Yesterday Offerpal Media changed CEOs. Cofounder Anu Shukla, who just last week denied that her company engaged in any questionable advertising on social gaming applications, was replaced by veteran startup executive George Garrick. For all the background, see our Scamville post and the related updates at the end.
Garrick, who has been the CEO of Offerpal for less than 48 hours, is already taking a polar opposite approach to his predecessor. He left a lengthy comment, reprinted below, on a post earlier today about Facebook’s policy and enforcement changes around application offers.
The full comment is below. But he doesn’t beat around the bush.
Garrick admits that Offerpal made mistakes – “I have quickly concluded that regrettably, Offerpal has been guilty of distributing offers of questionable integrity from some of our many advertisers.” And he says that recent communications with partners stating that Offerpal was in compliance with Facebook rules were innacurate – “…we’ve also made some erroneous communications to partners and developers about the state of our compliance. In particular, we recently sent a letter to our Facebook developers which assured them that we were completely in compliance with Facebook standards, when in fact we were not.”
Garrick also makes a series of promises in the comment, including “any offers we distribute meet stringent standards of integrity and quality, as specified by our partners, credible industry experts, and good old common sense” and “we will do everything we can within reason to lead the industry and set the example in these efforts.”
Garrick is very much taking the Mark Pincus approach to dealing with this situation. He’s admitting mistakes and he’s promising his company will do better. Compare his words to Shukla’s a week ago. It’s night and day.
Offerpal Today:
I am the new CEO of Offerpal (as of yesterday) and although I’ve only got 48 hours under my belt, and have entered this industry in the midst of a recent firestorm of controversy, I thought it was time to share some of my thoughts and plans.
Direct marketing, in particular lead-gen, has always been full of questionable, misleading, and outright fraudulent marketers and offers. We all get these daily via snail mail, email, phone, and late-night TV. Unfortunately, this is the nature of the Direct Marketing beast.
Although a distribution channel which carries or distributes such offers does not actually create the offers, I do believe that a channel that wishes to be perceived as credible and of high integrity does indeed have a responsibility to make sure that the offers it distributes are not deceptive or “scammy”.
Over the last year, the use of offer-based payment systems such as Offerpal has skyrocketed, and it’s pretty clear today that the industry has not kept up with its explosive growth in terms of properly policing the offers that are being distributed.
I am not going to comment on events leading up to this situation, nor on other players in the industry, but I have quickly concluded that regrettably, Offerpal has been guilty of distributing offers of questionable integrity from some of our many advertisers.
The policies we’ve had up until now have not been thorough enough to prevent such offers from airing, nor has our organization had the proper focus and accountability to ensure quality assurance over the offers we distribute.
As a result, we’ve had a number of offers which were recently taken down by either ourselves or our partners. Although we believe that the majority of our offers were valid and not misleading in any way, we have acted conservatively by taking down the majority of our offers and we are now in the process of letting them back into the system after inspection.
However, we’ve also made some erroneous communications to partners and developers about the state of our compliance. In particular, we recently sent a letter to our Facebook developers which assured them that we were completely in compliance with Facebook standards, when in fact we were not. This was not a deliberate tactic of any kind, it was a mistake that reflected our ineffective checks and controls. But nevertheless, it was an inaccurate claim and for that we take full responsibility, and I apologize to Facebook and to their user community.
The good news in all this is that it has brought to light some very important issues for our collective industry which need to be addressed immediately. For our part, we will be doing the following:
1. It will be a fundamental part of the Offerpal culture that any offers we distribute meet stringent standards of integrity and quality, as specified by our partners, credible industry experts, and good old common sense.
2. We will individually inspect and approve every single individual offer before it is allowed to go into distribution on our system.
3. We will customize our offer profiles to meet the needs and standards of each partner and will not attempt to have a “one size fits all” approach.
4. We will do everything we can within reason to lead the industry and set the example in these efforts.
Over the coming weeks you will hear much more from us on this issue, but more importantly you will see action and results. I will remain personally involved in this initiative and consider it one of my highest priorities in assuming my new role here.
Wow. I’m really really happy. Congrats Mike!
I’d love to get some leaks on how the CEO switch happened…..
