Last year the company formerly known as “AllAdvantage” (also once described by Forbes as “the dumbest dot com” and by another publication as “the bloated whale of Silicon Valley”) re-emerged as AGLOCO. As described by the company itself, the concept is pretty simple: “By downloading our proprietary ViewbarTM technology, members benefit from engaging content tailored to their interests. AGLOCO™ also pays its members to refer their friends to the community (and for those friends to refer more friends through four levels of extended referrals.)”

Who wouldn’t want to sign up for a service that pays you to surf the web? Hey, I signed up for both AllAdvantage and AGLOCO, as did millions of others. Indeed, I have a friend that recently spent about $10,000 of his own money buying AdWords keywords to get people to sign up under him on AGLOCO. Risky, sure, but if the concept took off and you had tens of thousands of people surfing the Web resulting in a referral fee to you, it would be a good investment.

Well, apparently, the concept is not taking off . . . again. This morning I got the following email from AGLOCO:

“We would like to update you on the status of AGLOCO’s operations. We continue to believe in the AGLOCO concept, but our revenue is currently not sufficient to give Members a meaningful distribution. And though there are increases in membership, the resulting revenue is not enough to support operating costs. As a development team we are unable to continue to use our savings to fund the operations. If any Member would like to pursue continuing the operations of AGLOCO, you may contact us at .”

You know things aren’t going well with a company when they send an unsolicited offer to sell the business to the entire membership base.

I still happen to believe in the concept between All-Advantage-AGLOCO. Pay consumers a commission in exchange for getting extra behavioral data from that consumer. That in turns enables you to highly-target advertising to that consumer, which advertisers will pay dearly for.

Think of it as a privacy advocate’s worst nightmare but an advertiser’s wet dream. You think Facebook’s “Beacon” program was invasive? AGLOCO would be much more so. How much do consumers value their online privacy? Apparently at a rate of around $.50 an hour.

The difficulty is building behavioral targeting technology (and building a big enough stable of advertisers) that is good enough to make money at a $.50 per hour rate. With the current CPM rates online at between $2-$4 for one thousand impressions, you are going to need to do something pretty fantastic to get advertisers to pay $.50 for something like 10 to 20 impressions (a CPM of perhaps $25).

I can still see it happening, but as All Advantage, Cyber Gold, and AGLOCO have already discovered, this isn’t something you can build in a few months. And now that the concept has apparently failed twice, consumers are going to be a little more wary the next time. Whoever steps up to the plate next better have a good eye and a strong swing, or this concept will be out on strikes.

1 Comment

  1. Gopi December 10th, 2007

    The biggest problem is the kind (penny pinching, cost sensitive) of consumer this kind of programs attract!.

Leave a Comment

David Rodnitzky
David Rodnitzky is founder and CEO of 3Q Digital (formerly PPC Associates), a position he has held since the Company's inception in 2008. Prior to 3Q Digital, he held senior marketing roles at several Internet companies, including (2000-2001), FindLaw (2001-2004), Adteractive (2004-2006), and Mercantila (2007-2008). David currently serves on advisory boards for several companies, including Marin Software, MediaBoost, Mediacause, and a stealth travel start-up. David is a regular speaker at major digital marketing conferences and has contributed to numerous influential publications, including Venture Capital Journal, CNN Radio, Newsweek, Advertising Age, and NPR's Marketplace. David has a B.A. with honors from the University of Chicago and a J.D. with honors from the University of Iowa. In his spare time, David enjoys salmon fishing, hiking, spending time with his family, and watching the Iowa Hawkeyes, not necessarily in that order.