New AllAdvantage Meets Same Fate As Old AllAdvantage

from the we're-shocked dept

We've said before that bribing users to watch ads isn't a good strategy. If an ad is relevant or entertaining, users will pay attention to it without financial inducement. And if it's not relevant or entertaining, it's not likely to be effective no matter how much you pay users to watch it. The latest example of this principle is Agloco, a reincarnation of the bubble-era AllAdvantage. Agloco, like AllAdvantage, paid users to display a window with advertisements on their screen. Also like AllAdvantage, it was a pyramid scheme where users would get paid a bonus for signing up other users. And now TechCrunch is pointing out that, like AllAdvantage, Agloco is going belly-up. It seems that their revenues are "not enough to support operating costs." When we covered Agloco's launch a year ago, we wondered whether the reincarnation of AllAdvantage was a sign of a new bubble. Their failure suggests that the markets are more rational this time around. The problem with the original bubble wasn't just that bad companies managed to get funding. It was that their stock values got inflated to ludicrous values and then crashed all at once. This time around, poorly-conceived companies like Agloco are able to get funding, but they run out of money relatively quickly and go out of business without dragging the rest of the market down with them.

Filed Under: advertising, content, paid advertising
Companies: agloco, alladvantage

Bribing Users to Watch Ads Didn't Work In 1999 And It Doesn't Work Now

from the failed-experiments dept

Last year we noted the possible resurgence of AllAdvantage (under a new name), the dot-com-era company that tried to make money by paying users to have advertising on their screens. It didn't work, and like a lot of companies AllAdvantage went belly-up in early 2001. But apparently, the new AllAdvantage isn't the only one not paying attention to history. A short-lived startup called Brightspot.tv announced last week that it, too, was closing up shop. Brightspot was apparently like AllAdvantage, only focused on video ads instead of banner ads. The fundamental problem in both cases is the misunderstanding about what's being purchased when companies buy ads. Companies want to buy consumers' attention, not just screen real estate. The raw screen space isn't worth anything if people aren't focusing on it. And obviously, if people are only playing the ads because you're paying them to, they're likely to find ways to hide the ads or play them at times when they're doing something else. If you have to pay people to watch your ads, that's a sure-fire sign that you're doing something wrong. As we've said before, ads are content. The trick to making them more effective is to either make them more relevant to your target audience or make them more entertaining. If your ads are fun to watch, or if they have information your target customers are actually interested in, then you won't need to bribe people to watch them. Conversely, if your ads are boring and irrelevant to your target audience, they're not going to be effective no matter how much money you spend on them.

Filed Under: forced ad watching, free with ads
Companies: alladvantage, brightspot.tv