Goes Dark

NEW YORK, a 14-month-old site that launched with the proposition that consumers should be rewarded for watching ads, has gone dark.

The company sent a notice to its members that the site is no longer in operation, promising that it would use member feedback—”what has worked well and what has not worked as well”—to “develop the next iteration” of the service.

Brightspot CEO Aaron Martens in an e-mail confirmed the company is rethinking its approach. “Advertisers have been relatively slow to adopt new models when it’s so clear they absolutely need to change their thinking,” he said.

According to sources, the Scottsdale, Ariz., company is nearly out of cash, without venture capital leads and seeking to license its technology platform to a third party.

Brightspot was one of a clutch of companies looking to turn consumer ad avoidance into a business opportunity by letting users choose when to watch ads. Its premise was to reward consumers for their time watching ads with the lure of free services, like discounts on online audio broadcasts of NBA games and video game service GameFly. For instance, watching 10 spots from a roster of advertisers would entitle a user to $5 off a $21.95 monthly subscription to GameFly.

The company has a roster of well-heeled backers, including Phoenix Suns president Jerry Colangelo and Chicago Bulls and White Sox owner Jerry Reinsdorf. Former McDonald’s CMO Paul Schrage has also advised the company.

Its model, which only charged advertisers when their spots were viewed, attracted big brands, including Ford, McDonald’s, AIG and Miller.

Other startups are trying a similar approach to Brightspot. E-Miles promises members airline miles in return for watching ads, Blyk offers cell service, AdPerk lets viewers earn magazines and BrandPort awards cash.

The question remains whether the lure of compensation, which in many cases works out to minimum wage for consumers’ time, is enough to ensure their participation..

Rather than compensate ad viewers, other services have adopted an ads-as-entertainment model. Honeyshed, a joint project of Droga5 and video production company Smuggler, launched last month in beta. It features attractive young hosts discussing products. Firebrand, which began testing earlier this month, takes a more straightforward approach: it shows current and old TV spots on its site.