May 13 2009

Why an Investment surf does not mean its a ponzi

A lot of traffic exchanges ban so called ‘investment surfs’ and auto-surfs, and with reason.

BUT, and this is a big BUT, many are confusing facts with perceptions and heresay.

Before I explain, I want to clarify what I mean by certain terms, so that there is no mis-understanding.

Autosurf – sometimes called non-click surfing, are traffic exchanges that automatically rotate advertised websites in your web browser without requiring any additional intervention by the ‘surfer’
Manual Surf – sometimes called click surfing, are traffic exchanges that rotate advertised websites in your browser when the surfer ‘interacts’ with the page – either by clicking on something, or hovering their cursor over something.
Investment Surf, sometimes (inaccurately) called Paid-To-Surf or autosurf, are traffic exchanges (Autosurf OR Manual surf) where to earn money surfing, members must pay a fee and are then promised a certain return on their fee. The “investment” is claimed to be a membership or upgraded membership fee and the “return”, a per-site commission.This fee can usually vary from a few cents to tens of dollars, and the minimum and maximum is set by the site operator. The program then offers a commission based on the member’s account level for viewing a minimum number of sites, for example, for a period of X days, every day that the member views Y sites, Z% of the upgrade fee will be credited and can be withdrawn from the site. The product of Z% and X is always over 100% to ensure that the member makes a profit.

Now, the problem with this model is that in order to generate the funds necessary to make this payment, the program owner has to get the money from somewhere else. If the program is not generating enough non-membership fee revenue to meet these payments, then the only options are to not pay, or use the fees from newer members to pay older members and so heads straight into the realms of ponzis and pyramid schemes.

However, it is possible to generate enough revenue from other, non-member fee sources to cover this. Possible sources of revenue are:

  • Banners
  • Text Ads
  • Upgrades
  • Credits
  • Non-Member adverts

The other aspect that will affect the feasability of the payment structure is the amount and frequency of payments made – it is going to be harder to maintain a 110% of investment every 10 days than it is to maintain 105% of investement every 50 days.
The problem being, the first option is going to attract more people than the second one, even though the first one is less likely to be sustained.

So, to run an investment surf over a longer term, you need to actually discourage the traditional ‘quick buck’ member, for one who is prepared to look longer term and accept lower payments, as in addition to meeting the members payments you will also need to pay for the normal running costs of a online program. Ironically this is actually the type of member often found on the traditional non-investment surf traffic exchanges, yet often these are the members who are frightened off by the tales of scams and failed programs.

Now I started by saying that many exchanges ban investment surfs with reason, and that is because many owners do not plan how to grow their exchange in a sustainable manner, and so the exchange runs into cash-flow problems and fold leaving members unpaid. Which creates bad feeling, and bad publicity, for the Traffic Exchange industry as a whole.

So, in summary:

A investment surf, if carefully managed, with sustainable investment and payment models can survive and prosper amongst other non-investment surf models.
Many investment surf programs will fail due to poor management.
Because of these 2 facts, a newcomer to the traffic exchange industry would be advised to avoid starting their first exchange on the investment surf model until they have more experience of how traffic exchanges work from an administrative perspective.

By • General, Internet Marketing, Traffic Exchanges • 2