In light of the recent StormPay events, there is a lot of discussion going on about the validity of the GPT programs around the web. Much of the problem with StormPay started out with StormPay basically telling 12DailyPro that they weren't allowed to use other payment processors and then it did nothing but escalate from there.
At first my opinion was really simple. StormPay were making it difficult for people to get the money they "earned" by autosurfing. But the problem goes deeper than that also. A lot of the PTR programs have also been cut off by StormPay.
So whats all the big fuss over? Well, in the case of the PTR programs, I'm not sure I can follow the argument there. But in the case of the autosurf programs I have finally come to a conclusion and am now fully aware of how these programs make their money.
Read the full post for my take on it all.
Now, let me make it clear, these only become a Ponzi scheme the instant you give them money. Up to that point, its purely a Traffic Exchange. There is absolutely nothing wrong with a traffic exchange, but there is everything wrong with a Ponzi scheme.
My purpose in this post is 2 fold. One, to make you aware of what is actually going on behind the scenes. Secondly to try to help you avoid falling in to the pit many millions of others have. In my case, my skepticism kept me from making a massive mistake and the whole thing costing me a significant amount of money. All up, its only cost me the equivelent of a pack of smokes. I think I can handle that loss.
However, I was lucky in that regard. The truth is, the idea of auto-surfs is so enticing that I would've easily spent more money on them. Quite simply, the idea of such massive returns is just too good to be true. In my case, the one I'm using the most returns %1 daily. Thats 365% in a single year. Thats absolutely massive. And thats nothing compared to other programs out there that offer 5% daily, 6% daily, 12% daily. In some cases, I've even seen up to 20% daily with a payout in 6 days.
So what makes a Traffic Exchange different to a Paid To Surf program?
For starters, you're paying for a service instead of investing. With a Traffic Exchange, there is no promise of return except traffic to your site. You do not receive a financial reward and nor should you expect any. If you don't want to pay for the traffic, then you can simply use their surf program (initially Manual, but more and more autosurfs are taking over) to earn credits which can be exchanged for traffic to your site.
A traffic exchange is a sustainable business. It offers a service, not an investment scheme. This is an important distinction.
On the other hand, many auto surf programs offer an investment scheme that allows you to invest $5-$10 (sometimes less or more) and in exchange, they'll give you a return of X% on that investment for every day you use their program.
These programs are often also Traffic Exchanges in that you can buy traffic credits or you can surf for them. However, the promise of a return of investment is what turns them in to a Ponzi scheme. We're talking massive amounts of return that cannot possibly be achieved through legitimate investment programs. 15-20% in a whole year is generally considered a fantastic return on the stock market. But its also very rare. With many of these programs, we're talking 365% or more in a year.
The instant you "invest" money in a traffic exchange with an expectation of some financial reward or return, you are losing your money to a Ponzi scheme.
Quite simply put, the only way you will ever get a profit from this scheme is to be first kid on the block. The likely hood of that happening? Almost 0.
What happens is quite simple. The first person puts in their coin with a promise that in X days/weeks/months they'll get a significant profit back. Say, 44% (in the case of 12DailyPro.) Then, the people running the scheme got and get 2 more people to invest money in to the scheme. They then take that new money and use it to pay the original invester. That person thinks things are going absolutely great and will often reinvest their money. This means that the person running the scheme doesn't have to pay out, just provide a "statement" of how much the person has and it goes on from there.
In the terms of autosurfs, this is known as compounding.
This is a classic trick of the scheme in that it gives the impression that people are earning more money than they really are. If you start to compound your investment, all you're doing is perpetuating the scheme longer. If you are able to, get your money out and run. Don't look back.
I have been fortunate in that I've only lost $10 cash to one of these schemes. However, the other side of the Traffic Exchange coin cost me significantly more than that.
If you are a Google AdSense member, you should not in anyway participate in a Traffic Exchange program. Banner exchange is fine for the most part, but a Traffic Exchange program will immediately breach the terms of the AdSense program and you will be removed rather quickly. This happened to me. I lost over $90 in earned income that was waiting to be sent to me, plus all future incomes beyond that.
This is particularly annoying because AdSense is the only program of its type that will accept New Zealand based and targetted websites. Yahoo! do not accept sites that do not have a US/Canada target audience. Neither does MSN, Kanoodle and the many others that are out there.
This means you have to rely on programs that might not be as successful and definitely not as profitable.
My advice to you is simple. If you are not a Google AdSense (or Yahoo!/MSN equiv) member, then you can use Traffic Exchanges as long as any advertising you do have does not explicitly disallow it. However, at absolutely no point should you invest any money in to the traffic exchanges in the expectation that you might earn that money back. Any money you invest should be seen solely as advertising expenditure. Not as a way to make money.
And this is how I see the $10 I spent. Its a way for me to advertise my sites. I use 3 traffic exchanges to advertise SKC Hosting. The traffic you get is pretty useless, but at the very least its getting your site in front of eyeballs and the more they see your site, the more it sticks in their mind. They might not buy, but they might remember and suggest it to others.
That is also partly why I still link to Traffic Exchanges. The more people using them as Traffic Exchanges, the more my sites advertising will be seen. This is on top of advertising such as the Google AdWords I pay for every month. But I would never recommend anyone spent any money on a Traffic Exchange site unless they were viewing it as an advertising expenditure. It really is that simple.