Bix sees green in online contests

American Idol proved not just that we love watching the highs and lows of wannabe superstars, but that a surprising number of us wanted to be up there. It’s these two factors that make Bix, a company enabling public and private contests online, think the service it’s about to launch is a winner.

When I first played around with the Beta site, I couldn’t stop thinking it was just another entry in the online karaoke space. With a healthy dose of skepticism, I then spoke with CEO Mike Speiser. By the end, because of their business model, my perspective had changed.

Bix is trying to address a real business problem: diminishing effectiveness of brand advertising. In the US alone, advertising accounted for $143B in 2005, with most of that dedicated to print and TV , which is why the old adage holds: “Half my advertising dollars are wasted – I just don’t know which half.”

Speiser believes that controlled sponsorship of a legally sanctioned online contest, be it karaoke, short films, photo essays… all of which the Bix engine supports, is a powerful brand advertising concept. As someone who has faced the very problem Bix is trying to address, I think he’s right. Online contests present not just a branding opportunity, but open a new direct channel for the marketer, allowing multiple opportunities to deliver coupons and offers.

But will people use it if they see it as nothing more than a marketing vehicle? If the corporate sponsors offer good enough prizes, they’ll find performers. And if the performers offer enough of the good and even more of the bad, people will watch.

The site is certainly easy enough for the mass consumer to use. I spared the world my singing, but I watched Speiser create a contest and karaoke video. Setting up a contest is quick, as is creating and uploading a video with a webcam. Also, viewing content, voting and sharing are all simple enough tasks.

Still, there is a lot of work ahead of them. The user interface needs an upgrade to attract serious corporate advertising dollars; Bix needs to optimize for mobile users (mobile was a huge factor in American Idol voting); and it will have to soon go international, before someone else does, to tap what’s likely an even better market.

And certainly, if successful, competition looms. Sites like Youtube and MySpace have already proven they can make stars. And Fox, with MySpace and Ksolo in the same portfolio, will find the market tantalizing if Bix takes off.

The site is still in invite-only Beta but will launch broadly in the coming weeks. It will be free to all comers for a few months as they roll it out, but the company believes advertisers will soon realize contest sponsorship is a service worth paying for. Then we’ll see if Speiser and his investors are right and the ROI keeps them coming back for more.