Making a profitable ARG

Most Puppet Masters don't make their game to turn a profit. Unfortunately all ARGs have some cost associated with them. A PM can pay this out of pocket if his game is small (or his pockets are deep) but to do something of great scale or over an extended period of time, some kind of cash flow is required. So in this post I will look at one method of turning a profit in an ARG. To me, the most obvious solution is merchandising. But, how does a PM introduce merchandise without breaking the reality of the game, and without alienating the gaming audience?

Tie it in to the story. If you visit http://www.ibelieveinharveydent.com/, the first image you are greeted with is a group of Harvey Dent supporters wearing "I believe in Harvey Dent" t-shirts. Now, as an ad campaign, the Dark Knight ARG is obviously not hurting for money, but your ARG could take a cue from this game and use these products as a source of income. Let's say your game focuses on the cryptic journal of Kyle Stephens, a dead professor, who, up until his demise, worked for Blossburg University. You create the BU homepage, where players can find out about the late professor and his colleagues, but they will also find the school store. Here people will be able to buy stickers, t-shirts, foam fingers, shot glasses and other college merchandise. As long as the player has an emotional tie to the areas your create, you will be able to sell them on something.

It would be helpful in this scenario to have a PM blog, explaining the motivations of your sales, or to have a brief paragraph on the campus store site along the lines of "A portion of all university proceeds collected between now and the end of the semester will Kyle Stephens Foundation. It is thanks to your support that the foundation is able to thrive and move forward. Thank your for your time and donations." This isn't exactly breaking the curtain, but it does let your audience know that the money you make off of this merchandise will be put back into the game.

Your thoughts?