reading revenue

as featured in
Daren Cotter,
founder, CEO,
(front) CotterWeb
and Keith Olson
reading revenue
CotterWeb pays people to read email offers
and targeted on-line sales pitches
by Joe Delmont photos Silas Crews
Emerging company
: cotterweb
Daren Cotter,
founder, CEO,
CotterWeb
BizBriefing
Headquarters: Mendota Heights
Inception: 2000
Employees: 22
Revenue: $6.9 million in 2006, estimated $11
million in 2007
Description: CotterWeb Enterprises is a leading
provider of online loyalty marketing services
through its Web properties InboxDollars™.com
and SendEarnings™.com. CotterWeb provides
its more than 3.9 million loyal members the
opportunity to be rewarded for participating in
various product and service trials, marketing
research surveys and other online activities, such
as shopping and playing games. The company
provides advertisers and marketing research firms
an efficient means to reach a targeted online
audience and to pay only for performance.
Website: www.cotterweb.net
reading
CotterWeb
pays people to
read email offers
and targeted on-line
sales pitches
revenue
by Joe Delmont photos Silas Crews
W
ould you like to use the Internet to target
customers and actually get them to respond?
If so, Daren Cotter has a proposition for you,
one that has proven to deliver active customers to the sites
of his advertisers.
It’s a fairly simple approach, really. He pays people
to read email solicitations and participate in Internet
projects. And he pays them again if they actually click
through and participate on a site. He makes his money
when a company pays him for the prospects that he
brings to the site.
Each time one of CotterWeb’s members completes
a transaction with one of the company’s advertising or
research clients, that organization pays CotterWeb a
commission for the completed transaction. A portion of that
commission is then credited to the participating member’s
account. Upon request from the member, CotterWeb sends
the member a check.
No traffic, no cost to you. He takes the risk, but
it’s been paying off for close to seven years. Today,
he has nearly four million consumers signed up for his
programs, including nearly one million members who
actively participate for the purpose of being rewarded for
their online activities, such as responding to emails from
the company’s clients.
This cash payment is a major point of differentiation
between CotterWeb and its competitors, most of who pay
in some form of reward points, not in cash.
Commission payments to CotterWeb vary from one
penny to several dollars for each participation incident,
depending upon the quality of the traffic and the level of
involvement. Cotter doesn’t disclose other payment details.
Revenues at the privately held company based in
Mendota Heights have grown from about $250,000 in
2003, to $2 million in 2004 and to an estimated $11
million for 2007. Cotter kicked-off his company in 2000
while he was a student at Minnesota State University,
Mankato, and he continued to run it, largely as a hobby,
out of his dorm room until he graduated in 2004.
“Then I had to decide whether this was a career or just
a hobby,” says the 26-year-old entrepreneur. “I took a few
months and really focused on the company.” That included
reinvesting some of the previous proceeds into advertising
and promotion. The results were almost immediate.
“2004 was really the beginning of our company as a going
concern,” says Cotter in somewhat of an understatement.
At that time, the company didn’t even have an office.
Cotter worked in his basement in Woodbury; his mother,
Sandy, who provided customer services, worked at home in
Princeton; Mike Murzyn, director of marketing, worked at
Reprinted with permission of the publisher. ©2007 Metropolitan Media Group, Inc., all rights reserved.
Any reproduction of this document is strictly prohibited. For reprints call 952-767-2600.
January 2008
l
MinnesotaBusiness 3
Emerging company
: cotterweb
home in Milwaukee; and Brian Erickson, director
of online media, also worked out of his house in
Cottage Grove. Cotter, Murzyn and Erickson are
former college classmates.
In 2005, as things looked ready to really
take off, Cotter made perhaps the key decision
in the life of the young company. He realized he
couldn’t grow the business as it was organized
at that time. “I knew it couldn’t be a one-man
show,” says Cotter today. “I knew I had to
surround myself with good people.”
Enter Keith Olson, director of sales and
strategy, and Jack Johnson, COO, who has built
the company’s infrastructure and put together
the company’s first office. Johnson is the former
CEO of Active IQ, a NASDAQ company.
Olson, another old school friend of Cotter,
was working at Morgan Stanley on the east
coast. They had stayed in touch and initially
Olson began consulting for the company; soon
he was a full-time employee.
Today, the company has about two
dozen employees and
operates in a 4,000 sq.