Yea, a change of stance so soon after the new CEO comes in pretty much says a new CEO was brought in simply after the controversy…Not like it was the cards all along, like some people suggested yesterday..
Yea So much for Shit!!, Double Shit, and Bullshit!!! I knew someone had to get the booth after that nightmare!
What about Anu Shukla now? Is she still part of the company or is she fired?
I am pretty sure she still part because she is the co founder she probably just sits in board of director because of her shares.
It looks like Shukla will not only stick around but will be Garrick’s unofficial boss. I knew something was fishy when she said she was looking forward to working VERY CLOSELY with Garrick.
That’s more of a cry from Anu saying “Hey, I’m still relevant! See? I’m working VERY CLOSELY with him. Hello? Anybody? Recognize me, dammit!”
Oh..I hate remote-controls..
Wow the response were day and night difference dang hopefully this CEO does much better.
It’s called Public Relations 101. That whole post, including but not limited to “Although we believe that the majority of our offers were valid and not misleading in any way,” was textbook crisis control straight out of the Tylenol handbook (look it up). Vaguely acknowledge some mistakes, spit out some legal CYA, and gladhand the industry. Boom, a 20min letter cools the internet’s jets (though I’d hardly call all of this a “firestorm of controversy”).
Conversely, Anu was practicing “Public Relations: Midnight Club Edition.”
LOL.
Pretty much sums it up. Its a well known tactic – admit some of your mistakes (and in the process try to reduce the gravity of your choices) and promise corrections to be made in near future.
Although the comparison Mike makes is a bit unfair (as in the hot water Garrick is currently in is truly due to choices made by his predecessor), you can’t help but doubt the sincerity of Offerpal.
Definitely. PR is huge and cannot be neglected. I guess I feel sorry for him for trying to straight talk about things, but he should have known it’s suicide not to candy coat something like that a bit.
very impressive
Yay! Someone didn’t lie. Let’s throw a parade!
Arrogant and rude Anu gets it! excellent…
FAIL… SAVE?
wow, that was an amazing mea culpa on the part of a company. they obviously think they can manage the shiz storm for a few weeks while changing T&Cs and after xmas, everyone will totally forget about this…
good move.
America loves Mea Culpas!
Cai gi?
You expect people to look that up?
(Please, Mike, get a sub-editor. TC’s spelling and grammar are increasingly “innacurate” (misspelling in today’s item). Or get a spellchecker.)
Amusing how he can dethrone CEOs and throw entire industries into disarray (for the better, in this case), but can’t get his posts spell-checked
Great reporting Michael! You called them out on this one. Looks like the board was paying attention and took swift action. George is a solid industry veteran would should be able to able to clean things up. Anu Shukla demonstrated unbelievable arrogance and dismissiveness to an issue that is extremely important both to the safety of users and the credibility of all of us in the industry. Good luck George!
This comment ascertains your ignorance.
The question really becomes, was Anu’s stepping off from the CEO position planned from before or was it triggered by the ’shit’ related commentary?
Many are saying you don’t make decisions like this in 3 days. Some are saying its because of Michael’s outing.
What’s funny is how people are thinking MA is like Spiderman. This is storytelling at its finest. Create an enemy out of the bad guys and be the lonesome hero. Its a copywriters tactic. Brian Clark used this effectively to launch teachingsells.com after making a common enemy out of google (for those tired of earning revenues online through AdSense). (and by saying this i’m not saying this is an improper tactic – it’s just that people should know what kind of psychology is at play here)
I was telling a colleague of mine that these kind of checks of power are important. There’s a philosopher who wrote about Power Systems and essentially systems need to be placed into checks. Whether MA’s approach was dubious or ludicrous is not the big issue here. The bigger issue is piercing away at a problem that realistically exists.
Notice what Garrick says, “..and have entered this industry in the midst of a recent firestorm of controversy”
hmm? do new CEO’s just enter an industry within 3 days into a company such as Offerpal because the board realizes THEN (when MA calls them out) that BECAUSE of the current CEO’s comments they are NOT GOING TO BE ETHICAL and lead the company to better standards?
Are you seeing what I’m saying? Boards dont just realize a ceo is not going to fix the standards based on her commentary. Nor is an experienced person like Anu going to say comments like ’shit doulble shit bullshit’ if she knew the board would out her for that.
