AllAdvantage
Encyclopedia
AllAdvantage was an Internet advertising company that positioned itself as the world’s first "infomediary
" by paying its users/members a portion of the advertising revenue generated by their online viewing habits. It became most well known for its slogan "Get Paid to Surf the Web," a phrase that has since become synonymous with a wide array of online ad revenue sharing systems (see, e.g., paid to surf
).
, Johannes Pohle, Carl Anderson, and Oliver Brock. During its nearly 2 years of operation, it raised nearly $200 Million in venture capital and grew to more than 10 million members in its first 18 months of operation. The company's practice of compensating existing members for referring new members led it to become one of the most heavily promoted websites of its time. That popularity was reflected in the ranking of AllAdvantage.com among the top 20 of many website traffic indices during most of the company's existence, including Nielsen/NetRatings. That method of promotion also led the company to be heavily criticized for its early inability to prevent its members from spamming
for referrals in order to collect additional income. It eventually overcame many of those problems and company executives were deeply involved in anti-spam legislative proposals, including the first anti-spam bill to pass the US House of Representatives
.
AllAdvantage ultimately fell victim to the sharp decline in advertising spending as the dot-com bubble
burst and the U.S. economy entered a recessionary period in mid-2000. AllAdvantage planned an initial public offering
of stock in early 2000, underwritten by investment banker Frank Quattrone of the firm Credit Suisse First Boston
. As the IPO market continued to sour through mid-2000, the offering plans were cancelled. The company continued to seek new sources of revenue and expanded its offerings to include sweepstakes. The company finally halted consumer-facing operations in February 2001. By the time it closed its doors, the company had paid out over $160 million to its members.
concept to reach a mass market. The concept of the infomediary
was first suggested by McKinsey consultants and professors John Hagel, III, and Marc Singer in their book NetWorth. (Hagel and Singer eventually became informal advisers to the company.)
The company's Viewbar software was one of the earliest desktop user tracking and ad targeting technologies. The Viewbar displayed advertisements in a narrow application window that could be docked to the top or bottom of the user's screen, targeting those advertisements to the content being viewed by the user as they browsed websites. The same technologies, minus the permission of users or monetary compensation, became the basis of the adware
and spyware
industries.
The company also appointed the world's first corporate Chief Privacy Officer
, creating the role as a senior level executive responsible for protecting the privacy and security of user data and managing a variety of risks and threats to the integrity of the service. The company appointed privacy lawyer Ray Everett-Church
to the newly created position in August 1999, sparking a trend that quickly spread among major corporations, both offline and online. By 2001, the non-profit research organization Privacy and American Business reported that a significant number of Fortune 500
firms had appointed senior executives with the title or role of Chief Privacy Officer. By 2008, the International Association of Privacy Professionals
boasted that it had more than 5000 privacy officers or other privacy executives as members.
AllAdvantage is perhaps most remembered for its successful adaptation of the "viral marketing
" concept, a term first coined by the venture capital firm Draper Fisher Jurvetson
. In viral marketing, members of the service promote it to their friends and acquaintances, which AllAdvantage enhanced by adding a compensation component, rewarding users for the number of members they successfully referred. In a May 2000 article for Red Herring
magazine, Steve Jurvetson cited AllAdvantage as a prime example of viral marketing success.
In a recent article, a former AllAdvantage executive also noted that, although the company didn't survive, the behavioral marketing approach pioneered by the company remains an important component of many businesses in the online marketing and advertising space.
AllAdvantage was also the target of other fraudulent activities, such as attempts to simulate surfing in order to accrue credit. These techniques were based upon the manner in which the AllAdvantage "Viewbar" tracked the time that users actively spent browsing the web, through the detection of which applications were "in focus" as well as keyboard and mouse movements. In an attempt to defraud the company, several client-side applications were created that attempted to simulate surfing-related interactivity, including "MyAdvantage" and "AllMouse." Initially, such applications were successful at simulating a user's 20 hours of surfing, however those applications were limited in their negative impact on the company for several reasons: their usage was limited to relatively few "hacker hobbyists"; fraudulent users received no direct compensation beyond the established minimum surfing time while the company received advertising revenues based on average surfing times of the entire user base. The AllAdvantage software was frequently updated with detection algorithms derived from analysis of many of the simulators and was able to flag "suspect" surfing accounts for withholding of any payments while giving users the appearance of still accumulating their fraudulent hours.
