Ad Finitum?'s founder tries to create a sustainable business

Madison Avenue is going crazy over a site that — ironically — has never advertised itself., a portal that hosts 1,900 television commercials and ad news, has become a happy place where creative types can go to see their competitions work and boast about their own.

But while the site has gained a large following, its founder admits AdCritic cant survive under its current revenue model.

Peter Beckman, AdCritics CEO, started the site as a hobby a little more than two years ago. The former manager at an Internet service provider liked watching commercials, and he thought others would also like to see them online via streaming video.

Advertising agencies, companies that produce commercials and advertisers quickly became glued to the site. AdCritic lets viewers comment on some commercials, which translates into free, raw feedback for industry players. Advertisers also like the fact that their expensive 30-second spots can be replayed for as long as the site exists.

Elizabeth Jamison, who conducts sales at ad production company, submitted spots to AdCritic that her company produced for cable channel FX Networks. "Theyre the kind of spots that people arent seeing unless they go to award shows, and we thought they were really good work," Jamison says. "It was a place to put them on and allow people to see them."

Most of the 100,000 people who come to the site daily are in the ad industry, Beckman says. The ads usually come from advertising agencies, but not all are submitted voluntarily; Beckman pulls some from TV broadcasts. AdCritic, based in Falls Church, Va., now charges agencies a submission rate of $1,000, up from $250 before this years Super Bowl. Beckman raised the price relative to the sites increase in traffic in the weeks after the game, which he says quadrupled and has remained steady ever since.

AdCritic, which has 11 employees including Beckman, also receives revenue from a small number of companies that pay to advertise on the site. In addition, AdCritic solicits donations from fans through Amazon.coms Honor System program, which lets people donate money to their favorite content sites. But Beckman doesnt expect either the submission fees or banner ads to keep the site running. He hopes a larger revenue stream will come from value-added services that AdCritic can bill agencies, such as conducting online focus groups.

"Theyll be able to post commercials that are half-done at 3 a.m., and before the client gets in, they can have hundreds of responses from people who had been surfing on the site overnight," Beckman says.

To build out such premium services, Beckman needs cash. He recently went on the road seeking investment from companies involved in streaming media, hosting or media encoding services.

But there are a few complications in Beckmans plans. Jeremy Miller, public relations director at the agency TBWA/Chiat/Day, says the idea of Internet focus groups is interesting. But the thought of using AdCritic as a forum for that makes him laugh. "You wouldnt want your competitors to see a spot that way," Miller says. "I dont see us testing work on there."

Furthermore, many ad agencies are reluctant to submit ads because its not clear whether they will need to pay actors who appear in commercials posted at AdCritic. A recently negotiated contract with the Screen Actors Guild specifies that actors must be paid every time a commercial runs with the intent of selling a product.

Ira Shepard, who represented advertising agencies in negotiations with SAG last year, says AdCritic serves a different purpose and doesnt fall into that category. "Its a critique of the professionalism of the commercial, so its not covered by our contract," Shepard says. Beckman agrees his sites intention is to promote interesting commercials, not products.

SAG takes a different view. "We believe it falls under the Internet provision of the contract, and that performers must be paid for those usages," says SAG spokesman Greg Krizman.

In addition to the legal questions, Beckman may have trouble finding companies willing to pay the higher submission fee. "I cant imagine an agency putting their work up there for $1,000," says Marianne Flatley, director of communications at ad agency DDB New York.

As for the AdCritic brand, Beckman hasnt tried to strengthen it through advertising. Instead, he depends on word-of-mouth and keyword searches to drive traffic to the site, saying his money is best spent on paying for bandwidth.

If Beckman gets funding and agencies pony up for AdCritics enhanced services, he may be among the first to make short-form Web entertainment succeed as a business. If not, AdCritic may find itself in critical condition.