Picking up where early-Internet entrepreneurs left off a decade ago, Jingit LLC is working with U.S. Bancorp to revitalize the business model of compensating consumers for watching ads online.
This business model has taken many forms (such as NetZero, which once required users to watch ads to receive Internet access), but it has largely floundered. The difference for Jingit is that it focuses on making payments to consumers as seamless as possible, the vendor says.
When consumers watch the advertisements Jingit presents online or on their mobile devices, it immediately credits between 6 cents and 50 cents to an online account. They may send the funds online or transfer tem immediately to a prepaid Visa Inc. debit card issued by U.S. Bank, which is the custodian for the online funds.
The payments aspect "creates a conversation between the [bank] brand and the consumer" that the bank can use to cross-sell other products, says Dominic Venturo, U.S. Bank chief innovation officer.
Working with Jingit is "a good account-acquisition strategy for us," Venturo says. Down the road, the same customers may be interested in college loans and college savings plans as well as auto loans and home mortgages.
About 2,000 users have signed up for the service, and about one-third of those have applied for the debit card, says Todd Rooke, Jingit's chief executive, who presented the technology Sept. 21 at the FinovateFall conference in New York. Jingit is working with about 12 national retailers, including Oakley Inc., Sony Corp. and T-Mobile USA Inc.
"This is not a passive [advertising] model. Itt is a very segmented and direct model where you are actually engaging with people," says Rooke.
Jingit users can earn only about $5 per day. Advertisers target them based on age, gender and location. Jingit gets a percentage of the payout, and U.S. Bank makes money when its cards are used.
In the next few months, Jingit also plans to let customers link other card accounts to their prepaid debit cards. Users would draw from those linked accounts to fund purchases even when they have not earned enough from Jingit to cover the transaction. U.S. Bank will handle those transactions through its Elavon merchant-processing platform, Venturo says.
Jingit may succeed because it does not cost banks to participate, and it offers something tangible to consumers, says Bart Narter, senior vice president of Celent's banking group.
This technology might be a good way to target the young consumers who are more likely to use mobile banking, says Ron Shevlin, a senior Analyst for Aite Group.
"It is a niche product, but it is perhaps a good Generation Y product because it presents banks with an opportunity to acquire customers and grow with them as they move to more regular types of accounts," Shevlin says.
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