Google 3Q Numbers Impress Investors
Google 3Q Numbers Impress Investors

Google's Consumer Surveys Act As Soft Paywalls
Would you answer a few questions in an online survey to listen to music, an online article or some other premium digital content? A new Google product helps online publishers get money out of their visitors, not by paying but by answering a single survey question.

Google's new Google Consumer Surveys aims to fix a problem that troubles online publishers: how to bridge the gap between free and paid content. Giving away free content is easy. Getting people to pony up money for digital content is much more difficult. The New York Times company has only 406,000 digital subscribers across all platforms and properties (including the Boston Globe and International Herald Tribune) at the end of the fourth quarter. Micropayments haven't evolved to the point where payment friction is sufficiently reduced. As a result, online traffic that needs better monetization without driving away customers.

So Google has come up with what's basically a soft paywall. Answer a question, get content. Read a portion of an article for free, answer a question to receive the rest of the article at no expense other than a small bit of information. It makes sense. People may have reservations about what private information Google collects, but they are probably fairly inclined to share information when prompted.

About 20 online publishers are already using Google Consumer Surveys, including Pandora, AdWeek and the New York Daily News. An article at AdWeek, for example, has a Google Consumer Survey widget placed inside the article's second paragraph with the question, "Would a low 'ethics score' cause you not to buy from a company or buy from its competitor?" The remainder of the article appears as soon as the question is answered.

Here's how Google Consumer Surveys work: Companies create online surveys to gain consumer insights. People fill out those surveys to access premium content. Publishers get paid when their visitors answer questions. So, for example, a consumer product company can create surveys to get quick, statistically reliable consumer research on product features or packaging. Surveys cost 10 cents per general population response and 50 cents per response for a targeted demographic.

Publishers must maintain a 10% completion rate to continue to serve Google's surveys. They are paid a percent of revenue from the surveys in addition to revenue generated from other Google advertising on the page. The Google Consumer Surveys help page doesn't specify what share of revenue is given to publishers, but media reports say publishers get 5 cents per response (the equivalent of $50 CPM).

One reason Google Consumer Surveys could be so transformative is because they're cheap for researchers. These simple surveys won't replace top-notch, multi-question market research, but they provide an easy and affordable way to fine-tune products or receive instant feedback. Music companies could certainly benefit from running frequent surveys to gauge public sentiment. Facebook likes and YouTube views are fine metrics, but they're shallow metrics that don't tell much of a story.

Survey revenue could make a huge difference for online properties. An Internet radio service that makes an incremental 5 cents on some page views has a new revenue source to pay webcasting royalties. Newspapers that make an extra 5 cents on some online articles may generate enough revenue to prevent layoffs or hire more writers.

And the surveys could be incredibly lucrative for Google. Like the company's AdWords text advertising platform, Google Consumer Surveys will scale incredibly well. Google charges 10 cents for a general population survey and keeps 5 cents. And it's aiming for quantity - the minimum spend on any survey is $100.

Canada Gets Zik, French-Language Music Service
Canada will soon get a French-language music service. Zik.ca will launch "in a few weeks," according to a post at the company's blog. Zik is the creation of Archambault, the owner of 15 entertainment retail stores in Quebec. Archambault already operates an online music download store at Archambault.ca.

Can Guvera Survive on the Nasdaq?
Guvera, the ad-funded download site based in Australia, is seeking $50 million of funding ahead of plans for an initial public stock offering on the Nasdaq here in the U.S. The Australian reports the company would appoint Philip Quartararo, former Warner Bros Records and EMI North America executive, "to run its US operations to expedite the listing," and may move its headquarters to the U.S. from Australia. Even though Guvera chairman Darren Herft admits these events are "15 to 18 months away," the tempting pitch is currently being given to potential investors.

Guvera probably wouldn't top anyone's list of digital companies in line for an IPO on the Nasdaq. A company needs not only significant revenue ($100 million is an often mentioned rule of thumb) but also an especially high rate of revenue growth. This is especially true on the tech-heavy Nasdaq. Guvera may have high growth, but it doesn't have the cost structure of other Internet companies - it licenses its content - and it certainly doesn't have a strong position in a growing market. Advertising-supported music may be a growing market, but digital downloads are a very mature product. Investors would rather put their money into Spotify, if it chooses to go public, and bet on a leader in a young product category with a very high growth rate. ( The Australian)