There’s been a lot of evil crap floating around “teh Intarweb” about MacZot!, Mac Heist and other shareware-highlighting deals lately, and I think that a lot of folks are talking out of their asses pretty loudly about something that isn’t that big of a deal.

This whole mess started with MacZot! a while back, which was trying to coin an idea from sites like woot.com where there’s one heavily-discounted item per day in limited numbers that everyone gets to drool over and buy if it fancies them to do so. Well, when this idea was applied to Mac applications this came to be a bit of a problem in several ways. The first is that there’s only so many Mac applications that can be sold in bulk. The rest are niche products or pure crap, so while at first the site really ran high with familiar products on the cheap, over time it really just ran out of people to market the concept to and fell into either not offering items for periods of time, re-offering old items, or offering one gem in a week of crap — at which point no one is paying attention and the sales are slow for that item.

The other problem with MacZot! (and it’s clone MacUpdate Promo) is that the site owners take a share of the cost of the software at the discounted rate. Not only is a developer lowering the price of his ware (in most cases to about half of its normal price, but sometimes as low as a fifth of the normal price) but on top of that discount the site is taking another cut of the money, leaving the developer with even less than the promotional price would have netted him. If you look at the pure financials of this scenario, it’s an incredibly bad deal.

The missing part of this is that it’s not about the financial aspect when it comes to promotional offers. A promotion is, by definition, something done to increase the sales or awareness of a product. While getting $5 off a product that was originally $15 doesn’t net someone crazy amounts of money, it does tell you that, for a day, the developer was spending $10 per item in advertising. Whether that came down to being a good deal in the long run or not is not easily determined by an outsider. For the developer, he has to look at his sales before and after the event and see if it did what he wanted. Either way, it was the developer’s choice to market his application in such a way, so if one developer doesn’t feel such a method is either fair or worth the time and money, then it’s not for him. Others feel differently, so the methodology exists.

However, such a marketing method pits the product up against its list and sale prices alone, and gives people one day to see if they like the item. A lot of products require time to test and settle into before making the decision, and one day isn’t nearly long enough to do so for many of them. Many users of Notae take the full demo period before registering, for instance. So forcing a sale on an application whose normal registration scheme gives the user time to test it isn’t generally going to produce a large quantity of sales.

So, enter Mac Heist and the extended advertisement of the bundle of applications they’re selling together. This solves two problems. The first is time — in this case you have over a week to test the named programs and see if you like any of them. The second is the price-to-value of any one program. You may not think TextMate is worth its price, but Delicious Library is, so getting them all for just a little more than the price of one is a good deal, even if you won’t use one of them. This is a very, very common sales tactic simply because it works. However, it’s mostly used in the physical goods market as a way of getting rid of slow-moving stock by packaging it with quick-moving stock, or to advertise a new item (like when you get the shampoo with the teeny little fancy conditioner). In the digital market, it’s a bit of an oddball tactic because there are no supply issues to solve, which leaves advertising.

I think, though, that there are two issues being solved by selling in a bundle. The first issue is that of advertising, as before. People either don’t know about it, or don’t want it at the current price. The only way to know which is to watch sales after the bundle sale. If sales plummet again, it’s the price. If they dip and then either maintain or increase, it was advertising.

The other issue being solved is that of need. I don’t need half of the software Mac Heist put out. Hell, I don’t need any of it. However, if one of those were an item I needed and was looking for a discount on, I’d be all over it. The trick is that I have now moved a unit of several other packages I couldn’t care less about.

Or did I? So here’s where this specific implementation of the bundle idea gets a little odd. Developers participating in MacZot! and MacUpdate Promo were paid based on sales volume. The developers in Mac Heist were paid a flat fee for unlimited sales. This is either good or bad, depending on what you envisioned Mac Heist as being. If you thought of it as a store where people sell their software to the public at a discount, then that would be a very bad deal. No one in their right mind would setup a flat-fee, unlimited item sale of their product without that fee being very, very large.

However, if the goal is not to increase sales at that moment in time, but is instead to increase awareness of the program and reach eyeballs and start word-of-mouth while taking a bit of a loss to do so, then it’s a great model, and is very similar to the idea of MacZot!, but with a bundle instead. In MacZot! the developer lost about half his money instantly, and then another percent to the site. In the end, perhaps 33-40% of the normal price landed in his pocket. In Mac Heist, the price to pay for the advertising was variable depending on the success of the products, but a similar concept was in place — the developer gets some profit for selling the product, the site gets some for advertising the product, and the end user gets a good deal on all the products. It’s not as good a deal monetarily as selling individual items at a discount, but it gets far more advertising bang for the dollar as the promotion both lasts longer and the site owner is promoting the developer’s application with the site when the ads go out. It’s all about the eyeballs.

The most traditional advertisement of all, however, is simply to advertise a sale price. This is where the Mac Santa site comes in. Developers can, free of initial cost, send in a name, icon, and tagline and get instant promotion. The only caveat is that the user must be able to use the coupon code MACSANTA to get 20% off the order at checkout and that the deal expires on Christmas. This has all the hallmarks of a great idea:

• Discounts for the consumer
• Low barrier to entry for the advertiser
• No middleman increasing the cost to either side

However, it has some pitfalls as well. Because of the low barrier to entry for the developer, the site has gone from a dozen apps to about six dozen at this point, and will get more by the time it ends. The applications are drowning in friends and the developer has resorted to putting a random assortment of programs at the top of the page at any given time. This still gives the advertising aspect, but once the app-to-crap ratio gets too high, people are going to lose interest in the site. Perhaps it’s best that it’s only going to be around until Christmas.