Guest Column - January/February 2013

The Compelling Benefits of Digital Downloads

By Ira Ozer, CPIM

The use of digital downloads is exploding in the premium incentive industry, because there are many compelling benefits for incentive agencies, sponsoring companies and, most importantly, program participants. Digital downloads include any type of content which can be downloaded over the Internet or mobile airwaves and consumed by the recipient immediately without the need for packing, shipping or waiting for it to arrive.

The download business started many years ago by companies that provided digital certificates, which could be downloaded, printed at home and then redeemed at retail partner locations, such as Quantum Rewards, which markets Hollywood Movie Money, redeemable at movie theatres, and, redeemable at participating restaurants. This click-and-mortar approach transitioned to pure digital downloads, starting with ring tones when cell phones became more personalized and then expanded rapidly to include music, when iTunes, Amazon and other online music stores launched and made their codes available to the incentive industry.

Media promotion specialists such as Billboard Music and MediaTree Group then entered the business by creating code programs that could be customized for corporate clients. This customization includes branded physical and e-code cards, download sites and variable decisions that determine the usage and resulting pricing and budget utilization, such as limiting selection to specified titles, controlling redemption periods and other factors. Many companies including Coca-Cola, Citibank, Toys R Us and hundreds of others have used digital download code promotions for product trials and contests to generate attention while minimizing costs by only needing to fulfill codes that were downloaded and redeemed during the promotional time period. This breakage model vastly expanded the usage of downloads, because although song codes cost 99 cents to $1.29 at retail music sites, when purchased for a promotion with an activation or claim step and limited redemption period, brands and agencies could buy codes for as little as 25 cents.

During 2012, innovative new suppliers launched, which have expanded the market from the world of premium-based promotional programs and contests to traditional incentive and loyalty programs. With high-speed broadband and small mobile viewing devices, such as iPads, netbooks and smart phones, movie downloads have become available by streaming for one-time use, longer rental periods and for purchase, and other content has been added including e-books, audio books, games, apps and specialized content, such as educational courses, language and even dance and fitness programs. Both Choose Digital and 6 Degree Group provide millions of music, movie and other media choices, which appeal to virtually all program participants.

There are many compelling benefits of including digital media downloads in incentive, recognition, promotion and loyalty programs for all audiences.

For program participants:

  • Instant gratification: Participants can search through the media selection by genre, artist, etc., sample a track, click to order using program award points, download and enjoy immediately. There is no shipping or waiting and MP3 downloads work in iTunes and all media players.
  • Low point costs: Participants can redeem for digital media at very low point costs, such as 150 points for a song, or 500 points for a movie download, instead of needing to save for a typical merchandise item, starting at 2,500 points.
  • Socialization: Downloading movies creates a bonding and sharing experience with family and friends, and it saves the time and money of going to a theater.