NetWinner Gives AdverGame Network Partner Sites 50% Raise, Asks THEM to Buy Prizes

April 17, 2008

Update, 4/18 – 12:07am: A post on NetWinnerCentral that contained a link to this article was just deleted. They don’t want you to read it. That should tell you something.
In a press release on Tuesday, “Casual Games a Winner for Both Consumers and Advertisers,” NetWinner claims to have paid out over $1.6 million to members since the site’s inception. They say that in February, they served 50 million video ads to players of their games.
The press release states that “the company works hard to build the consumer connection by giving them what they want, not just in the games they play, but the prizes they win…” [emphasis mine]
Ask a long-time NetWinner player if they agree with this. First, gift cards and magazine subscription redemptions were taken away and replaced with Ecount gift cards, which was met with huge player resistance. Players were indifferent to the redemption of points for raffle entries, so the company “forced” the redemption by replacing ten point game wins with raffle entries. $25 Ecount redemptions were removed. As of this writing, no one has been paid for any prize redemptions made after November 5, 2007.
CompareRewards has learned that the same day that NetWinner took drastic measures to decrease the amount of member earnings and the frequency of their payouts, they gave their AdverGame Network partner websites a 50% raise.
Click here to see an excerpt of the email sent to their partners (cropped, and with the partner’s website name removed). The email cited “tremendous response” to the prize drawings, touting the fact that NW dropped the points required to buy an entry. It mentions the addition of the $100 Ecount redemption for 100,000 points…but neglects to mention the removal of the $25 Ecount redemption. And it spins the substitution of the ten point prize for a daily drawing entry as a positive.
Then comes the kicker: “Because of these changes [emphasis mine], we will now be able to offer all partners 15% [formerly 10%...a 50% raise]…”
I heard from two AdverGame Network partners in the past week who shared their viewpoints on the changes at NetWinner but asked to remain anonymous. One, echoing my own concerns when NW asked me if I wanted to be a partner site, said that he was worried that the frustration and outright anger many NW members are expressing because of last week’s changes would result in ill will toward him and his website. I asked him whether he was concerned about being paid and he said no…HIS payments were guaranteed by contract.
The other partner I talked with said, “This move is an attempt to reduce the amount of money spent on prizes and to increase their partner payout. They’ll get more traffic from partners since they are able to pay more – but they’ll lose a lot of dedicated members because of the changes.”
In other words, NW knows the changes will tick off existing players and that perhaps some of them will leave. While this is good for NW because those members won’t be around to cash out their earned points (keep in mind that points earned but not redeemed are considered a liability, accounting-wise, for any point site)… it’s bad for NW, too, because no members playing = no members watching ads = NO INCOME. When you’ve p*ssed off your existing membership, what else can ya do but find new members? And the newbies won’t know how good NW used to be…they may be content to play for raffle entries and for points that will take a year or more to accumulate to cashout minimums. NW obviously hopes to bring in new members by offering its partners more money to promote the program.
This AdverGame partner went on to say, “The REAL problem with netwinner is that they don’t have a strong business model. They drive traffic by partnering with sites on a rev-share basis, but the rev share is so small that many sites won’t give them much attention or placement, since there are more lucrative offers always floating around. I myself have made threats to reduce exposure because they just don’t pay enough for the traffic that they’re getting.” He said that the high-bandwidth video ads were a relatively new market and it’s not valuable enough (yet) to advertisers…so there’s not much money to be made right now.
So, what’s the next logical thing for NW to do? Get their affiliate partners to buy their own prizes! Which is exactly what they’re now trying to do.
In an email today titled, “A new opportunity with NetWinner,” (click here to see an excerpt) NetWinner urged its partner websites to buy their own prizes, in return for 20% of the ad revenue instead of the just-increased 15%. NW creates a page customized for the partner’s giveaway (which can be changed weekly, bi-weekly, or monthly), the partner provides the prize, and NW gives the partner site 20% of the ad revenue. The partner can put ads for their own main website into the ad rotation if they choose. You can see an example of these customized campaigns here — note that this is a raffle-only system, with NO points involved, only drawing entries.
This business model at least gets the prize burden off of NW’s back. Whether or not the partners get sufficient return on their investment (the prizes they’re ponying up) and whether NW can afford to customize campaigns and host the traffic while giving up 20% of their earnings remains to be seen.
Will NetWinner ever catch up with its outstanding redemptions? Who knows. But it’s my guess that a raffle-only model will be the way of the future for NW and their partner sites.

Share this:
Facebook Twitter Pinterest Plusone Digg Stumbleupon Email

Comments on this entry are closed.