Survey Finds Arrington Has a Point: Given Choice, Users Overwhelmingly Prefer Direct Payments and Research Surveys to CPA Offers

Definitions:
Since some of the terms in the article below can be confusing, to make it easy on you, we’re defining them. For those of you who skip over notes like this, have no fear: we’ll define them again within the article itself.
A research survey in this article is a market research survey that users complete, giving their opinion in exchange for in-game virtual currency. These are run on behalf of Fortune 1000 companies and do not collect any personally identifiable information.
An offer is a CPA advertisement that users complete in exchange for in-game virtual currency.

By now you’ve probably heard about the showdown at Friday’s Virtual Goods Summit between Mike Arrington, editor of TechCrunch, and Anu Shukla, founder of Offerpal. The showdown came at the conclusion of the Payments Infrastructure for Virtual Goods” panel. For those who spent their Halloween weekend in the depths of costumed carousing, you can still check out the details of that on TechCrunch .

At Friday’s conference, both Shukla and Arrington spoke on behalf of the users regarding the quality of user experience. We agree with both parties that user experience is of paramount importance – over the weekend, we took things one step further and asked Facebook users what they thought. To the best of our knowledge this is the largest survey of its kind conducted on the FB platform.

We conducted a research survey of 11,678 users over the weekend across our publisher network (~500+ applications) with sample representative of the US online population. The users surveyed ranged from 13 – 60 years.  The average respondent plays 8 or more online games and spends nearly 7 hours a week playing online games. For more on our research data, please check out our appendix at the end of this post or feel free to email Lauren.

Key findings of survey:

  1. Respondents prefer direct payment methods.
  2. Respondents prefer research surveys to offers nearly 2:1.
  3. Of the three types of CPA offers, respondents prefer free and paid to mobile offers. Only 10.84% of respondents had a positive experience with mobile offers.

In short, our survey found that Arrington is making a good point. The CPA offer-only ecosystem provides significantly less user satisfaction than other alternative payment options. Given the choice between CPA offers and other methods of earning in-game currency, users overwhelmingly favor the alternate (non-offer) means of earning in-game currency, such as market research surveys and direct payments. 26.5% of users preferred completing market research surveys to offers. Only 13.2% preferred offers. The majority (60.3%) preferred direct payments such as Paypal, prepaid game cards (like InComm, etc.) and mobile solutions (like Zong, Boku, Allopass, etc)

Chart1

Users Report Dissatisfaction with CPA Offers: Mobile Offers are the Biggest Offender

Our survey asked users to rate their experiences with three different kinds of CPA offers: free, paid and mobile. The survey defined each type of offer for the user to make the distinctions clear. Offers are CPA advertisement that users complete in exchange for in-game virtual currency. Free offers require no form of payment, but do require users to submit personal/contact information while mobile offers require a user to submit their mobile phone number and agree to a subscription fee. Paid offers require a user to purchase something with a credit card in exchange for more in-game currency.

Nearly 90% of users we surveyed were either unhappy or neutral when it came to mobile advertising offers. Only 10.84% of users research surveyed responded positively to mobile offers (marking “satisfied” or “very satisfied”).

Comparing this with the data we collected on free and paid offers, it’s clear that users do not like mobile offers. These mobile offers are the type of offers Arrington referred to at the Virtual Goods Summit Friday as deceptive.

57.85% of users responded positively to free offers, marking “satisfied” or “very satisfied”, while 41.33% of users reported some degree of satisfaction with paid non-mobile offers such as Netflix and DirecTV.

Nearly 4 out of 5 (79.11%) users surveyed indicated they have never completed an advertising offer that required any form of payment for more in-game currency.

Chart2

Nearly All Users Prefer Any Other Form of Payment to Offers: Research Surveys and Direct Payments FTW

What do we mean by research surveys? The term requires definition here, since Arrington refers to some types of CPA offers as “surveys” in his Halloween post. The “surveys” Arrington refers to in his post are a form of CPA offers (stuff our competition runs and calls ‘Surveys’) and are not to be confused with the market research surveys Peanut Labs features as an alternative payment method for users.

The research surveys Peanut Labs features are unique to Peanut Labs and are anonymous market research surveys used by top brands to improve their products.  These research surveys should not be confused with the quizzes labeled as “surveys” as they are true market research surveys provided by our partners (Honomichl Top 50 firms such as Ipsos, Kantar and Nielsen) – users are compensated for their opinion only as these research surveys do not pass on any contact information to third parties. In 2008, Peanut Labs partnered with market research firms representing over 150 of the top Fortune 500 companies and in 2009 provide 70% of social media sampling (source: Cambiar industry report).

In the interest of full disclosure, Peanut Labs also provide users with CPA offers as part of our full suite of options for earning more in-game currency on our platform. Since offers and research surveys are integrated on our iframe, Peanut Labs users are familiar with both research surveys and offers, along with options such as direct payment and SMS payment.