Infomediary
An infomediary works as a personal agent on behalf of consumers to help them take control over information gathered about them for use by marketers and advertisers...
" by paying its users/members a portion of the advertising revenue generated by their online viewing habits. It became most well known for its slogan "Get Paid to Surf the Web," a phrase that has since become synonymous with a wide array of online ad revenue sharing systems (see, e.g., paid to surf
Paid to surf
Pay to surf is a business model that became popular in the late 1990s, prior to the dot-com crash. Essentially, a company uses income from advertising placed on members' screens to pay them for time spent surfing....
).
History
AllAdvantage was launched on March 31, 1999, by Jim JorgensenJim Jorgensen
Jim Jorgensen is a serial entrepreneur. He has started over 25 enterprises since getting his MBA at Stanford Graduate School of Business at the age of 24. Jorgensen’s industry selection for these new enterprises has been wide, running from retail to manufacturing, from Internet to mail order, and...
, Johannes Pohle, Carl Anderson, and Oliver Brock. During its nearly 2 years of operation, it raised nearly $200 Million in venture capital and grew to more than 10 million members in its first 18 months of operation. The company's practice of compensating existing members for referring new members led it to become one of the most heavily promoted websites of its time. That popularity was reflected in the ranking of AllAdvantage.com among the top 20 of many website traffic indices during most of the company's existence, including Nielsen/NetRatings. That method of promotion also led the company to be heavily criticized for its early inability to prevent its members from spamming
E-mail spam
Email spam, also known as junk email or unsolicited bulk email , is a subset of spam that involves nearly identical messages sent to numerous recipients by email. Definitions of spam usually include the aspects that email is unsolicited and sent in bulk. One subset of UBE is UCE...
for referrals in order to collect additional income. It eventually overcame many of those problems and company executives were deeply involved in anti-spam legislative proposals, including the first anti-spam bill to pass the US House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
.
AllAdvantage ultimately fell victim to the sharp decline in advertising spending as the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
burst and the U.S. economy entered a recessionary period in mid-2000. AllAdvantage planned an initial public offering
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
of stock in early 2000, underwritten by investment banker Frank Quattrone of the firm Credit Suisse First Boston
Credit Suisse
The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...
. As the IPO market continued to sour through mid-2000, the offering plans were cancelled. The company continued to seek new sources of revenue and expanded its offerings to include sweepstakes. The company finally halted consumer-facing operations in February 2001. By the time it closed its doors, the company had paid out over $160 million to its members.
Industry contributions
AllAdvantage contributed several enduring concepts to the online marketplace. For example, AllAdvantage was one of the first implementations of the infomediaryInfomediary
An infomediary works as a personal agent on behalf of consumers to help them take control over information gathered about them for use by marketers and advertisers...
concept to reach a mass market. The concept of the infomediary
Infomediary
An infomediary works as a personal agent on behalf of consumers to help them take control over information gathered about them for use by marketers and advertisers...
was first suggested by McKinsey consultants and professors John Hagel, III, and Marc Singer in their book NetWorth. (Hagel and Singer eventually became informal advisers to the company.)
The company's Viewbar software was one of the earliest desktop user tracking and ad targeting technologies. The Viewbar displayed advertisements in a narrow application window that could be docked to the top or bottom of the user's screen, targeting those advertisements to the content being viewed by the user as they browsed websites. The same technologies, minus the permission of users or monetary compensation, became the basis of the adware
Adware
Adware, or advertising-supported software, is any software package which automatically plays, displays, or downloads advertisements to a computer. These advertisements can be in the form of a pop-up. They may also be in the user interface of the software or on a screen presented to the user during...
and spyware
Spyware
Spyware is a type of malware that can be installed on computers, and which collects small pieces of information about users without their knowledge. The presence of spyware is typically hidden from the user, and can be difficult to detect. Typically, spyware is secretly installed on the user's...
industries.
The company also appointed the world's first corporate Chief Privacy Officer
Chief privacy officer
The Chief Privacy Officer is a senior level executive within a business or organization who is responsible for managing the risks and business impacts of privacy laws and policies...
