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Unrepentant PayPerPost Gets Funding

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| Video Product Reviews: An Idea Worth Five Stars? ?

October 02, 2006

Unrepentant PayPerPost Gets Funding

Rob Hof

Three months after getting slammed by BusinessWeek's Jon Fine, TechCrunch's Marshall Kirkpatrick, and a gazillion bloggers, PayPerPost is crying all the way to bank. The Orlando-based startup, which matches advertisers with bloggers willing to write about their products for $2 and up per post, will announce on Tuesday that it has netted $3 million in venture capital. The Series A round was led by Inflexion Partners, with Village Ventures and Draper Fisher Jurvetson participating.

"PayPerPost is poised to redefine the concept of advertising as we know it," founder and CEO Ted Murphy says in the press release. "We intend to create the world's largest network of consumer content creators and show advertisers how to utilize the creativity and voice of the masses. It's marketing by the people, for the people."

So, why did it get slammed? Because Murphy is stretching this "by the people, for the people" thing. Bloggers are getting paid to write about products without having to disclose that payment, which by any measure is deceptive. What's more, advertisers can--and usually do--specify that those bloggers must write positive comments on the product. As Jon notes in his column, headlined "Polluting the Blogosphere," "shilling without disclosure is a bad idea."

In a TalkCrunch podcast with TechCrunch's Mike Arrington and me, Murphy and DFJ partner Josh Stein make a valiant effort to defend their business model--which they claim has already attracted tens of thousands of advertisers and produced revenue of well over $100,000. The podcast lets them speak for themselves, but it's clear they think "the market" will sort everything out, so a requirement for disclosure isn't needed.

Maybe, maybe not. I don't know if PayPerPost will run into the same kind of trouble that Procter & Gamble's "word-of-mouth marketing" unit Tremor has for lack of disclosure. But I suspect the market, which includes blog readers as well as advertisers that don't want to be branded as deceptive, ultimately will demand some kind of transparency. And with the intensely interactive nature of blogs, they're in more of a position to call out blogs--and advertisers--that don't provide it.

Mike has more on TechCrunch.

12:01 PM

TechCrunch, advertising, blogging, blogs

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? Controversial PayPerPost Raises $3 million from Techcrunch

We first covered PayPerPost on the day it launched - June 30, 2006.

The service is a marketplace for advertisers to pay bloggers to write about products for a fee. Commenters to our original post wee polarized into those violently for and those again... [Read More]

Tracked on October 2, 2006 03:21 AM

? Episode 13: PayPerPost Raises $3 million from TalkCrunch

See TechCrunch for the details on PayPerPost?? announcement of its $3 million Series A round of financing by Inflexion Partners, Villiage Ventures and Draper Fisher Jurvetson. Michael Arrington and Rob Hof at Business Week, took a few minutes tod... [Read More]

Tracked on October 2, 2006 03:23 AM

?? PayPerPost: A Bad Idea from Content Matters

Business Week is reporting that startup PayPerPost has received $3M in funding from Inflexion Partners, Draper Fisher Jurvetson and Village Ventures. The scam business model behind PayPerPost is pretty simple. Advertisers can pay bloggers to post (posi... [Read More]

Tracked on October 2, 2006 03:26 PM

?? Pay per Post vs. TechCrunch from Jeff Barson's Nimble Blog

I got the sweetest little iPod Shuffle yesterday to replace the mini that was 'smash-and-grabbed' from my Landrover 6 months ago. (The new Shuffle is the cutest little thing. You just want to play ... [Read More]

Tracked on November 14, 2006 06:10 PM

PayPerPost raised $3 million from Inflexion Partners, Village Ventures and Draper Fisher Jurvetson. This is when you known that paid advertising on the Internet has gone too far. Marshall over at TechCrunch humorously points out that PayPerPost pollutes the Blogosphere and asks bloggers to sell their souls. Rob Hof over at BusinessWeek spoke to the CEO:

"PayPerPost is poised to redefine the concept of advertising as we know it," founder and CEO Ted Murphy says in the press release. "We intend to create the world's largest network of consumer content creators and show advertisers how to utilize the creativity and voice of the masses. It's marketing by the people, for the people."