After conducting the survey, we looked at our respondent data on both offers and surveys completed within Peanut Labs. Interestingly, we found that all the users we surveyed complete at least twice as many market research surveys as offers. Users between 20 and 29 complete nearly 4.5 times as many research surveys as offers while users between 40 and 49 of both sexes complete over 7 times as many market research surveys as offers. The specific numbers on that are below.

Chart3

Across our user network, the average Peanut Labs user who completes a market research survey has already completed 5 or more market research surveys through Peanut Labs. We see about 90% fewer users returning to complete additional offers after completing their first offer.

A comparison of revenue from offers and research surveys confirms this finding – while offers do provide a source of revenue for our publishers, the revenue is a flash in the pan compared with research surveys, which provide a more sustainable, long-term solution for monetization.

Observed Revenue Trend with Research Surveys & Offers

Chart4

X-axis: Number of Weeks, Y-axis: eCPM

*for an average typical set of 1000 daily active users from the same site or game over 12 weeks

We’re interested in hearing more from users on their experiences with research surveys on our platform, along with offers on our platform and others – you can reach us at support-media@peanutlabsmedia.com.

Appendix: For You Data Nerds

The only screenout question for the research survey identified whether the user has a competing interest (i.e., works in online advertising) in completing the survey.

The majority of users who participated in our research survey work full time and identify as suburban and white/Caucasian.

Over 80% reported that they are at least partially responsible for financial decisions of household, whether as the sole decision maker or making financial decisions jointly with other members of the household.

Chart5

We found low level of penetration for the surveyed users monetizing elsewhere online:

- 22.55% purchase or pay for services online (utilities, bills)

- 24% purchase real goods online (i.e., shoes, clothing, gadgets, event tickets, books, food)

- 14% pay for premium content online (such as membership to online sites)

- 18% watched ad-supported free streaming television or movies

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17 Responses

  1. This is brilliant! I’m not a fan of Michael Arrington but having data to support all the rhetoric is great.

  2. [...] Our technology provider for RockYou Offers, PeanutLabs, has also posted an interesting research study they ran over the weekend that clearly outlines how users feel about the scammy offers that have been so prevalent on offer walls: http://peanutlabs.wordpress.com/2009/11/02/survey-finds-arrington-has-a-point-given-choice-users-ove… [...]

  3. [...] Our technology provider for RockYou Offers, PeanutLabs, has also posted an interesting research study they ran over the weekend that clearly outlines how users feel about the scammy offers that have been so prevalent on offer walls: http://peanutlabs.wordpress.com/2009/11/02/survey-finds-arrington-has-a-point-given-choice-users-ove… [...]

  4. [...] Our technology provider for RockYou Offers, PeanutLabs, has also posted an interesting research study they ran over the weekend that clearly outlines how users feel about the scammy offers that have been so prevalent on offer walls: http://peanutlabs.wordpress.com/2009/11/02/survey-finds-arrington-has-a-point-given-choice-users-ove… [...]

  5. Couldnt agree more with this case study.I have a content based site and all my income comes from surveys

  6. [...] offer business. With Peanut Labs, a user fills out a survey in lieu of making a payment in a game. Over the weekend, the company queried 11,500 of its users and found that more than 60.3 percent prefer direct payments, 26.5 percent prefer surveys, and 13.2 [...]

  7. [...] Survey Finds Arrington Has a Point: Given Choice, Users Overwhelmingly Prefer Direct Payments and R… Definitions: Since some of the terms in the article below can be confusing, to make it easy on you, we’re defining [...] [...]

  8. [...] labs discovered widespread dissatisfaction among users with incentivized offers for virtual goods. Only about 11% of users had a positive experience with [...]

  9. great piece of info. wat is surprising is the number of people whos income is in the less than $10000 bracket.

  10. [...] Visit link: Survey Finds Arrington Has a Point: Given Choice, Users … [...]

  11. [...] Continue reading here: Survey Finds Arrington Has a Point: Given Choice, Users … [...]

  12. great info. i like it and surprising me of number of people whos income is in the less than $10000 bracket. Rock on!!!!

  13. Interesting seeing actual numbers behind it. While I’ll never ever do an “offer” I am all about research surveys.

    Disclaimer – I have done Peanut Lab research surveys before and found the experience positive.

  14. Great info! and quite helpful!

  15. I’m rather excited to see this kind of data because it confirms my experiences and tells me that we are moving in the right direction.

    While we at starpirates.net have always provided a direct payment option, many of our customers were asking for alternative methods. We investigated several different options and did end up testing CPA offers.

    In the interest of clarity between our customers and us, we did have several discusstions about it before hand and when we finally went into the testing phase, we made it very clear that this was testing only and that we wanted their feedback. At the end of our week of testing with very vocal and instant feedback from our players, our data lined up pretty well with this data.

    We’re now well into testing a direct survey method and it looks like things are proceeding well. Our users prefer this to the CPA offers and there is much less opportunity for an outside influence to cause negative perceptions.

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