, creating the role as a senior level executive responsible for protecting the privacy and security of user data and managing a variety of risks and threats to the integrity of the service. The company appointed privacy lawyer Ray Everett-Church
Ray Everett-Church
Ray Everett-Church , is an American attorney, entrepreneur and author. He was dubbed "the dean of corporate Chief Privacy Officers" by Inter@ctive Week magazine, first creating that title and position in 1999 at online marketing company AllAdvantage...
to the newly created position in August 1999, sparking a trend that quickly spread among major corporations, both offline and online. By 2001, the non-profit research organization Privacy and American Business reported that a significant number of Fortune 500
Fortune 500
The Fortune 500 is an annual list compiled and published by Fortune magazine that ranks the top 500 U.S. closely held and public corporations as ranked by their gross revenue after adjustments made by Fortune to exclude the impact of excise taxes companies collect. The list includes publicly and...
firms had appointed senior executives with the title or role of Chief Privacy Officer. By 2008, the International Association of Privacy Professionals
International Association of Privacy Professionals
The International Association of Privacy Professionals , headquartered in Portsmouth, New Hampshire, is a global association of privacy and security professionals. With more than 9,000 individual and corporate members in 73 countries, the IAPP seeks to define, promote and improve the profession of...
boasted that it had more than 5000 privacy officers or other privacy executives as members.
AllAdvantage is perhaps most remembered for its successful adaptation of the "viral marketing
Viral marketing
Viral marketing, viral advertising, or marketing buzz are buzzwords referring to marketing techniques that use pre-existing social networks to produce increases in brand awareness or to achieve other marketing objectives through self-replicating viral processes, analogous to the spread of viruses...
" concept, a term first coined by the venture capital firm Draper Fisher Jurvetson
Draper Fisher Jurvetson
Draper Fisher Jurvetson is a venture capital firm based in Menlo Park, California with affiliate offices in more than 30 cities around the world and over $7 billion in capital commitments....
. In viral marketing, members of the service promote it to their friends and acquaintances, which AllAdvantage enhanced by adding a compensation component, rewarding users for the number of members they successfully referred. In a May 2000 article for Red Herring
Red Herring (magazine)
Red Herring was a technology business magazine, which flourished during the dot com boom, with global distribution and bureaus in Bangalore, Beijing, and Paris. It also sponsored conferences designed to bring venture capitalists, entrepreneurs, and technologists together. But the magazine went into...
magazine, Steve Jurvetson cited AllAdvantage as a prime example of viral marketing success.
In a recent article, a former AllAdvantage executive also noted that, although the company didn't survive, the behavioral marketing approach pioneered by the company remains an important component of many businesses in the online marketing and advertising space.
Fraud and Abuse
Many early AllAdvantage users attempted to utilize spamming techniques to artificially build up their referral numbers. In the first months following the company's launch, email service providers and anti-spam services identified emails referencing AllAdvantage as spam, resulting in widespread blocking. Shortly after hiring an anti-spam expert as the company's Chief Privacy Officer, the company implemented significant changes in its affiliate promotion and referral policies, including a system to enable quicker reporting and termination of spamming accounts. By 2000, the reported volumes of AllAdvantage-related spam had reduced significantly.AllAdvantage was also the target of other fraudulent activities, such as attempts to simulate surfing in order to accrue credit. These techniques were based upon the manner in which the AllAdvantage "Viewbar" tracked the time that users actively spent browsing the web, through the detection of which applications were "in focus" as well as keyboard and mouse movements. In an attempt to defraud the company, several client-side applications were created that attempted to simulate surfing-related interactivity, including "MyAdvantage" and "AllMouse." Initially, such applications were successful at simulating a user's 20 hours of surfing, however those applications were limited in their negative impact on the company for several reasons: their usage was limited to relatively few "hacker hobbyists"; fraudulent users received no direct compensation beyond the established minimum surfing time while the company received advertising revenues based on average surfing times of the entire user base. The AllAdvantage software was frequently updated with detection algorithms derived from analysis of many of the simulators and was able to flag "suspect" surfing accounts for withholding of any payments while giving users the appearance of still accumulating their fraudulent hours.