Chairman-CEO Mark Goldston said NetZero hopes its move will help shift the metric for advertising efficiency away from click-throughs.
NetZero is simply guaranteeing what it already claims it was delivering. Rusty Taragan, general manager of NetZero's CyberTarget market-research division, said NetZero reviewed traffic it delivered to about 200 advertisers and found all saw some increase when they advertised -- with 90% getting at least 33% more traffic from the 2 million active NetZero users. NetZero will give make-goods if advertisers fail to see that 33% gain vs. the four weeks before they began advertising.
The promotion, which runs through Dec. 31, is available to new sponsors spending at least $50,000. The top 100 sites visited by NetZero users are excluded because NetZero executives said it would be difficult to generate such huge percentage gains to top sites.
The ISP is able to track traffic because users agree to let it monitor surfing when they sign up for the ad-supported service.
Mr. Goldston argued that when an ad campaign runs on NetZero, some users visit the site by clicking on the banner, but more users visit the advertiser's site on their own after seeing the banner.
"We believe that for the Internet in general, but for NetZero in particular, we can increase awareness, communicate your key points and drive more people to your Web site, which increases the potential for purchase," Mr. Goldston said.
NetZero introduces the program as it sees its user base grow while its stock price plummets. NetZero last month hit an all-time low of less than $3 a share. While "disturbed" by the low price, Mr. Goldston said he has enough cash in the bank -- $248 million as of June 30 -- to keep his business plan on track. NetZero lost $26.9 million on revenue of $18.7 million in the second quarter.