The PayPerPost Virus Spreads

Two new services that are similar to the controversial PayPerPost have announced their launch in the last few days: ReviewMe and CreamAid. PayPerPost, a marketplace for advertisers to pay bloggers to write about products (with our without disclosure), recently gained additional attention when they announced a $3 million round of venture financing.

The PayPerPost model brings up memories of payola in the music industry, something the FCC and state attorney generals are still trying to eliminate or control. Given the distributed and unlicensed nature of the blogosphere, controlling payoffs to bloggers will be exponentially more difficult.

Our position on these pay-to-shill services is clear: they are a natural result of the growth in size and influence of the blogosphere, but they undermine the credibility of the entire ecosystem and mislead readers.

ReviewMe is backed by Text Link Ads, a long time TechCrunch sponsor. It has not launched yet but was announced earlier today. Like PayPerPost, ReviewMe is a marketplace that allows advertisers to pay bloggers to write about their products. There are some significant differences in the business model, though. Where advertisers on PayPerPost set a single fee that is paid to all bloggers regardless of their size, ReviewMe uses an algorithm based on Alexa, Technorati and other statistics to determine the importance of a blog and charges a different fee for each blog based on the calculation. To their credit, ReviewMe requires bloggers to disclose that they are being paid for the post, and advertisers cannot require a positive post (PayPerPost makes disclosure optional and advertisers can require positive posts).

While we applaud the fact that ReviewMe requires disclosure and prohibits advertisers from requiring a positive post, we still think the very act of paying bloggers to write about a product is a very bad idea. Frankly, we’re not happy that one of our sponsors has launched this type of service, and we’ve notified them that we will not allow promotion of ReviewMe through TechCrunch.

CreamAid launched earlier this week. The service is similar to PayPerPost but requires bloggers to include a Flash widget in the post that links to CreamAid and also shows other blog posts that have discussed the product. There does not seem to be a requirement that bloggers write positively about a product, but there are few details on the site. Part of the goal of CreamAid seems to be to build a social network around paid posts using this widget.

My hope is that PayPerPost quickly requires disclosure by bloggers and eliminates the ability for advertisers to require positive reviews. It’s clear that simply stating we don’t like these services isn’t going to make them go away. VCs are now involved and PayPerPost has a large number of bloggers on their payroll that are willing to attack anyone that says it’s a bad idea. Given the very low likelihood of government involvement similar to the effort to eliminate payola in the radio industry, I’m not really sure what can be done to reverse the trend. In the end, individual bloggers will have to establish and maintain their own credibility.