Eccles to The Dollar: The Entrecard Credit Exchange Rate

Speaking of adventures, Entrecard has decided to take the plunge and attempt to establish the long promised ability to exchange Entrecard Credits (hereinafter eccles) for your local currency, presumably via PayPal. The details are still being worked out, in classic Web 2.0 fashion, via great outpourings of angst over issues both real and imaginary, but the central question "How much per eccle?" has yet to be answered. Let's see if we can't make an educated guess.

In an earlier post on PTC sites, I mentioned that clickworkers were paid an average of $0.0025 per click, and that earning $30 per month was an achievable goal - although at $1/hour, not a particularly interesting one. Now Entrecard isn't directly comparable to your typical advertiser-funded traffic exchange, it really is it's own beast, but I think these rates do set something of a floor. The very fact that Entrecard is a unique hybrid is a strong motivation to both charge superior rates and make superior payouts.

Well I just mentioned the key to unlocking the exchange rate mystery. The exchange rate is going to be advertiser funded, so the exchange rate value will depend strongly on the price Entrecard can charge for ad views, i.e., on the cost per thousand impressions, or CPM, that Entrecard can charge advertisers. So what sort of price can Entrecard charge? Social networks, as a category (Facebook, MySpace, etc), sell most of their ad inventory at a price under $0.25 CPM, or rather that was the rule of thumb for the 4th quarter of 2008. You've probably noticed that global economy has taken a hit of late, and advertising spending is no exception. With more ad inventory seeking fewer dollars, the rates have been pushed even lower. On the other hand, the megatrend of advertising budgets shifting from traditional media to the internet is still in full force. Advertisers love the demographic targeting and immediate feedback they get from the web.

So $0.20 CPM? Maybe in some categories, but I don't think that is initially achievable across the board, for a couple of reasons. First, that's the sort of rate that Adbrite is achieving with its similarly disparate network, and Adbrite has a very sophisticated pricing system that pays publishers anywhere from $0.01 - $0.20 CPM depending on the quality of their traffic (in particular, the click-through rate or CTR). Entrecard doesn't have that sophisticated pricing system in place and won't for a while yet. In addition, a good chuck of Entrecard traffic comes from in-network power droppers who are generally ad-blind. Not quality traffic, as far as advertisers are concerned. So I think $0.10 CPM is a fairer average estimate, particularly since it is difficult for new ad networks to sell 100% of their inventory for the first few quarters at least.

So then at $0.10 CPM, and the quoted 40,000,000 ad views per month, that's $4000/month, with a promised 75%, $3000/month or $100/day allocated to eccle purchase. To clear 1-2 million eccles per day from the Entrecard economy (another stated goal), an exchange rate of 10,000-20,000 eccles to the dollar is required.

Hmmm, something's gone wrong here. A power dropper can earn 600 eccles an hour in drops plus 400-600 eccles in reciprocal drops. At 10,000 eccles to the dollar, that yields just 10% of the baseline $1/hr, $30/month clickworker wage. This is comparable to, say, Adgitize, but earnings of $3/month for a 125x125 ad space is strong motivation to investigate alternative networks like Performancing Ads, Project Wonderful, CMF Ads, and so on. A common expectation for the exchange rate seems to be around 1000 eccles to the dollar, but this would require an average CPM of $1.00, which doesn't seem realistic to me - even those obnoxious pop-up ads don't pay $1.00 CPM. So even if the opening exchange rate is 1000 eccles per dollar, I can't see it being sustainable. I'll certainly be happy to be proved wrong.

Regardless of the sustainable exchange rate, these are exciting times at Entrecard, and I for one wish them the best of luck to them as they try to make the transition to a going concern.

Get Paid To ... (GPT)

I mentioned paid to click (PTC) and paid to read (PTR) sites as a money making option in my last post. These are more generally referred to as "get paid to" (GTP) opportunities and include get paid to ... sign up, search, and post, as well as some more innovative ideas. MsFit has a nice sampling of current such opportunities at:

• http://cashquests.blogspot.com/
  

I haven't been able to bring myself to sign up for any PTC sites, but you can get a good feel for the current state of the market by reading the discussion forum:

• http://www.talkptc.com/
  

As JB mentioned, the average wage is $0.0025 per click. Many sites advertise "up to" $0.01 per click, but actually have many ads (to click) at much less than the average. The average number of paying ads to click per site is around 10 per day (I saw as low as 4, and as high as 65 mentioned), for a grand total of $0.025 per day. There seem to be somewhere in the neighborhood of 50 at least somewhat legitimate sites, although judging from reports at Talk PTC, sites south of the top 30 have an increasing chance of simply ceasing to exist one day along with any accumulated earnings. This is particularly irksome as most have minimum payout thresholds (e.g., $0.50-$10.00, average $2.00).

So, a particularly diligent clickworker, clicking every ad at each of 50 sites every day, could accumulate, say, $1.25 per day, or $37.50 per month. Even at, say, an hour a day, this is not well paid work. Many sites pay a commission for referrals (e.g., 5%-100%, average 15%), so someone with 7 referrals, each just as diligent, could perhaps accumulate $75 per month (note that this would not exceed the minimum payout threshold when averaged over the 50 sites).

The site owners make money by selling clicks to advertisers and upselling the clickworkers. Some clickworkers upgrade to paid memberships in order to earn more per click and other bonuses, including higher commissions from referrals. It seems that seasoned clickworkers do in fact buy these upgrades from the longer-lived sites.

Advertisers tend to be affiliate marketers and the like. With "splash" pages designed to get the viewer to click for more information in the under 5 seconds of attention that they've bought. I can't imagine buying this sort of advertising myself, particularly because of the persistent issues that the PTC market has with your "viewers" ending up as bots.

To sum, I'm not sure even the site owners are getting a reasonable return on their time investment. All but a handful are constantly changing ownership. I personally don't think that even the $75 month scenario is achievable. It is one thing to have your downline signup at 50 sites, it is another to have them reliably visit each of those 50 every day for $1.25. Maybe if some thousands of people had already paid you $49.95 for the priviledge of being allowed to signup as part of your downline on these sites ... but that is a post for another day.