BrightSpot Looking for a Ray of Light

BrightSpot Media, a startup that was trying attract people to watch ads in exchange for goods and services, last week shut down its consumer-facing site.

Over the holiday, we got in touch with BrightSpot CEO Aaron Martens, who confirmed the shutdown but said the company is still trying to find a way to make it work. He gave us a few specifics:

As a result of taking down the site, we have cut back our staff to be primarily focused on engineering and not on operations. Additionally, we have eliminated the majority of our sales organization as most of our relationships will continue to be strategic. Our board members are absolutely still behind our company and our vision. Funding is always an ongoing process and the majority of our actions have been predicated on supporting the best interest of our shareholders. Our existing shareholders and new shareholders are squarely behind this next step. Will it be in the form of BrightSpot Media…I am not sure at this time.

Adweek, citing unnamed sources, said BrightSpot was “nearly out of cash, without venture capital leads and seeking to license its technology platform to a third party.” Martens said BrightSpot is working on new alternatives to the CPM ad pricing model that would bring together consumers and the products in which they might be interested, but did not disclose specifics.

Martens also maintained that — which targeted ads based on user preferences, feedback, and demographics — was too expensive to maintain while the company shifted strategy. “We have not been happy with the overall consumer experience on our site because we simply didn’t have enough ads for our members to watch.” Advertisers, he said, were reluctant to use the site because it didn’t have a large audience.

The BrightSpot corporate site remains live. As of just a month ago, the company was making a big PR push, announcing it would show its one millionth video and asking about speaking slots at our NewTeeVee Live conference.

While we agree that Internet advertising too often depends on mass-market advertising analogies, we’d been skeptical of startups like BrightSpot offering people a conscious choice to watch ads, and rewarding them for it. For a trend piece I wrote last summer, I spoke with Nat Goldhaber of Claremont Creek Ventures, who had founded and led an advertising-in-exchange-for-content platform called Cybergold back in the mid-nineties.

“Frankly, I don’t think this idea is as relevant as when we tried it 10 years ago,” he told me, saying advertising and subscription business models on the web have only gotten more effective. And of course people will game any such system, making up fake profiles and racking up views that are of no value to advertisers.

With the amount of money currently available in online advertising, we have to believe that troubled companies’ problems come from places other than the market. But since Martens is determined to keep on trucking, we’ll keep you posted on his progress.