REPORT ON E-BUSINESS

Get paid to surf by cash-for-clicks firms
More than a dozen firms are paying surfers in exchange
for bringing more targeted audiences to advertisers

SEAN HOLMAN
Special to The Globe and Mail
Friday, June 9, 2000

Like millions of Canadians, Vancouverite John Chow spends a lot of time surfing the Web. But unlike many others, he gets paid to do it.

Mr. Chow belongs to Hayward, Calif.-based AllAdvantage Inc., one of the largest of more than a dozen so-called "get-paid-to-surf-the-Web" services in the United States, which pay members 20 to 50 cents (U.S.) for every hour they spend on the Internet.

For Mr. Chow, one of thousands of Canadians who have signed on, it's been lucrative. Since joining in November, he's made nearly $13,000 (Canadian) -- representing about a quarter of his income. "I could make this my biggest income source if I really wanted to," says Mr. Chow, whose real job is to run The Tech Zone, a Web site that reviews computer hardware.

So why would anybody pay Mr. Chow to surf? In return for the money, AllAdvantage, like similar companies, requires members to download a program that brings up a small advertising window at the bottom of their computer screens. The window appears every time surfers go on-line, displaying a constant stream of small ads.

Get-paid-to-surf companies sell that ad space to other businesses that get access to customized audiences of Internet cruisers. By keeping a record of the sites the surfers visit, the cash-for-clicks companies can develop advertising profiles of their members and make sure the ads shown in the windows match their interests.

For this more targeted audience, advertisers pay fees based on the number of times they want their ad shown in the window, or how often the ads are clicked on. For example, Advertising.com Inc. of Baltimore, another cash-for-clicks company whose GetPaid4.com service has more than a million active members, charges advertisers $3 to $6 (U.S.) for broadcasting an ad 1,000 times. Alternatively, they can pay 30 cents to $1 every time their banner ad is clicked on, says Chris Parente, vice-president of communications, who adds that the company requires surfers to periodically click on the ads.

Mr. Parente says such ads have advantages over TV commercials.

For one, he notes that when companies buy TV time, they reach mass audiences they know almost nothing about. But by matching the ads with surfers who have shown an interest in such products, get-paid-to-surf-the-Web services help companies reach more likely potential buyers.

Electronic ads also make it easier for consumers to buy products being pitched. When TV viewers see a commercial for something they want, they must go to a store to buy it. Not so with paid surfers. Clicking on an ad immediately takes them to the advertiser's Web site, where they can make purchases on-line, Mr. Parente says.

And matching ads with interested surfers means they're more likely to respond to them. Mr. Parente says that the banner ads featured in his service's windows are clicked on two to three times more often than other banner ads.

That's the kind of response that companies such as Coupons.com Inc. of Palo Alto, Calif. -- one of more than 1,500 advertisers AllAdvantage says have signed up since last July -- want to see.

"I think if you put [on] a strong enough message and target it at a customer, you should get a response. And though banner ads are annoying, they do still catch our eye if the message is right," says Lauran Bloom, marketing director at the on-line coupon clearinghouse.

Still, most surfers won't get rich by joining one of these companies. Many place a limit of 15 to 75 hours on the number of on-line hours they'll pay for; as a result, most surfers will make no more than $40 and as little as $7.50 a month.

"In some cases, we can come close to offsetting any kind of connectivity charge they're paying to their Internet service provider," Mr. Parente says.

Members such as Mr. Chow can make bigger bucks, however, by persuading others to sign up, too, because companies such as AllAdvantage pay extra for recruiting new members. Mr. Chow has brought almost 8,600 new surfers to AllAdvantage, which has more than five million members in total; most of his recruits joined after reading an article he'd written about the company and published on his site.

Though it sounds like a win-win situation, some observers warn there could be hidden costs to joining a get-paid-to-surf company.

For one, says Internet consultant and author Jim Carroll, anyone who signs up with a service gives it access to a lot of personal information. "I don't think it's worth it because I don't think people have really thought about what can go wrong if they give away too much of their private information."

Bob Gellman, a Washington-based privacy consultant, says Web-site records can tell a company a lot about you -- everything from your personal habits and interests to your sexual preferences.

This information, he says, may be misused by get-paid-to-surf firms or sold to other businesses eager to get their hands on millions of files of detailed personal data.

Industry players have tried to allay these concerns. For instance, AllAdvantage says it will never release personal information about individual members to its advertisers, though it does provide them with general demographic information about their surfers. Other firms have established similar policies.

But Mr. Carroll says not all of these companies may live up to their promises. "My experience has not been good with companies who have promised to respect my private information," he says.

However, privacy concerns don't bother members like David Gul, AllAdvantage's No. 4 money-maker, whose commissions -- almost $5,500 a month -- helped him fly from his Illinois home to Paris for the recent millennium celebration. "For that kind of money, forget the privacy," he says.

As well, he notes that AllAdvantage's Internet-tracking software can be turned off, allowing surfers to go on-line in complete privacy. The company won't pay, however, for on-line activity it can't monitor.

But there are cracks even in that. Surfers have discovered they can download "cheat programs," such as MyAdvantage, that make their computers randomly surf the Web, creating the illusion they're in front of the computer. Cash-for-clicks firms are trying to develop ways to detect the cheats.

That's not their only problem. Some experts believe they'll have a tough time attracting enough advertising dollars to offset the costs of maintaining large bases of paid Web surfers. AllAdvantage, which is planning to go public, noted in registration documents that, in the nine months ended Dec. 31, it had revenue of $5.3-million - far less than the $20.1-million the company said it paid its stable of on-line members.

As well, Internet expert Rick Broadhead also has doubts about how effective a form of advertising those windows really are. "Some studies have shown that people become just oblivious to ads after a certain amount of on-line time."

All that evidently hasn't deterred advertisers. Among the high-profile companies that have signed on with AllAdvantage are Microsoft Corp., Cable News Network (a unit of Time Warner Inc.) and Nabisco Inc.

Nor has it given second thoughts to surfers such as Mr. Chow. "If you take it seriously, you can make a decent living out of it," he says.

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