1. Her comments are first of all, not a reflection of her inability to see that standards need to be improved – they are striving for that anyways to a degree but Garrick may prove to be stronger in doing so.
2. Boards don’t change CEO’s based on incidents like this. It’s based on overall standards
3. Boards aren’t stupid enough that they don’t know that scams are prevalent
4. MA is not Spiderman but augmented reality application view could possibly make him seem like one!
Alternative scenario: everybody knew fishy crap was going on and that needed (and was going) to change. With Anu’s reply, it became an issue that nobody would believe that Offerpal was turning with the tide. How can a company be led by a person who was so confident they were doing nothing wrong, then totally change course the next day? Think of it in terms of votes of no-confidence.
I mean, come on, watch the video again. Notice how many of her fellow panelists step up with her. That Hill Ferguson dude just lets her tie that noose up just as pretty as she wants, all the while with that half-smile on his face. Brutal.
And yes, a company can indeed change CEOs that quickly. Not very often, but for a company like this it’s not a huge deal. It’s “saving the goose that lays the golden eggs.” Offerpal’s “overall standards” were brought into stark relief very quickly, and the board stepped up like they’re supposed to do.
@AzamKhan, GREAT comment, very insightful… I’m sure. However, I didn’t read it because it was so long. I just know it was great based on the way your paragraphs were structured and all the sophisticated punctuation and number system in your essay. Good work!
It shows how important it is for one to maintain integrity and at the same time be careful about language and communication into public domain.
cheers,
arvind
You must be horrified with the latest video of Pincus saying :Fxxx posted on TC . Which rock have you been hiding under..
I trust Michael will keep an eye on this company and hold Garrick to his words. That said, I think he’s taking the right approach and hopefully he will indeed follow through and try to move the company in the right direction.
This is rich. Look at one of the last companies this guy ran, Jingle Networks, the 800-Free-411 guys. They are STILL running those $10/mo scams from ringtone and SMS providers.
Great to see the good guys win one! I hope we can drive all of the lying, cheating, double-talking scumbags out of the industry for good. Bye bye Anu – have a nice life.
Wow – that’s bitter
Is it really OfferPal’s responsibility to block offers if its publishers want them? If Offerpal doesn’t offer the mobile offers, and the app publisher wants it and is able to run it via the platform the app runs on, then the app publisher will simply switch to a different app monetization service.
The real culprits are an ineffective regulatory system, the carriers (e.g. Verizon, AT&T, etc) that make money off it, the very large publishers that are willing to look the other way so they can maximize their revenues, and the apps that want the the highest eCPMs they can get.
I’m not saying OfferPal is a saint or an angel — they certainly overplayed their position at the conference — but this issue goes far beyond OfferPal.
The only reason that the platforms and app publishers are singing a different tune today is because Mike Arrington/TechCrunch is calling them out on it.
If I’m reading Garrick’s statement correctly, it looks like the Mobile Messenger-type offers will eventually come back to OfferPal. Expect a few tweaks here and there from the inspection process but ultimately, OfferPal’s platform is only as good as the eCPMs/eCPCs it can deliver. If another platform offers a better monetiziation engine, and the app publisher wants the “scammy” offers, then OfferPal will lose the business to anyone who runs it.
So as mentioned, the real players who can make a difference are the government regulators, the mobile carriers, and the publishers (including both social networks and the apps that run on them).
OfferPal is a really just a symbol of the problem and one of many relatively interchangeable monetization engines for app publishers.
I’ve been saying this all along.
Weak regulations will continue to let this happen. If not Offerpal than another company that can offer high eCPMs will serve offers. Mobile regulars will sit back and exploit the system. Facebook had to do what it can to make money but now it should look to make a good user experience by filtering these out.
Microsoft has been scamming users for years by releasing faulty products and selling fixes and upgrades.
Welcome to Planet Earth.
the important thing is that we figure out who has the most rights to shirk responsibility in a shared network. typically it’s the people with the most money, sure, but it can also be the gatekeepers. throw in the libertarian suppliers who say that nobody forced the offerpal’s to buy their offerings, and you have a nice big tidy ball of not-me.
