For at least one company, the concept of paying consumers to read ads online is turning out to be more like fool's gold than real money in the bank.
Maritz, a St. Louis incentive marketing company, has halted the rollout of Goldmail, a service designed to reward Internet users for reading and responding to ads online. Maritz executives cited lack of advertiser interest as a factor.
"We're going to put ourselves into a hibernative state right now until we see where the market's going to go," said Bob Johnson, general manager of Goldmail. "It's really difficult to get [advertisers] on, because they're still debating the content vs. reward ad model."
CyberGold, a Berkeley, Calif., competitor to Goldmail, plans to launch its own service next month. But it says it signed at least 20 paying marketers, including Metropolitan Life Insurance Co. AT&T and Starwave Corp.
The companies last week settled a lawsuit in which Maritz charged CyberGold with trademark infringement and unfair competition (AA, July 15). Terms of the settlement weren't disclosed, although Maritz said the lawsuit's outcome had nothing to do with its decision to pull back Goldmail.
Goldmail conducted a single test of its service in July and was waiting to assemble a group of advertisers before proceeding. That expected influx never happened, although Spiegel, Hammacher-Schlemmer and Michael Genovese Jewelers agreed to participate.
NO MONEY UPFRONT
None of the marketers committed any money upfront, said Dawn DeCost, Goldmail ad director.
Both Mr. Johnson and Ms. DeCost are taking other positions within Maritz; Mr. Johnson is moving to Detroit as VP-marketing of the Detroit office, while Ms. DeCost will be reassigned next month.
CyberGold, a startup company, said it has 100 marketers participating in a free beta test.
"We will have at least 20 paying advertisers when we launch," said Nat Goldhaber, president-CEO. Advertisers will pay about $25,000 for a six-week test, Mr. Goldhaber said.
Hearst Corp. currently is using CyberGold as a banner testing service but isn't sure it will commit actual money to the launch.
"It feels a little bit untargeted for what we would do," said Brian Sroub, VP-marketing.
Analysts question consumers' interest in reading ads for rewards, but Mr. Goldhaber believes his system, which involves sending cash payment to users, is more appealing than Goldmail's plan to offer a selection of gifts and merchandise.
Copyright September 1996 Crain Communications Inc.