Is This Type of "Referral Marketing" MLM?

"Buy 1 for yourself and get the chance to sell your friends and family 5 and get your downline started!" We examine the multi-level marketing industry, where only the people who come up with the ideas make any money, and everybody else is left unhappy, broke, and tired of reading scripts and selling overpriced vitamins and similarly worthless products. Includes Global Prosperity, Pinnacle Quest International, IRS Codebusters, Stratia, and other new Global Prosperity scams.

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igorhorst

Is This Type of "Referral Marketing" MLM?

Postby igorhorst » Wed Sep 12, 2012 7:23 pm

Frequently, I come across certain websites that offer you money if you contribute "content" to these websites. Essentially, you can write whatever you want (so long as it does not violate their terms of services), and if you let them post it on their website, they will give you a share of their ad revenue whenever people come to click to view that article. But...
(A) they decide how much of that "share" that they'll give you
(B) they decide how much money you have to accumulate in your account before you can "cash out"
(C) they can ban your account before you reach the "cash out" line so they don't pay up

...so, it's probably not really worth your time to work there.

Signing up to these "content mill" websites are free, however, as it takes a lot of time to produce "content" (even if you are just engaging in blatant "copy and paste" plagiarism) and that they get the lion's share of the ad revenue, it's clear that these websites in question end up profiting. It's a rather exploitative relationship.

What's curious however is that some of these "content mill" websites want to get a leg up on the competition and are willing to pay for 'referrals'...and their referral systems looks rather suspicious. Generally, they go along the lines of this:
We have designed a referral program where you earn extra 10% of the earnings earned by your referrals for the lifetime. For example, if you referred a columnist who earns $5.00 for every thousand views that his column generates, then you are automatically entitled to earn $0.50 for every 1K views from us. And there is no limit on this. You can refer as many columnists and can earn as much as you want to.

I don't want to name the website (if only because I don't want to accidentally engage in commercial advertising and violate the TOS of this website), but you can Google that above text to find it.

This system concerns me a bit. On one hand, it does make some sort of sense to compensate people for referring others, and I could see why some of these websites would want to differentiate itself from the competition.

However, the exact method of the referral program seems...bad. I would have liked a flat fee contingent on the person starting work in the program: if someone made $1 from the program, you get your $0.10 referral fee, and then that's it. Receiving "lifetime" payments make it seem that the referrals are actually 'downlines'...even if there is only one layer of downlines.

I also read an article on Yahoo! Voices that claims, "[T]o have any real success with any of these earning sites a person needs to have referrals, and the more the better." That also concerns me. As the only draw to contributing to these websites in the first place is to make money, it seems that a system where the only way you make money is bringing other people into the program...would be ultimately unsustainable. Only the people on the top will make money, just like in an MLM, after extracting as much "content" as possible from the 'downlines'.

As I do not know whether this system is legitimate or not, I decide to ask you guys (who had experience with other MLMs). Is the type of referral marketing I described above a 'MLM scam'?

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Re: Is This Type of "Referral Marketing" MLM?

Postby Gregg » Wed Sep 12, 2012 9:17 pm

If you're not paying anyone to sign yourself up, it's not really MLM. I generally hold that no one can be ripping me off if I don't pay them anything.

The rest of the merits of the site I'll leave to you. If you want to write for them under their terms, have at it.
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Re: Is This Type of "Referral Marketing" MLM?

Postby notorial dissent » Thu Sep 13, 2012 12:24 am

I'm curious as to who actually holds the copyright once it is posted?
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Re: Is This Type of "Referral Marketing" MLM?

Postby Unidyne » Thu Sep 13, 2012 5:32 am

Do a "WHOIS" search on Networksolutions.com to see who owns the website. If the domain ownership is hidden by a proxy service, the owners don't want you to know who they are. That in itself is a red flag.
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Re: Is This Type of "Referral Marketing" MLM?

Postby Arthur Rubin » Thu Sep 13, 2012 6:04 pm

I used to make about $300 a year on a product review site, which has a similar referral policy. I don't see anything wrong with it.
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Re: Is This Type of "Referral Marketing" MLM?

Postby igorhorst » Mon Sep 24, 2012 6:37 pm

notorial dissent wrote:I'm curious as to who actually holds the copyright once it is posted?

It depends on the "content mill", but most content mills I seen let the author keep the copyright over his material, but that mandates the author gives the "content mill" a perpertual license to host the material on their site.

This means that the author could "republish" his content on other content mills, if he wants. Some content mills only accept "original content", but that original content can be republished on another content mill after it has been created.

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Re: Is This Type of "Referral Marketing" MLM?

Postby Arthur Rubin » Tue Sep 25, 2012 9:48 pm

igorhorst wrote:
notorial dissent wrote:I'm curious as to who actually holds the copyright once it is posted?

It depends on the "content mill", but most content mills I seen let the author keep the copyright over his material, but that mandates the author gives the "content mill" a perpertual license to host the material on their site.

This means that the author could "republish" his content on other content mills, if he wants. Some content mills only accept "original content", but that original content can be republished on another content mill after it has been created.
I don't know the present policy at <site redacted, to avoid advertising>,but, as far as I know, copyright has always been held by the author, and the publisher has perpetual license to host the material on their site and in (at least) print and broadcast advertisements, if not a complete perpetual license to republish. The policy on other publication by the author has been, at various times:
  • No online submission other than to the author's personal web site.
  • <redacted> must be the first online submission (other than to the author's personal web site)
  • <redacted> must be the first publication (disregarding the author's personal website, but including print material)
  • No restriction on other online presence, but the author must certify that he has the copyright and permission to post (e.g., no submission to another web site which had restrictions the first restriction above).
Last edited by Arthur Rubin on Tue Sep 25, 2012 9:50 pm, edited 1 time in total.
Reason: removing identifying information which might be considered an advertisement
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