Yet another MAC/Linux holier-than-thou douche bag I see? Microsoft’s products may suck but their far from “scammy.” Get off your high-horse.
I think you have Microsoft confused with Apple. In the same time frame that MS charged for XP, Vista, and 7, Apple charged for 10.0, 10.2, 10.3, 10.4, 10.5 and 10.6.
It’s hard to imagine the VCs invested in OfferPal didn’t know this was going on all along. You’d think prominent VCs like InterWest Partners, North Bridge Venture Partners and D.E. Shaw would care more about their reputations. I guess not.
Anu Shukla days as the “visible” CEO were always numbered. She should have been smarter than that to launch an expletive containing 6 minute tirade when some subtle diplomacy may have given the story less impact.
Really , do you have some inside information?
Do tell!
What happened to ’shit, double-shit and bull-shit’? Way to go Michael!
Regarding the passage about Krushchev (appeared in the Google Reader but missing here) – this is a Soviet era anecdote about soviet leaders blaming the bast and hoping for the bright communism future.
Congratulations on the whole ScamVille case- great to see a flamboyant blogger kicking bad Web practices.
George in the photo reminds of the CSI tv series star
Board members have to worry about their fiduciary responsibility, which includes managing the company to maximize the value of the company for all shareholders (including themselves). If one of the Board members decided that Anu Shukla’s behavior made her a liability for the future success of OfferPal and lowered the value of their investment, then it wouldn’t take long for that Board member to contact and convince enough other Board members to make the CEO change. Even the notoriously friendly HP Board was able to dismiss Her Worship, La Fiorina, when the full details of HP’s “pretexting”, spying, and surveillance issues were disclosed. From all reports, that change was driven by a single Board member.
Hey Mike,
Next you should look at the scammy companies supplying these offers like tatto. I’m sure there is a lot of dirt there. These ads have been all over the place ESPN, MSN, etc. It would be interesting to know how pervasive these types of offers are and how much money they pump into actually legitimate sites.
the question is how much revenue did these scams generate? our stats don’t show any drop in earnings since they removed the offers. in fact, less than 0.5% of our earnings for the past month were generated by sms-related offers
While a great position to take (and far more professional than Shkula’s absurd diatribe), I wonder how much revenue Offerpal is giving up here. Obviously, you trade lots of short-term revenue for potential long-term win here, but wonder just how much this is going to negatively impact their bottom line.
Board members have to worry about their fiduciary responsibility, which includes managing the company to maximize the value of the company for all shareholders (including themselves). If one of the Board members decided that Anu Shukla’s behavior made her a liability for the future success of OfferPal and lowered the value of their investment, then it wouldn’t take long for that Board member to contact and convince enough other Board members to make the CEO change. Even the notoriously friendly HP Board was able to dismiss Her Worship, La Fiorina, when the full details of HP’s “pretexting”, spying, and surveillance issues were disclosed. From all reports, that change was driven by a single Board member.
companies that stop these practices will no longer generate nearly as much revenue.
Goodbye offerpal .
The point is, whether this is all Shukla’s doing and planned, or she was ‘removed’, it doesn’t matter. Days after the really annoying ’shit’ thing, she’s no longer here. After watching that insanely annoying ’shit’ video I even looked up her email so I could call her a bitch.
Whoa! Amazing turnaround — and where will Anu land?
Is it me or does Garrick’s photo make him look like he a crooked game show host or the obligatory used car salesman? I am assuming he is no less the dirtbag than the previous CEO. With 25 years in the industry, I’m sure he is quite the huge douche bag.
I bet you money she got fired because she said “B*** Sh***” at the conference. Come on if you are freaking CEO and Bus. Professional there is no reason to talk like that at any conference no matter how related you are to the audience.
My 2 cents.
Way to go Mike! I disagreed (and still disagree) with you on regard to the Flickr Obama joker removal, but am with you 100% on your scamville series here and am so glad that you’re comments are bearing fruit!
It’s all happened so fast. Congrats!
Crazy to see how much influence this blog as. But great stuff!
Hats off to you, Michael! Fantastic journalistic piece of investigation with strong impact in the community. Keep up the great work.
Garrick used to run a company that does $10/month ringtone scams. This industry needs to be regulated.
Lesson? You don’t F with Mike Arrington.