The New Lure of Internet Marketing

By: Scott KirsnerWed Dec 19, 2007 at 12:24 AM

Web sites need customers -- they just can't spend to get them. The result: marketing schemes in which companies don't pay until customers do. Welcome to the Kickback Economy.

There's also the chance that kickbacks will get kicked in the teeth by unrealistic expectations. "Let's face it: Marketing is math," says Tom Gerace, 29, cofounder and chief marketing officer of Be Free Inc., which helps Net companies wage pay-for-performance campaigns. "Companies that ignored that fact and talked a lot about building huge brands and creating buzz burned through a lot of cash. And now they're turning to performance marketing, thinking it can save them. It certainly won't save everyone. But I don't think that gives the idea a black eye."

Underhanded or under-the-table no longer, kickbacks on the Web are earning an honorable reputation -- and may even help stabilize the foundations of some online businesses.

Scott Kirsner (kirsner@worldnet.att.net) is a Fast Company contributing editor.