Could Activist-Style Micropayments Be a Real-Time Ad Model?

Despite the huge impact that PayPal and online micropayments in general have had in unleashing web-based commerce, much of its potential has yet to be unlocked, particularly in the context of the real-time web.

The Huffington Post seemed to wake to this potential last week, when, in partnership with a video-centric activism site called CauseCast (which is now being beta tested), the news and blogging portal created a new section devoted to activism, centered largely around contributions of time and money. The Impact page, as it is called, “offers our readers the opportunity to read a news story that moves them, then take immediate action in tangible, specifically tailored ways,” founder Arianna Huffington wrote in her blog, “ranging from making a donation to a charitable group to volunteering and contributing directly to an individual in need, to signing a petition and signing up to stay updated on stories that interest you.”

That move came on the heels of a demonstration of the Post’s ability to turn a news story into cash through micropayments. Last month the site publicized the story, originally reported by the St. Petersburg Times, of a Florida mom who, buried in health care bills, discontinued her own treatment for blindness in order to keep funding her kids’. In response to reader interest, the Post contacted the family and set up a widget on its site to collect PayPal donations, amassing more than $25,000 in about two weeks. Had that widget already been in place and the process been more automatic from the moment the story first appeared, even more money might have been raised.

Similar efforts to capitalize on the mass audiences, viral distribution and social communication media of the web are widespread. The World Food Programme began soliciting $1 electronic donations to fight world hunger last week through a YouTube video that encouraged viewers to, among other things, “Hungrify your tweets.” But that effort, as well as the Huffington Post’s new Impact page, may be missing key elements that made micropayments work for that Florida mom.

First, I don’t think a charitable donation portal works well as a destination. Most people won’t proactively choose to frequent a site whose purpose is to ask for money. And aggregating a large number of causes in one spot could deplete one’s determination to make a difference, making donors feel like their dollars are just a drop in the ocean. The untapped potential of micropayment systems is not to generate concern for a cause. It’s to harness concern that already exists — especially in real time: to tap the emotion of the moment.

Take ActBlue, for example. The group is the largest source of funds for Democrats, having raised more than $100 million for political candidates since its creation in 1994, through the use of 420,000 donors and median donations of $50. But perhaps its greatest success came through a more real-time approach. The group migrated to mobile contributions this summer with a Twitter integration. And it broke records this fall when it raised $900,000 for Congressional candidate Rob Miller within days of his opponent, Rep. Joe Wilson, calling the president a liar on live TV – a feat Congressional Quarterly called “unprecedented.” There’s a lot of opportunity for those who could duplicate that rapid harvesting of passion in other ways – not just politically but commercially as well.

Real-time micropayment efforts need to be very easy and attached directly to content that people consume for its own sake (a news story, TV show, even a documentary, etc.). This would be natural for partisan political blogs, for example, but could be applied in ways philanthropic or even commercial. Moved by the above story of the crash survivor? Help fund their medical costs here. Outraged by this crime? Contribute to the victim’s legal defense here.

Perhaps online media companies could find a way to monetize this themselves in some cases – taking a fee or a cut of the proceeds when the recipient is a legal or political organization or a non-profit, say, but not an individual. Maybe there’s potential for an ad model around this approach, in which sponsors could use publishers’ ready-made widgets to set up micropayment ads in rapid response to relevant stories. (“Did you know the XYZ Foundation is fighting to prevent tragedies like the one you just read about? We need your help.”) Or maybe corporate advertisers could sponsor a donation widget, matching donated funds to needy individuals mentioned in the story, thereby showing that their brands represent folks who care (and in the process, maybe funneling readers to information related to the cause on their own corporate site).

By the way, if you enjoyed this week’s column and want to support my efforts to keep you informed…

Question of the week

How could a commercial advertising model fit this opportunity?