AdMatrix Review: Holland enters Indian scam market
With the news yesterday of India applying laws dating back to 1956 to modern internet companies, it seems India is set for a flood of offshore based companies entering the market – each wanting their share of India’s booming pyramid scheme scam sector.
One of the newer startups is the AdMatrix, based out of Holland (the Netherlands).
Headed up by Anne Wessel, the AdMatrix are claiming that their advertising model, ‘participative matrix marketing’, is far more effective than traditional forms of television, cinema, online and print advertising?
Because those watching the advertisements actually want to.
The AdMatrix claim that via the more traditional methods of advertising delivery, consumers have become adblind. They site statistics on television advertising time in a given hour in the US and television users habits of changing channels when ads come on.
With the AdMatrix model, viewers have to watch an entire ad, as failing to do so results in them not getting paid.
Sounds good in theory, but unfortunately AdMatrix’s participative matrix marketing is not without it’s own drawbacks.
Well, that and the fact that the AdMatrix compensation plan is heavily geared towards recruitment.
Read on for a full review of the AdMatrix MLM business opportunity.
The AdMatrix product line
AdMatrix claim to sell their members something called the ‘AdMatrix Review Journal’. AdMatrix claim this is a ‘a monthly periodical and necessary for your knowledge update‘.
One would assume that the AdMatrix’s members are complete morons if they need to be educated on how to watch advertisements every month, but then of course there’s the far more simpler explanation that the AdMatrix Review Journal is just a token cover for the recruitment driven compensation plan.
The AdMatrix Review Journal will set you back $240 for a two year subscription (and as far as I can tell cannot be purchased for one year alone).
This $240 also provides members access to what the AdMatrix call the ‘AdStation’. The AdStation is the delivery method utilised to deliver advertisements to its members.
The AdMatrix Compensation Plan
The AdMatrix compensation plan can be broken up into seven income streams. Without recruitment, AdMatrix members are looking at an income of just $10 a week (meaning a zero return of profit during the subscription period members must pay for to join AdMatrix).
If we bring recruitment into the equation however, of which 6 out of the 7 income streams available through AdMatrix are based on, this income can be grown into the thousands.
1. Personal Income through watching advertisements
By becoming an AdMatrix member, it’s possible to earn up to $10 a week (24 month duration just to recoup your subscription purchase), by watching advertisements the company provides to you.
This is a set cap and there’s no way to increase it.
2. Direct Referral Bonus
For each AdMatrix member you directly sponsor into the business, you’ll receive a one time payment of $20.
3. Binary Organisation Income
Despite calling it AdMatrix, at the heart of AdMatrix’s compensation plan is a binary organisation that pays out 6 levels deep.
A binary organisation starts with you at the top and branches out two arms underneath you. These two arms underneath you in turn also branch out into two arms and so on and so forth.
After a few levels, it starts to look something like this;
For each level that you fill in your binary organisation, you are paid out a residual commission of 20c per week per person in your downline. The payout levels are as follows;
Level 1 – 2 people paying out a total of 40 cents
Level 2 – 4 people paying out a total of 80 cents
Level 3 – 8 people paying out a total of $1.60
Level 4 – 16 people paying out a total of $3.20
Level 5 – 32 people paying out a total of $6.40
Level 6 – 64 people paying out a total of $12.80
Summarising the totals, you’re looking at recruiting 125 people for a grand total payout of $25.20 a week.
4. Binary organisation pairing bonus
As your binary organisation grows, AdMatrix members are also awarded a pairing bonus based on the pairing of groups on either side of their binary arms.
For each pair (2) of personally sponsored members that match up (one from the left arm and one from the right arm), the sponsor will receive an additional daily $20.
The pairing bonus is capped daily at $440 which equates to payment off 22 pairs (44 directly sponsored AdMatrix members).
Note that this is a daily bonus and at the end of each day your weaker arm is flushed, meaning you have to generate new pairs daily to qualify for the pairing bonus.
For example, let’s say in one day you personally sponsor 4 members on your right and 5 on your left. At the end of the day the calculation is 4 pairs ($80 payout) with 1 left over on your left.
