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


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  1. identicon
    Rich Kulawiec, 11 Dec 2007 @ 4:23am

    Agloco, affiliates, abuse

    I pre-emptively blacklisted Agloco the moment I was aware of its existence. Given AllAdvantage's long history of spamming, and Agloco's "business plan", it was obvious to the casual observer that it was only a matter of time until the abuse started. So good riddance to them -- although I'm sure the people behind this fiasco will no doubt try again.

    More broadly, one of the lessons that some still have not learned is that "affiliate programs" are abuse magnets. They're structured in such a way as to provide heavy incentives and light (if any) penalties, so there is every motivation for affiliates to spam, game search engines, deploy adware, etc. This is now such an established pattern that I'm beginning to conclude that it's simply not possible run an affiliate program properly -- that is, without causing it to generate widespread abuse of Internet networks, systems and users.


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