In a major failing and breach of trust with it’s users, Entrecard has announced some unusual rule changes. No April Fools joke, this appears to be Entrecard’s last ditch attempt to save itself. (Their last investor was seen packing his suitcase). For those who are not on their mailing list, here is a list of upcoming changes:
- In a week, we’re launching an ad network where anyone can advertise through Entrecard widgets for CPM rates. This can be run of network advertising, or targeted by category. We are making available 50% of our inventory, or approximately 40 million monthly impressions.
- With the money we make, we are going to buy credits back from you. You will be allowed to sell credits via your dashboard, and we will devote 75% of daily sales to buying credits back.
- The economy will no longer be in a state of inflation, but rather in deflation which means your credits will gradually start becoming more valuable.
- For all this to work, we must institute an above-the-fold rule, which goes into effect in a weeks.
- What if I don’t want these ads on my site? We have always prided ourselves in being a service that offers you complete control over what does and does not appear on your site. Yet, at the same time, we’re forced to mitigate this ideal with our decision to launch a more traditional ad network, as a way to make you money, restore the economy to balance, and make some money for ourselves. We will continue to allow you to reject any ad you wish. However, to reject ads from paying advertisers, you will need to pay a credit fee for each ad you wish to reject. We don’t know how much this will be just yet.
Now, what does this mean to the average Entrecard user? Lets go through the points one by one.
1. This effectively doubles the ad price of all advertising on Entrecard. Their ridiculously high daily ad prices will now only show your ad 50% of the time.
2. There is no stated buy back price. When there is, watch out. Besides bloggers being banned from networks like Today.com, there will be other repercussions. Once the price of credits is officially established, every United States Entrecarder now has to report taxes on ads. That’s right, trading something with an established value is considered barter income by the IRS. The value is whatever Graham decides to charge the paying advertisers. Not to mention all the people Graham banned for frivolous reasons over the years. Will they now be able to press criminal charges against Entrecard for theft? Graham “Asshat” Langdon, felon?
3. I thought the original 75% tax rate was supposed to cure inflation. The truth is any time you manufacture credits from thin air, you have inflation. EC prints money, plain and simple. Dropping cards isn’t work, it’s just a pain in the ass.
4. Above the fold rule? Go f–k yourself. Like people need some failed blogger to tell them how to run their website. How dare he? Entrecard is lucky if anyone runs their crappy widget, let alone demand it be above the fold.
5. Entrecard is going to charge you to take the crappy ads off your site? Isn’t that nice of them. How much does it cost not to get punched in the face?
So, anyone actually happy about the changes over at Entrecard?
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Yep.. thats all i have to say.. I am fairly new to the “scene” I have only been on EC for MAYBE 2 months. I was VERY active on the forums and did purchase some ads..
This is just disgusting.. But to me, the absolute WORSE thing is the FEE TO REJECT ADS!!! They are basically making all of the money and then tossing you a bone like you are a dog waiting for table scraps.
Everyone, do yourself a favor.. Find a REAL BLOG ads network like CMF and then fill up ALL of your ABOVE THE FOLD AD SPACE for affiliate advertising that will pay you out quadruple time.
I agree, as soon as I received the email my account was officially canceled. I want control over ads. Any way I have goggle for that and looking into that cmf thing.
That’s ridiculous to tell members how to run their blogs. CMF Ads gives you full control, and they don’t charge you “not to show ads”.
This is ridiculous. To think I used to think there was quite a bit of intelligence underneath that silly hat, seems as if I was wrong.
You summed it up nicely Turnip. It seems that now since there is a general outcry against the ‘above the fold’ mandate, they have stated that they will now allow ‘exceptions’. How they will determine who can have an exception and who can’t has not been stated.
Though, if this does cause a mass exodus from EC, then perhaps CMF should be strategically positioned as to snap up those disgruntled EC’ers.
I was looking for a reason to finally drop ec even though I haven’t run any advertisements on my blog in a few weeks. I don’t think Entrecard will fail outright as there are way too many users that don’t know or care what is going on.
Point #2 you make is absolutely false. There can be no tax liability for monies accrued by Entrecard to the end user or blogger who made no money from the sale of ads. If that were true then those taxes would apply to CMF users as well.
If you sell credits there is a possibility of having to pay taxes but you and I both know Entrecard won’t buy credits back at any significant price so the chance of paying taxes will be nill.
Talen: #2 is absolutely true. It’s called “bartering” and you can read about it here: http://www.irs.gov/taxtopics/tc420.html
“A barter exchange or barter club is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis. ” Because Entrecard is selling the same ad space and buying your credits, your non-commercial exchange just became a commercial exchange”.
Entrecard is 100% a barter club for credits. CMF Ads could fall under the same rules. The difference is that at Entrecard you run hundreds if not thousands of ads. At CMF Ads, the person runing the most ads probably ran 50 ads. When a person cashes out, they will indeed receive a tax form, which we will keep on file. If the value is over $600, it will be reported to the IRS. At CMF Ads, that would be about 2400 Ads having run.
Note, because Entrecard charges a much higher rate, the average user probably runs about 4k ads per year, putting their “Barter Worth” easily over the $600 threshhold.
what an ass hat.. might be time to update the blogspot…. http://entrecardsucks.blogspot.com/2008/12/i-am-asshat.html
The whole situation is ridiculous. I’m not surprised at the uproar, it feels like the community is being used by Entrecard.
