What I hear you saying is...

We see this pattern time and again: Sites desperate for traffic resort to pandering users with cash and prizes:

Poor JudysBook tried to encourage a higher post-rate by offering their users free Starbucks cards for writing reviews. But users were confused by the rules (e.g. restaurant reviews didn't count! ) and soon the forums on JB were inundated with irate folk demanding their coffee cards. Now JB is in the deadpool.

Jason Calcanis tried to breathe life back into Netscape by cloning Digg and paying the top posters. Although it garnered some early PR, it was also met with derision, since (1) it was seen as a direct assault on the Digg faithful ("You can't buy us, man!") and (2) the payouts were so meager. Just after Calcanis' departure, AOL renamed the site "Propeller" and buried it.

And don't even get me started on models like Pay-per-Post or the latest AllAdvantage reintardnation, "Agloco".

The Lesson?

Compensating users is a recipe for failure

Why?

1. It's a distraction.
There are lots of sites out there that inspire great UGC without payouts -- Just take the story yesterday about the gentleman from Amazon that has written over 2,500 product reviews. Reviews, mind you, not "OMGs" and "LOL" comments. And apparently they are high quality too, as he's amassed over 17,000 'positive' votes from his fellow Amazonians. And Amazon has never paid this guy a dime. If you're tempted by the easy lure of cash incentives, it's probably better to concentrate on your failing product instead.

2. It's usually temporary.
Eventually, you'll probably have to stop paying people (as MSFT did). When the compensation goes away, users are going to disappear as quickly as they arrived. Worse, they're going to be upset because you've taken away the primary reason they were on your site in the first place.

3. It brings out the worst in a community
Look at any burgeoning social network that uses a "currency" to influence results (cash, prizes, votes, badges, etc), and you'll find a shadow-land of cheats, hacks, and otherwise deviant behavior.

4. It's not scalable Yes, you could pay users $40K a year to write reviews or posts for your site, but there's no way that model can scale to the average user. So the more users you try to encourage using funds, the less compelling the compensation becomes.

5. It actually demotivates people.
Sounds counter-intuitive. I mean, most of us work for a living, and certainly payday has got to be some kind of motivator, right? Actually, no. I won't try to rehash it all here, but Skrenta turned me on to this book that changed the way I think about human motivational factors, and I highly recommend it to anyone with an interest in the subject. To summarize one of the main tenets, however: Passion is its own reward. How can one explain the motivations of a woman that has over 19,000 comments on a forums board? Easy - she's obviously passionate about discussion. All she needed is a vehicle of expression. As soon as you introduce a reward, the focus is diffused, the passion gone, and it's game over.

Now, having said all this, WIHYSI.com is excited to announce a new giveaway that's sure to start driving traffic in hordes. That's right! We're giving away one miniature commemorative medallion of Abraham Lincoln to each reader that subscribes to our RSS feed. Each medallion is painstakingly crafted from copper and zinc alloy and includes the date and location of its minting. Act now, while supplies last!