Potential advertising models for Gems
The top monetization tool for social networks is targeted ads. Giants like Google and Facebook derive the majority of their revenue from ads.
The Gems team is experimenting with several advertising models - will be great to hear feedback from the community.
Gems whitepaper is also open for anyone to comment:
https://docs.google.com/document/d/10ZIvAbI-91qyJTbAaxCH3etbgMy9AyOsf403rhPu4pA/editPay for sending personal unsolicited messages
One of the main problems of any communication platform is spam. The fact that communication is constantly becoming cheaper enables spammers to send bulk messages to unwilling recipients. The common approach to spam is heuristics-based flagging and filtering (this is how gmail works). The problem is that this method is extremely inaccurate and only works well if the same exact spam message is duplicated thousands of times. Users resort to hiding their personal address in order to avoid spam. Consider what would happen if a celebrity like Oprah would publicly share her personal email - no spam prevention algorithm would be able to handle that.
In a world where the spam problem has been solved, there would be no need to hide your address. Everybody’s personal address will be public and we will no longer rely on secrecy to stop abuse. If you think about it, every major personal communication platform - such as email, phone, SMS, WhatsApp - fails at this point.
Why do we hate spam so much? The answer is basic economics. Reading incoming messages is time consuming, and our time is a very valuable resource. The straightforward solution is therefore basic economics as well. If consuming messages is expensive, sending them should be expensive as well.
By placing a gem price tag on sending personal unsolicited messages, we can guarantee that users pay for the right to contact you. It’s important to emphasize that sending messages between friends (approved contacts) is not considered unsolicited since the recipient has explicitly agreed to receive messages from the sender. This means that within the Gems network, sending messages between friends will always be free.
How expensive should sending a message be? The natural answer should also rely on basic economic principles. The more popular the recipient, the more expensive contacting them should be. This concept is found in the bidding system employed by Google for their adwords platforms. Every advertiser enters a bid of how much they agree to pay for a click. Roughly speaking, the system displays the highest bids, making popular keywords more expensive because people are willing to pay more for them. Borrowing this principle to our model, we can decide on the number of unsolicited messages a recipient will receive in a period of time, and take the highest bids from competing senders.
It might be a good idea to make this mechanism opt out. If a user is willing to receive unsolicited messages, they should be able to allow strangers to message them for free.
Another interesting feature of this mechanism can be read receipts. The sender of an unsolicited message is probably interested in whether the recipient has read the message or not.
Pay for sending private message ads
Unlike unsolicited messages which are personal in nature (like introducing yourself to a beautiful girl and asking if she’s single), ads are commercial in nature.
The central distribution channel in Gems is instant messaging. Private message ads are messages that will appear in the incoming message screen next to messages you receive from your contacts. These messages will be marked as promotions so recipients could differentiate between them and regular personal messages. A popular similar advertising channel is the promotion tab in gmail - where users receive promotional emails from advertisers directly into their inbox.
The key for maximizing the effectiveness of ads is targeted advertising. Keeping ads relevant makes both the viewer and the advertiser happy. Advertisers will not choose a specific list of recipients to receive their ads, but define some relevancy criteria for the target audience. Criteria can be based on content, similar to how Google adwords works - ie. show this ad to users interested in buying an engagement ring. Criteria can also be based on an audience profile, similar to how Facebook ads work - ie. show this ad to single males in the age of 20-25.
Employing content based targeting within Gems is mostly a privacy issue. Platforms such as gmail analyze (anonymously) the content of read messages and try to match a relevant ad based on keyword similarity. This can be performed automatically within Gems, but only on non-secure messages. Secure messages are encrypted client-client end to end and cannot be deciphered by the Gems infrastructure. In addition, content analysis should be opt out to protect user privacy upon request.
