Saturday, April 5th, 2008, at 6:53 pm

Tipjoy – A Neat Concept That I Hope Sticks

Tipjoy is a neat new company that aims to make it easy for people to reward content producers. The premise is simple: content producers embed the tipjoy button on their website (as I have done on the left) and any person that clicks it agrees to “tip” 10 cents. Alternately, a surfer can use tipjoy’s bookmarklet to tip any website–even if the site owner has not signed up.

The idea is profoundly different than any model that exists now. This is what makes the idea so neat, but is also their biggest challenge.

Presently, the vast majority of independent financial gain that comes from publishing content is based on advertising. Generally speaking, this advertising is a good thing (though I may never admit I said that) for a few reasons: it increases brand awareness, it takes financial burden off of the end-user, and most importantly it allows the content producer to keep going.

Without delving too deeply into the world of web advertising, there are typically three things for which a content producer might get paid:

Different forms of advertising tend to reward based on different actions. If the advertiser is paying based on actions only (such as most affiliate programs), the content producer receives no financial gains unless their users spend money on the advertiser’s product(s) directly–or to a lesser extent if the user gives up their personal information to the advertiser to become a lead.

Tipjoy’s service fills an interesting void by allowing an end-user to reward a content producer much more directly. Under the advertising model, a user could click on an advertisement, but it’s very difficult for users to know whether this even helps the content producer. If the advertiser is paying for impressions, then it can be argued that the user’s presence on the site is reward, but it’s still very difficult to know whether this is the case. By giving users the option to more directly reward good content, it can inform the content producer of the true perceived value of their content–and thus their work–rather than a much less tangible number such as number of visits.

The inherent challenge of this is that it relies on users to pay for things they would otherwise get for free. If a user tips one great blog post per day, this adds up to $36.50/year that s/he otherwise would not have had to pay. Arguably, the user probably received much more value than that from all of that great content, but it’s a problem of motivation. It requires the content consumers to have a sense of altruism in their day-to-day surfing.

Due to this challenge, I don’t know that Tipjoy would work as a sole form of income. I do think that it works nicely beside already existing forms of income and also for content producers that don’t look to make a living off of their content, using more of a “donation” style of model. Whether this will generate enough revenue for Tipjoy to stay in business remains to be seen.

In the meantime, those of you that enjoy my content–and feel ever-so-slightly altruistic–feel free to leave me a tip. To my fellow content producers, watch out as you may have some tips coming your way.

As Robert A. Henlein wrote through his character Lazarus Long, “If tempted by something that feels ‘altruistic,’ examine your motives and root out that self-deception. Then, if you still want to do it, wallow in it.”