Common Cents: How Gather Pays (August 24, 2009)

Here at Common Cents, we don't usually touch on the financial aspects of Gather itself -- but let's be honest with ourselves. We're here for the social networking, we're here for the friends, but we're also here because we get rewarded for what we post and the attention we bring. We earn Gather Points - which for those of us in the United States, and hopefully someday for those of us across the globe - are translatable into cash (through PayPal) or gift cards for the stores we like the most. It's a wonderful system that rewards people for their creativity and their ability to attract attention and maintain content that people want to read. But how does Gather afford to do this? Well, in case you haven't guessed, this week, we're going to focus on How Gather Pays.

Chances are you're already familiar with the basics - Gather displays advertisements in various places across the site, and is paid for people viewing or clicking on said advertisements. (For the record, no, clicking said advertisements will not increase your Gather Points.) The simplest form of web advertising is the banner - whether a simple text link, an image (static or animated), or even those quasi-annoying Flash banners where you're promised fabulous prizes if you can beat a simple minigame. While some banner advertisements pay per impression - that means, per unique person who views it on a particular day - most payouts require the viewer to do something. Pay-per-click is the most frequent sort of web advertising -- in short, the website gets paid when you click on an advertisement. Pay-per-lead advertisements are somewhat less common, but the payout is better - in short, with pay-per-lead marketing, the website gets paid when you follow a link or banner and provide your contact information (essentially adding yourself to the end marketer's database). Pay-per-sale is similar, but as you can guess, requires you as the user to purchase something and typically pays the website a percentage of the sale price.

Then again, you're probably already familiar with all of that. What you may not consider is that many advertisers use more traditional methods of marketing, on Gather and elsewhere. Sponsored contests - whether as simple as an essay contest or as epic as the First Tracks competition - are one big way for a company to promote its name to our members -- typically, they pay for any Gather Points rewarded, as well as paying Gather themselves for handling the organizing and marketing aspects. Book, music, and other marketers may offer free copies or samples of their product to people in exchange for receiving a review, which in turn gives valuable feedback to them and lets more people know about their brand. Sponsored Gather groups give an active place for people to share information about a particular product or brand while also encouraging members to take an interest.

So does all advertiser revenue go towards paying our Gather Points? Of course not. Advertiser revenue goes towards paying for computer equipment, staff, building space, and many other things that keep Gather running, in addition to making those Gather Points have value. Customer service representatives, those unsung technical support personnel who constantly try to implement new suggestions, the sales team who ensures that advertisers continue to show interest in Gather in months and years to come -- all of these must be paid. New server equipment must be purchased and installed to meet increased demand and server load. All of these costs factor into the effective value of a Gather Point -- in order to stay solvent, Gather must ensure that its expenses, plus the value of all Gather Points presently awarded to all site members (including international members - even if they can't collect yet), do not exceed its total income. That's only common sense, after all.

So that's How Gather Pays -- every Gather Point awarded to every member must be backed by hard currency, and Gather's expenses met besides, by good salesmanship and good advertising. The next time you grumble about the latest contest or banner ad, just remember that those are what pay for your Gather Points, smile, and keep on sharing!

Austin Cushing, Money Correspondent:
Austin's column, Common Cents, published twice monthly 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, consultant, programmer, poet, photographer, and Microsoft-certified database administrator, currently working as an IT consultant. 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, and manages a number of popular Gather groups.

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.

Food for Thought:

Many 'social networking' sites that offer a points-based incentive have failed in the past, yet Gather's been in business for years with no signs of slowing. What do you think keeps Gather successful - and keeps our Gather Points solvent?