Common Cents: Paid Participation

Hello, and welcome to Common Cents, where we discuss topics relevant to those living below the poverty line and other topics that are of importance to those living paycheck to paycheck.

All I Have To Do Is Participate and Promote!

You're probably familiar with the concept of a website that gives rewards for participation and promotion - in fact, if you're reading this, you're probably already a member of one. Websites such as Gather.com offer rewards to members who participate in their program (through reading and posting articles), as well as to those who recruit additional members (on the presumption that these members will also actively participate in the site.) These websites offer cash, or a cash equivalent, based on the member's participation in and promotion of the website and its services. But where does this money come from?

Your Ad Here

In short, most web businesses of this sort earn money through their advertisers, who may pay per impression (per time a given advertisement displayed on a page), per click (per time a person actually clicks on the advertisement), per lead (per time a person signs up for their services or website through the advertisement), or per sale (per time a person purchases their services through the advertisement.) Websites earn money from their members because they are reliable sources of impressions, clicks, leads, and sales; casual browsers, on the other hand, are likely to only view a site for a short period of time, and as such are less valuable to the website. The money that is used to pay members for their contributions (both for participation and promotion) generally comes from these advertisements.

Points To Cash

As a general rule, those who participate in a promotion-based website earn credit in an account on the server, which can then be turned in in exchange for actual cash once it reaches a certain point. In Gather's case, this is called the points system; members earn points through their participation and promotion, which can be exchanged for gift cards through their point exchange system, or cash if sufficient earning guidelines are met.

One important thing to note is that a website need not necessarily maintain the monetary value of every member account, nor even be able to come up with the money until a member reaches the point at which they are allowed to cash out their earnings. This means that unscrupulous websites may pull a variation of the Ponzi scheme - paying out members long enough to encourage participation, then abruptly closing their doors and keeping the remaining money for themselves. Obviously, sites that have been open for a long period of time and still manage to distribute rewards in a timely fashion are likely to be able to continue to do so reliably. 

15 Cents Per Referral? Sign Me Up!

Most websites that involve some form of financial inducement for participation offer a similar reward for promotions. For example, Gather currently offers a Borders gift card (worth $20) to members who invite and successfully recruit five of their friends to join as members. Most such referral plans involve a certain value assessment on the part of the website's management to determine the net value (to them) of having another member using their services. In cases where a specific number of referrals is required in order to acheive a reward, there is an added value to the website in that members who fall short of this requirement incur no expenses on behalf of the website, while giving the website the benefits of the members thus recruited. 

You Can Earn 5% Of Your Downline!

Another common trick to be wary of involves websites that offer inducements for referring members, such as offering a percentage of their earnings. This is a multi-level marketing scheme that shows up frequently in activity-based websites, and can only be maintained if the website properly takes these referral bonus percentages into account when figuring out what its users should earn for their activities. Here's how such a plan can go horribly wrong:

Imagine that a fictitious website named MakeMoneyQuick.com earns $1.00 every day from the activities of one of its members (after basic expenses are met), and in return, it pays that member the equivalent of 80 cents in MakeMoneyQuick points, giving it a profit of 20 cents per day. However, it also offers to pay 5% of each member's earnings to its downline (the people that member refers, the people those new members refer, etc.), ten levels deep. In the right circumstances, that member may only receive 80 cents, but the ten people in their upline each receive 4 cents, for a total of $1.20. If all members were to cash out their MakeMoneyQuick points under this structure, MakeMoneyQuick.com would not be able to pay them.

Time is Money

It's an old adage - time is money. Every minute you spend browsing a website is effectively a minute you do not spend on another activity, and as such, time that could effectively be spent in a more profitable or enjoyable activity. I mention this because of one simple and important precept - not every website that offers to pay you for your time spent using their services is actually going to pay you.

Some websites offer fantastic rewards, only to take down your information, sell it to other companies, and never give you anything in return but a mountain of spam in your mailbox and email account. Others offer low rewards and high payouts that may make the effort less than worthwhile (a site that pays one cent for clicking on a link and viewing a webpage for thirty seconds, with a minimum payout of $50.00, would mean that you would have to click on 5,000 webpages, and use up almost 42 hours of free time, just to get that fifty dollars.) Still others have limitations on how and when you can participate - only during certain times, only during an active promotion, and so forth.

All in all, even legitimate sites that pay what and when they say they will may not enrich your life to any significant extent, but if you can find a site that works well and does what they promise, such as Gather, you can reap the rewards with patience and diligence.

Food for Thought: 

What experiences have you had with sites that pay you for your participation and promotion? How much time have you spent on these sites, and what returns have you acheived? What is the most money you've never gotten from a website?

Austin Cushing, Money Correspondent:
Austin's column, Common Cents, published every Tuesday to Gather Essentials: Money, is focused on life below the poverty line and other topics that are of importance to those living paycheck to paycheck.

Austin Cushing is an eccentric writer, programmer, poet, and photographer, as well as a former maintenance worker for Wal-Mart Stores, Inc. He writes from personal experience and personal opinion, and enjoys finding the humor in even the darkest aspects of the world. In addition to his column, he maintains Gather groups on a diverse range of topics, from gaming to political discourse.

You can find all of Austin's Common Cents columns at http://commoncents.gather.com. Keep up with Austin's other postings and Gather activity by joining his Gather network -- just click here and select the orange "Connect" button on the left-hand side of the page.