I have to disagree on the first point, it won’t really make any difference. Instead of users being willing to pay up to 1/5th of the popularity for an ad, it’ll now be 1/10th. (still too high in my opinion).
On the other points, I agree completely. Hopefully Graham will see sense.
John, I wasn’t talking about the actual cost of the ad in credits. I meant that the prices will probably stay around the same for most sites, but since your ad is only shown half the time, you are paying double. It doesn’t really matter. No advertiser in their right mind would ever advertise on Entrecard. Here is why:
Say I want to sell some crappy e-book. Entrecard is willing to sell me ad space at a cpm of $1. (Thats $1 per 1000 impressions) Normally, an advertiser would expect out of 1000 ad impressions, anywhere from 500-1000 people to view that ad. However, not the case with entrecard. Johnny Card-dropper will visit 300 sites, all displaying the same ad. 50% of the time he will see my e-book ad. This means I just spent 150 impressions out of my 1000 on one person! All it takes are 8 hard core droppers to use up 1000 of my impressions.
What about scripters interested in selling credits back to EC? It’s happened before, and everyone knows how poorly things are policed there. No advertiser with a brain will advertise on Entrecard unless they are advertising a scam. Then they don’t care. It will be garbage in, garbage out. But why pay to do that, all you have to do is submit a blog, get it approved, and then redirect it to your virus infected adware site. Repeat daily.
This is nothing but a pathetic last ditch atttempt by boy blunder over there trying to ram some hastily thought out scheme down the throats of his members to save his network. Maybe he should have gotten his ass off the couch before his investor left, not after it was too late.
EC claims their economy grew by 15 million credits last month. Using his own figures, if he makes $1000 a day on ads, he will be buying back credits at the rate of $1 per 1000 at most. (1 million credits is 1000×1000) With 44 million credits, he would require 44k dollars to buy back all the credits in circulation. Never going to happen. Do you want to sell your credits for $1 per 1k?
Is your time wasted dropping cards worth more than $1 for 1k credits? Don’t expect EC to be selling them back at that rate either. It’s like a carrot on a stick, but the carrot has been dipped in crap. Don;t even get me started on the BS “Virtual Economy”. You people pay a 75% bogus tax, but what about real taxes? IRS will be calling, mark my words, once a monetary value can be established.
You heard it here first. June 2009 the server will be turned off at Entrecard as we know it.
Take a look at this forum post from Graham about a respected community member who’s complained publicly about the changes:
“yeah… you have such a problem with the staff, moderators, service and policies just pack your bags and see ya later. I won’t have people like you disrupt peaceful and intelligent conversation geared at everyone gaining a deeper and clearer understanding of our new policies. We don’t have the time to waste when so many good natured people are asking real questions and looking for clarifications… only to get muddled by the mud you’re throwing around.
Someone kick this guy off the forums and out of Entrecard…”
Link: http://forums.entrecard.com/showthread.php?t=11568
I saw that. It was the rudest post I have ever seen a person running a company make. Disgraceful.
I must be warped because I couldn’t wait to come and see what you posted about all of this ec mess.
Very amused with some of the lines in the post Turnip … namely;
Graham “Asshat” Langdon, felon?
Above the fold rule? Go f–k yourself.
How much does it cost not to get punched in the face?
Great stuff … keep it up!!!
I’m torn between trying to register entrecardsucks.com and doing a whole blog on GL’s asshattery (I mean he just keeps giving out Great Material for _that_ site) OR organizing a class action lawsuit…is nincompoopery illegal?
I’m sure Grahm Reads this as well as still monitoring Twitter – Right Grahm? (oh you new guys to EC didn’t know about that little Fact? Ooops.) I’ll be interested in seeing how all this falls out and if Turnip is right about the June beheading of EC.
Another Great post Turnip.
Beamer
Beamer: Yes, GL’s he’s a regular reader. Just check his twitter activity vs the post date of certain articles on turnipofpower.com. He only twits to do damage control. I guess I can post a new article tomorrow now that EC has flip-flopped on yet another part of their plan. Expect a flurry of twitter activity as a response.
I’m the vocal disgruntled member who was told to get out by Graham. He is following what I blog about and my tweets. Waving high at GL! A really ticked of day of negative EC tweets caused him to remove the feed from the EC blog. Now I had to write another article on My Journey because EC refuses to delete my other four blogs that were linked to my main blog. I figure he’s trying to inflate the number of actual blogs on EC in a timely fashion to try and get advertisers. I twittered that post as well. Delete my blogs from that dictatorship and I will be a happy camper! Looking at the forums there are a lot of concerns over they types of ads that will be run.
Garden Gnome
He can lie all he wants about the number of blogs, I have the real number. It’s half of what he claims, and of those, many have no widget on them.
I’m over Entrecard. Its going from my site when the currently booked ads run out next week. Whatever useful purpose it served initially, and it was good for finding new blogs to read, has long gone. What crapped me off mostly, aside from all the childish goings on, was the difficulty I was having actually productively spending all the credits I accumulated.
I was going to wait to get rid of EC, but Graham encouraged me to bail. It’s odd that someone running a network that is about to try to get advertisers would want people to abandon ship.
The rudeness of the owner is shocking. Forget discussing ideas, it’s always “my way or the highway”, when he clearly hasn’t thought out his own plans. He’s had almost 1 1/2 years to come up with a plan, and suddenly everything is so urgent.