Profile based targeting within Gems is a little more tricky. The Gems network does not require users to fill any profile information. An interesting potential solution is to let users provide a voluntary profile by answering questions that will help Gems deliver relevant content more effectively and personally (ie. what is your age). To encourage users to give as much details as possible, the network can compensate users using gems for doing so. A natural way to implement this is by taking part of the cost paid by the advertiser and giving it to the ad recipient. We can even make the payout proportional to the amount of provided profile data. Some profile data can also be generated automatically, but usually at the expense of privacy. A good example is geo-location. As long as the user agrees to share his location with the app, we will be to use this data in order to show local ads. It’s important to emphasize that profile data will never be shared with the advertisers and will only be used by the network anonymously to deliver relevant ads.
The cost of advertising should probably be based on bids as well. The size of the target audience is limited (the number of participating users that fit the ad criteria), so only the ads with the highest bids will be shown. Another interesting question is whether these ads will be paid per exposure or per click (an advertiser only pays if a user opens their message and reads it). If we choose the latter, the natural approach would be to maximize the network profit from ads by factoring both the amount of the bid and the success click-through rate of previous exposures, and choosing which ads to display accordingly.
Pay for priority messages
Quality of service (QoS) is an interesting factor worth exploring for monetization purposes. Consider the real world example of shipping packages. The free shipping method is usually a standard service such as USPS, which takes a little longer to deliver and offers less control over tracking and delivery status. The shipper can pay extra for a premium shipping service such as FedEx, which arrives much faster and is generally more reliable.
Borrowing from this example to the Gems ecosystem, users will pay for sending messages with a higher priority. Delivery speed and reliability are probably not the aspects to play with, because the standard free messages on Gems always arrive virtually immediately and are extremely reliable.
So what aspects can we use instead? One option is the sort order of incoming messages. Normally, incoming messages are sorted according to arrival time. It makes sense that high priority messages will always appear first regardless of arrival time. Another option is to highlight high priority messages and mark them for special consideration. This can be achieved by using a more prominent notification sound or by using bolder colors / urgency icons for the message in the incoming message list. Another option is to send several push notifications regarding a high priority message if it hasn’t been opened by the recipient (instead of just a single one like we do with normal messages). Another option is to provide tighter control over delivery indication and notify the sender more prominently immediately when the recipient has opened the message. Another option is to display priority message inline in the incoming message list, meaning the recipient will not have to click on them in order to read their content.
Generally speaking, if recipients are aware that an incoming message was paid for, they will be more inclined to open and handle it in a timely fashion.
Pay for a sponsored appearance in the contact list / user directory
The Gems user profile will potentially include a status message. Every user can choose their own status line - which is very similar in concept to a Facebook status or WhatsApp status. This status line will appear below every username in the contact list / user directory.
The status line is an excellent platform for a quick 1-line advertisement. Consider the following use case - a startup looking for new developers. A member in the startup will set their status to “looking for talented ios/android developers” and invite any of their contacts to message them about potential applicants they know.
It makes sense to make these appearances sponsored as well. A sponsored result will probably appear first in the list of contacts (and probably be labeled as a sponsored result). In addition, we might also show sponsored results in user contact lists which aren’t related as direct contacts. For example, even if I don’t personally know the startup member looking for a developer, I will still see their sponsored result when I enter my contacts screen or when I search in the user directory.
Keeping advertisements relevant is similar in nature to previous channels, such as targeting by content and targeting by profile. In addition, another interesting criteria is the distance between users (hop count or connection degree - 1st degree are immediate friends, 2nd degree are friends of friends, etc). It makes sense to show sponsored statuses from users who travel in similar circles.
Pay for a commercial company page / e-commerce
The traditional entities within the Gems network are private individuals. Any user can join Gems and connect with their friends. Just like how Facebook grew to accommodate businesses as an entity within the network, Gems might make the same decision as well. Registering a new user as a commercial entity / business is a good candidate for a paid action.
How will company / business users be different from regular users? First of all, the profile page will have a commercial orientation and show relevant details about the business - such as an address / map location, website, logo, phone number, email, link to mobile app, opening hours, etc. In addition, business users will be geared towards e-commerce. Since the Gems network allows for easy fund transfers between users, it will be convenient to use for light e-commerce (1-click purchases).
Deeper e-commerce capabilities will allow businesses to present a goods/services catalog, support checkout with Gems and provide light order management.