Read More

Posted by: Mr Wave Theory at October 2, 2006 06:54 AM

Thanks for the coverage Rob. Ted has created a marketplace without trying to be the morality police for publishers, advertisers and audiences. When you serve the mainstream (rather than the elite) there isn't one size that fits all and PPP will make sure tools exist to make everyone comfortable. Personally, I believe a large chunk of advertisers and bloggers will choose disclosure and PPP's ranking system will help the system drive towards quality.

PPP is still in the beanie-baby phase that eBay started with, but there are some exciting things on the drawing board!

My research over the last 3 months shows a win-win-win for publishers, advertisers and audiences. The discipline and incentive that comes from a market system drives value for the whole CGM ecosystem.

Thanks again Rob!

Posted by: Dan... at October 2, 2006 07:54 AM

First, a remark: I'm not for this kind of business. I've never relied on this to start blogging. But I'm not condemning PPP as the new 'KKK'.

Nevertheless, some remarks:

1) It depends on how bloggers are able to flag their paid post. They say paid posts will be reviewed, and refusal imply a possible resubmit. There's a possibility in there to alarm readers that they aren't reading a truly personal post. If you start writing your post by "I wanted PPP to pay me my next month of beers", I guess it won't harm your credibility that much.

2) The traditional paper press has been doing this for quite a decade. Once in a while, readers stumble on a double page, full of colors and nice pictures, and they start reading paragraphs before some of them notice a kind of "promotional" tag.

3) Studies on blog showed that about a half of the 50 million blogs tracked by Technorati are spam blogs. (Only for the English part.) And PPP would increase this tendency. People would be enticed to copy-paste someone else's writing on specific topics to make easy money. Even if PPP could track a million blog, they can find out who's plagiarism or not.

Posted by: Nuno at October 2, 2006 03:00 PM

$2 per post to sacrifice your credibility? what garbage. You can easily make more money than that with search-based advertising on a blog if you're even partly paying attention.

I expect what will happen here is that spammers will find some way to scam this system, adding to the ever-growing plague of splogs. Joy.

- Amy Gahran

Posted by: Amy Gahran at October 2, 2006 03:32 PM

What Amy said ...

Posted by: Jon Husband at October 3, 2006 11:57 AM

Seems like a clever way - but of course - Google is smarter than almost anyone realizes. They will be able to determine which posts were paid for - and punish the buying website accordingly. Right?


Posted by: danny at October 3, 2006 01:16 PM

PayPerPost's scheme is not like product placement in a movie. You go to the theatre to watch a movie, and a movie is what you get. That's a clean transaction. It's not significantly affected by the exact brand of instant soup eaten by one of the characters.

Now, if the Company of the Ring settled down in camp just short of the Hollin Gate, and made a big deal out of boiling water so they could all enjoy some Lipton's instant soup, and then they all sat around comparing lengthy notes on which kind of Lipton's instant soup each character liked best; and if after that the plot took every conceivable opportunity to show the peoples of Middle-Earth making and eating Lipton's instant soup -- then, moviegoers would have cause for complaint. The product placement deal would have warped the primary transaction between moviemakers and moviegoers.

The primary transaction for journalists and bloggers, the thing they're saying to their readers, is: =This is what I know. This is what I think.= To a certain extent, they're saying: =This is what I am.= There's no way you can pretend that that transaction has not been bent and broken if the subjects being written about, and the opinions being expressed about them, have been bought and paid for by an unmentioned third party.

Murphy's "new idea" is anything but new. There's even a word for it: payola. It's a corrupt and deceitful practice, and everyone knows it. That's why the arrangement has to be kept secret: the bloggers who do it will have no credibility once the truth comes out. The undeserved credibility they'll have until that day is the thing the advertisers are buying.

Forget what Ted Murphy says. Would his plan "redefine the concept of advertising as we know it"? Sure it would -- the same way that spam did. PayPerPost doesn't utilize the creativity and voice of the masses, it exploits it. All his grand talk about his scheme is just a come-on to make prospective writers feel better about his offensive and degrading offer.

It would be bad enough to have bloggers whoring themselves out this way, but working with PayPerPost makes them cheap whores. Two bucks a throw? That's just sad. It's peanuts, compared to what clients pay PR firms to get their products mentioned in print.

What PayPerPost proposes to do is not a legitimate advertising practice. It's not an exciting new idea. It's just sordid.

Posted by: Teresa Nielsen Hayden at November 30, 2006 12:06 PM

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