Okay, is anyone really surprised at this news? I sure hope not, or you’d be up for my end-of-the-year “boot to the head” award…
In case you’ve never heard of them (Agoloco), it’s a company built on the ruins of Alladvantage, which made its claim to fame back in the late 90’s for paying people to have an ad bar running at the bottom of their internet browser.
Every X number of seconds the ads change, and every X number of minutes, the ad bar forces you to perform an action so that it knows you’re actually watching the ads and not sleeping or at work with your computer left on.
The idea certainly sounds good on paper - after all, I’m sure all of us wouldn’t mind making a few extra bucks every month just while surfing the web. The problem is… it’s expensive to run.
In order to keep users interested, let’s assume you could get away with paying 25 cents per hour - now let’s say you have 100,000 users who have the ad bar running at least 2 hours a day.
That would mean you would have to generate $50,000 per day just to pay your 100,000 members, and now you still have to pay a cut to the people who referred those members as well.
Before long, you have to sell a lot of advertising and your members have to spend a good chunk of money with those advertisers in order for them to continue advertising.
So, if you’re an active member averaging 2 hours per day at 25 cents an hour, you would earn $15.50 per month, but in order for advertisers to make a profit and your referrer to make a cut, the average active user has to spend more than they earn - a lot more.
On their company blog, Agloco claimed their business model is based on the assumption that they can pocket 10% of the revenue generated. So, if Agoloco gets 10% and your referrer gets 5%, that means your $15.50/month requires a revenue of $17.82.
Now in all honesty, if human beings paid attention to these ads, it would be a great business idea to hijack the advertising capability of every site on the internet. I mean just look at how rich Google is doing roughly the same thing with Adsense. But unfortunately, we humans have something called “banner blindness”. This happens when a person is exposed to advertising too often and in the same manner, so our minds gradually become numb to what is being advertised until we no longer pay attention to it.
I’ve lost track of how many times while watching TV I’ve commented to my girlfriend how lame one commercial was, only to get the response: “What? Sorry, I wasn’t paying attention”. The only reason I still pay attention is due to my tiny experiences in taping shows back in my teens, so now I tend to look for flaws and presentation errors. I rarely remember the product being advertised, but I can tell you how poorly written or overpaid whoever created the ad is.
Then you also have the fraud issue. Back when alladvantage was in its heyday, you could download programs specifically created to confuse the ad bar into thinking you were watching it even if you weren’t at the computer. It got even worse when people figured out how to both confuse the ad bar and hide it from your screen at the same time, so you were essentially being paid for doing and seeing nothing.
All in all, I personally was quite surprised when a number of the A-list bloggers started pushing this program, especially since most of them have been around the block long enough to know that nothing has really changed with the business model or society’s acceptance of advertising… but I suppose even great minds can be seduced by a truly passive income stream.
While I feel for the families who will no doubt be affected by this, I really have to shake my head over why they tried to bring this flawed dinosaur back.