LEADERSHIP &
ft. space that’s already
GOVERNANCE
too small. Cotter
expects to have more
Management Team
than 40 employees by
Daren Cotter, Founder and
the end of 2008, a
Chief Executive Officer
growth pace that will
Jack Johnson,
force a move to larger
Chief Operating Officer
quarters by mid-year.
Brian Erickson,
Cotter started with
Director of Online Media
a website dubbed
Mike Murzyn,
Director of Marketing
InboxDollars.com
Keith Olson,
and later added a
Director of Sales and
second similar site
Strategy
when he acquired
Joe Sosa,
SendEarnings.com
Director of Business
in August 2005.
Development
CotterWeb operates
the two sites, which
LEADER PROFILES
basically have the
Name: Daren Cotter
same backend strucTitle: Founder and CEO
ture. “There’s no real
Age: 26
Hometown: Woodbury
difference between
Education: Minnesota
the two sites,” notes
State University, Mankato
Cotter, “they have
First job: TDS Computing
the same business
in Princeton, Minn.
model and the same
Family: Wife, Sarah
basic structure. It
just makes more
4 MinnesotaBusiness
l
January 2008
“It’s been a blast to take us from the start
to where we are today. There’s a lot of
room for growth in the very near future.”
—Darren Cotter, founder and CEO, CotterWeb
sense to keep operating them separately.”
Testing the Program
Although most members only join one of the
websites, I signed up for both to see how the
program functions. I’ve only been a member
for a few weeks, but I did learn one important
lesson: Cotter is correct when he says it’s not
necessary to be on both sites. Unless you want
to devote an awful lot of time to opening email
from CotterWeb advertisers and market research
companies, he says don’t sign up on both sites.
The day I joined InboxDollars, I started
receiving emails from InboxDollar advertisers.
The source of the emails was identified as
InboxDollars in the email’s “From” line and the
subject line was simple and direct: “Paid Email
from InboxDollars.” How could I resist?
One of my early messages was from an
insurance company asking about my interest in
purchasing term life insurance. I was curious, so
I clicked through to fill out a simple application
and I was done.
Within days I received a phone call from
an insurance agent and then a letter with a
list of quotes. The whole process was direct,
informative and painless. And I’ll get paid for
participating. Not much, of course, only a few
cents per process, but that’s what I wanted.
In much the same way that I responded to
the insurance company’s solicitation, I could
participate in consumer research conducted by
market research firms. While it is possible to get
buried in email, that’s probably not all bad, since
that’s why you signed up in the first place.
And, as Cotter points out, the more you
participate, the more focused the email messages
become. This works because CotterWeb
develops a profile for you, with your approval,
so that the company’s clients can better target
messages to your interests.
“We don’t know anything about you when
you register,” says Cotter, “but we are building
information as you continue to use our website. It’s
only information on what you decide to share with
us; we let people choose at what level they share.”
CotterWeb continuously analyzes its membership and then contacts prospective customers when
it identifies an attractive segment of users. If, for
example, it identifies a group of members who are
interested in financial services, it would then contact
companies selling financial services to offer them
the opportunity of reaching this market segment.
Cotter sees plenty of growth opportunity.
Consumer advertising represents the largest
category of Internet ad spending, a hefty $8.8
billion in 2006, notes Cotter, pointing to research
from the Internet Advertising Bureau.
He’s very optimistic about a developing
member referral program that pays his members
in cash for each new member they bring in. “The
beauty of the program,” he says, “is that you will
see a benefit from referring friends and family
and you’ll get proactive reinforcement from their
activities. (You’ll get paid every time they get
paid.) We want to make sure members are fairly
compensated (for referrals).”
Cotter, who has no outside investors, expects
to “aggressively” continue the company’s growth
organically, without the benefit of acquisitions.
“It’s (been) a blast to take us from the start to
where we are today. There’s a lot of room for
growth in the very near future.”
Indeed, it’s been quite a ride from a business
based in four basements scattered across two
states to one that is growing fast enough to
require larger quarters every 18 months or so.
And it’s a ride that seems to be speeding up, one
click and one penny at a time. MB
Joe Delmont is an award-winning business writer
and editor based in St. Paul.
Reprinted with permission of the publisher. ©2007 Metropolitan Media Group, Inc., all rights reserved.
Any reproduction of this document is strictly prohibited. For reprints call 952-767-2600.