Because the left arm is stronger (4 vs. 5 members), the next day you start off with 1 member on your left and 0 on your right.
If you don’t recruit any new members that day, you don’t get a pairing bonus.
5. Additional AdStation bonus
AdMatrix seem to be doing something incredibly dodgy with this one. If I’m understanding correctly, the company allows it’s members to buy in spots on their own binary organisation (the company is calling these spots ‘adstations’).
By doing so, members thus increase the $440 cap, depending on how many additional $240 spots they buy into.
For some reason, AdMatrix have taken it upon themselves to include this as an achievable bonus in their compensation plan, noting that with 768 AdStation matches (1536 AdStation buyins) the daily maximum income is $15,360.
Note of course that this is a payout calculated daily and the pairs are also reset. Obviously nobody is creating 1536 AdStations a day so why this has been included as a bonus is unclear (probably because potentially earning $15,000 a day sounds impressive).
6. Family AdStation Bonus
When an AdMatrix member buys in three times to their own binary matrix, they create four AdStations at which point this grouping is referred to as an ‘AdStation family’.
If you generate 10 Adstation families within 60 days of joining AdMatrix, you’ll be awarded a share in 2% of the monthly company turnover for that month.
Regardless of how many qualified members there are with shares, this payout is limited to $39,600.
7. Royalty Income
The Royalty Income is based on a monthly minimum generation of ten AdStation families a month. AdMatrix members who achieve this are rewarded a share in a pool made up of 1% of the monthly turnover of the company.
As you can see, the entire AdMatrix compensation plan heavily revolves around the recruitment of others. From this, the major critical point that I can’t emphasise enough is that with an initial $240 investment, without recruiting others, you’re looking at six months just to recoup your costs.
Obviously the incentive here is to go out and recruit others as nobody is surviving for six months just covering your initial investment.
Effectively, you’re playing a zero sum game without recruiting others for the first six months of your subscription.
By recruiting others however that recuperation period is drastically reduced. Especially when you factor in that you can buy into your own organisation unlimited times and fill up those 6 level deep binaries.
That in itself is a telltale that something isn’t quite right with AdMatrix.
Getting back to my additional point however, with AdMatrix having just launched, effectively they’ve set themselves up with a 6 month timebomb. Afterwhich the original members’ subscription fee period is up and we’ll really get to see if the entire AdMatrix business model is sustainable (without recruitment).
With members having recuperated their initial investment, the binary plan and AdStation family bonuses have to come from somewhere. Realistically this is going to be a combination of the continual signup of new members (and they themselves signing up new members), along no doubt with AdMatrix charging advertisers to broadcast on their network.
This brings me to my final point, are advertisers going to be attracted to the AdMatrix service?
AdMatrix claim that this ‘paid to watch’ delivery method of advertising is honest and ethical and for advertisers, offers the best value for money interms of reaching their target demographic.
But does it really?
Think about the mindset of AdMatrix members. Primarily they’ve joined the company to earn money, not because they’re genuinely interested in what AdMatrix’s advertisers have to offer.
Infact, with only $10 on the line per week from watching AdMatrix’s delivered ads, there’s actually no real incentive to watch them. Not at least when you compare the $10 to what’s on offer by recruiting others.
In this sense, you could effectively even strip the ad watching component of AdMatrix and just rely on recruiting others to the company. This is the key component in my certification that behind the glossy ad delivery platform exterior, AdMatrix is nothing more than a recruitment game – destined to fail within the initial two year subscription time bomb deadline… or possibly even earlier.
How on Earth does this deliver any sense of value to advertisers looking to use the AdMatrix advertising network? One would think broadcasting to a group being paid to watch your ads is quite an ineffective way to target your advertising campaigns.
Like Speak Asia however, it seems that because AdMatrix is based out of Holland, there’s little Indian authorities are going to be able to do to investigate. Not until they realise that laws created in 1956 are woefully inadequate to address today’s modern world of internet scams.
With AdMatrix having just launched (with an almost identical irrelevant subscription based service masking the recruitment based compensation plan as Speak Asia’s), I’m sure it won’t be long before we start seeing promises of income guarantees and wild success stories from AdMatrix members.
Join AdMatrix at your own risk.