably filled out many of them while signing up for different websites. CaptchaAd has creatively played on the idea of a Captcha by replacing the common “word spelling test” with a video advertisement. They obtain sponsorships from companies and play video advertisements which then ask the user a simple question about the video in order to let the user “pass.” For example, if Coca-Cola paid for an advertisement, CaptchaAd could play a video of a kid drinking Coca-Cola while playing soccer and then the Captcha question at the end of the video would be something like, “What sport was the kid playing?” By doing this, CaptchaAd still helps prevent spam by ensuring that the user is a human while effectively forcing the user to be more attentive to the video advertisement since they need to answer a relevant question in order to proceed with whatever they were trying to do.

FreeAllMusic, which will be open to the public in late January, is a website that acts as the Hulu for music. By first watching a 15-20 second advertisement clip, users will then be allowed to download any song of their choice for free, with no restrictions to sharing or copying. The company is literally freeing all music by solving the main problem of piracy in the music industry. Rather than having to seek illegal ways to download and share music, users can simply spend a few moments of their time watching an ad. When a user chooses an ad to watch, the company in that ad will pay for the song in a form of “micro-sponsorship.”

You can probably see where I’m going with this. Imagine a partnership between these two companies where CaptchaAd essentially forces users to watch the ads and answer correct questions in order to proceed to the music downloads. This way you don’t have people who minimize their screens while ads are playing and then open the screen 30 seconds later to download the song.

Advertisement-based business models aren’t dead. Companies who don’t employ interactivity and creativity are.