About Me 0003: about internet marketing

AdKeeper, the online advertising company led by About.com founder Scott Kurnit that lets consumers save online ads for later viewing, raised $35 million in Series B funding.

The round, led by Oak Investment Partners, comes as AdKeeper’s “Keep” button is set to roll out on online ads from AT&T, Best Buy, Ford and Gap on January 11, after a beta release in October. AdKeeper believes that consumers, although they profess to dislike ads, will actually save ads for later viewing if they find them entertaining or interesting. The company hopes “keeps” will become an ad metric along with impressions and clicks.

When interviewed by USA Today in November, Kurnit (pictured) said he wasn’t sure that consumers will actually save ads, though. “That’s the $64 billion question. If they do, then this is one of the top three or four class='blippr-nobr'>Internetclass="blippr-nobr">Internet companies ever,” he said, noting that research showed that 56% of Internet users want to save ads.

For his part, Ian Schafer, CEO of digital ad agency Deep Focus, says that AdKeeper could succeed if it offers some value to consumers. “If ad keeper equals coupon clipper scaled to the size of the Internet, then I’m bullish,” Schafer says. “If it’s ‘class='blippr-nobr'>Instapaperclass="blippr-nobr">instapaper for ads,’ then the odds of me ever going back to look at my portfolio of things that I (the consumer) generally would rather ignore are very slim.”

Oak, which has backed a range of companies including Caribou Coffee, Jamba Juice and The Huffington Post, joins current Investors Including DCM, True Ventures, Spark Capital and First Round Capital.

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Martin,

While I respect your efforts to warn would-be entrepreneurs about illegal schemes, your observations regarding multilevel marketing (MLM) are ignorant and unjustified. Please understand that I am not using the term "ignorant" derogatorily, but rather to describe your commentary as being ignore-ant of readily available historical, mathematical, and legal information about this industry and profession.

First of all, as a successful distributor, consultant, advocate, and court certified expert in the field of multilevel marketing, I am offended by your reference to my profession as a pyramid scheme only by a "matter of degree". There are well over 1,000 such companies in the U.S. alone, which is one of 80+ countries where it's recognized as a legal and legitimate form of business. You assert that they "all" sound like "get rich quick schemes" to you. How many of these several hundred MLM programs have you researched and evaluated? This business model has existed for 75 years, and includes not only Mary Kay and Lia Sophia, but also Shaklee, Avon, Discovery Toys, Watkins, Tupperware, Pampered Chef (owned by Warren Buffet) and many other good corporate citizens (over 20 of which are publicly traded). Your characterization of this profession does a grave disservice to the 30 million world-wide distributors, 20,000+ employees, hundreds of vendors, and thousands of investors associated with this industry.

You state "…the essence of an entrepreneur is creating something new and innovative, whereas an MLM is a traditional formula on an existing product…". And a typical Starbucks or McDonald's franchise is not? But this argument is academic considering the wide array of innovative products that have come from, or been popularized, by the MLM industry. For example, no one even heard of Mangosteen, Noni, Goji or Acai ten years ago. Today these "super fruits" make up a billion dollar world wide market, both within and outside of the MLM industry. Yes, some marketers of these fruit drinks do over-hype their products, and many untrained, unprofessional distributors do make unsubstantiated claims about them. But let's be clear in that this is an issue with how MLM is often packaged, not with the content.

Yet, you go on to claim that an upfront requirement to purchase marketing and training material (which is typically less than $50) that will better educate the new rep on how to properly promote their business is an "unnecessary and are inappropriate" red flag.

You go on to site online material such as Van Druff's “What's Wrong With Multi-Level Marketing?” as a credible source of information. This is in spite of the fact this article was originally written 21 years ago by an individual who has never participated in the profession he criticizes. This is one of the most ill-conceived and debunked anti-MLM article in existence, as is evident here: http://www.marketwaveinc.com/viewarticle.asp?id=7

Your suggestion to look for a formal home office street address is valid, however the existence of a toll-free number is virtually meaningless considering the ease in which one can now be obtained, and considering Bernard L. Madoff Investment Securities LLC had one. Furthermore, the BBB routinely issues low grades to MLM companies due to the "industry in which this business operates" – that is, until the company pays for BBB membership. Then the BBB will have no concern about the "industry in which this business operates" and will unconditionally award it at least an "A-" grade.

While I agree with your "red flags" #2, #3, and #4, when evaluating whether more income is coming from purchases of downline reps, per #5, you must also consider that, according to several states as well as the Federal Trade Commission, those downline reps can count as bona fide customers. As can be gleaned from this FTC letter to the DSA here, http://www.marketwaveinc.com/FTC_Letter.pdf, the FTC considers only the motive for buying the product, not what percentage is sold to non-distributor customers. And, in fact, many retail customers do choose to become reps, and most MLM reps are passionate, often to a fault, about their products.

You state, "you will need lots of family and friends to make it work" yet just a few sentences later you state "The Internet has made it so easy now. In the old days you had to actually visit people, or at least call them, to pitch your fabulous new opportunity." Your first statement is utterly false, while your latter statement is quite correct. While exposing one's product or opportunity to a friend or family member is still common (with the majority of industry leaders training to lead with the product), the majority of marketing is now done online and directed towards one's "cold market".

You further theorize that "Multi-Level Marketing” and “Network Marketing” were "sanitized terms" invented after Amway and others were charged with “pyramiding” back in the early 1970s. What you failed to mention was that the courts ultimately ruled Amway, and thus the MLM compensation model, was NOT an illegal pyramid. Furthermore, the term “Network Marketing” was coined in the early 1990s.

Finally, you do concede "there must be something to the business model" since "some big business icons like Donald Trump are joining in the MLM parade". Besides Trump you can include the afore-mentioned Warren Buffet, as well as Anthony Robbins, Robert Kiyosaki, Paul Zane Pilzer, Brian Tracy, Mark Victor Hansen, and Bill Clinton (http://www.youtube.com/DirectSelling411) as supporters of this profession.

Martin, pyramid schemes do often try to disguise themselves as legal, legitimate MLM operations – because they want to be perceived as legal and legitimate. And yes, we do suffer a guilt by association with illegal pyramid schemes, but this is due precisely to wholly inaccurate portrayals within the media such as yours.

Thank you for considering, an allowing me to present, an opposing point of view.

Len Clements

Founder & CEO

MarketWave, Inc.
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Monday, January 10, 2011

about internet marketing

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