Firm Wants to Pad Your Paycheck--With Advertising
First, it was advertising above urinals. Then ads on the top of bar and restaurant tables, grocery check-out dividers, cup holders in sports arenas, e-mail spam, and now advertising on the very slip of paper that says you have money--your paycheck.
Yes, advertisers have finally discovered the paycheck. If not quite with ads on the checks themselves, nearly so with deals on cell phone service, online flower delivery and Earthlink hookups gracing the backs of paycheck stubs.
Intrusive, say some, but Larry Wolf and Todd White of AdChek, a fledgling Ventura company that sells ads on paychecks, say it’s no different than junk mail or stickers on fruit.
The ads save employers on the cost of printing paychecks, offer employees information, and besides, nobody has to read them.
But White, 32, and Wolf, 34, hope they’ve found the sweet spot that everyone will read. If so, they see an endless market: big companies, mom-and-pop operations, overseas, even government (the U.S. Postal Service is considering the idea for its 800,000 employees).
For now, AdChek occupies a small office on Sperry Avenue with White, Wolf, two sales representatives and a part-time receptionist, and to keep the system cost-effective, they are only selling to big companies with big payrolls.
The pair, longtime friends, often talked of going into business together before they founded the company a year ago. Wolf was advertising director at Gospel Light Communications in Ventura for five years, and White was a payroll processor for Employers Depot for seven years.
One day, after pondering ideas such as scented business cards and carwashes inside grocery stores, they considered their own career backgrounds and realized: Ads, paychecks, ads on paychecks. You can’t get any closer than printing on money, Wolf said. Surely, someone had thought of this already.
But a patent search showed they had apparently gotten there first, and after running their idea past several advisors, they created AdChek.
The company pays an employer’s check-printing costs, which can run as high as 8 cents per check. AdChek makes its money by selling to advertisers, who pay 2 cents to 8 cents per check, depending on the size of the ad.
Up to four ads can fit onto the back of a check.
Advertisers can choose which employers’ checks to advertise on, and employers retain the right to nix any ad idea before it goes to press. No ads for tobacco, firearms or anything of questionable taste are allowed.
“The last thing we want to do is create cheesy advertising,” Wolf said.
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The idea isn’t for every company, he says, but so far three employers and four advertisers have signed on, for about 14 million paychecks to roll out this year.
It’s a pleasant surprise for two entrepreneurs who braced themselves for boos and hisses.
“I pictured Larry’s and my face on a magazine with the words, ‘Now look where they want to put ads,’ ” said White. “The guys you want to hate.”
But few dissenters materialized.
At a trade show of the American Payroll Assn. in Florida last year, they spoke to representatives of several hundred companies.
Most liked the idea, White said.
That could be because employers, such as Walnut Creek-based Westaff, a temp agency for clerical, light industrial and technical jobs, see the ads as a benefit.
“We can offer something to our employees in the way of discounted offers,” said Mike Ehresman, senior vice president and treasurer of Westaff.
That option, and a break in printing costs, appealed to Westaff, Ehresman said.
Actually, he added, the company considered doing the same thing a few years ago but couldn’t print enough checks to attract the quality of advertisers they wanted.
AdChek, however, pools clients and has the advantage of economies of scale, thus drawing Earthlink and AT&T; Wireless, the type of advertisers that Ehresman sought.
Westaff prints about 50,000 checks a week, issued from field offices across the country. Each office has several types of blank checks to choose from, including AdChek’s.
It just rolled out its first batch of AdChek stock last week, and actual use is still several weeks away, Ehresman said, but so far employees who have seen them have not objected.
Still, public acceptance might be iffy, said Cheryl Idell, executive vice president of Initiative Media, a company that helps advertisers evaluate advertising media.
Ads on paychecks, especially if the recipient must show the stub to get some discount, could be considered an invasion of privacy.
“It feels very, very personal,” Idell said. “It’s the whole financial information issue. People’s health and financial information is the most private information.”
Wolf said to ensure privacy, AdChek advertisers use codes for discount offers, which can be read over the telephone or sent via e-mail.
In fact, other than AT&T; Wireless, all of AdChek’s advertisers are e-companies: Earthlink, Proflowers.com, Emazing.com and Eflowers.com, a trend Wolf attributes to dot-com companies’ openness to new forms of advertising, rather than privacy issues.
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On the other hand, consumers might be so accustomed to ads everywhere that a pitch on a paycheck doesn’t faze them.
Jack Feuer, media editor of AdWeek Magazine, said Americans are sophisticated consumers, can’t be brainwashed, and if they don’t like a particular form of advertising, it won’t survive.
And the last thing advertisers want to do, he added, is annoy people.
So advertisers go over any new media with a fine-toothed comb, said Warren Schaffer, media director of TBWA/Chiat/Day Advertising in Los Angeles. They want to know the best way to reach potential customers, if it’s cost-effective, if customers would be turned off by it, and the odds of their even looking at it.
“I don’t look at the back of my paycheck stub,” he said. “How do I have any idea if other people know if there’s anything on the back of their paycheck stub?”
That’s why Earthlink, an Internet service provider, is doing a test run with AdChek. Jamelle Boucher, senior manager of business development for Earthlink, said it seems an obvious place for an ad since most everyone gets a paycheck.
“It’s a very good way to get someone to see what I want them to see,” Boucher said. “When you think of newspapers and radio and commercials and you think of a pay stub, which one is going to reach more people?”
With 14 million checks scheduled to be printed this year for three companies, Wolf estimates AdChek’s value at $5 million, but he and White are looking for $3 million to $5 million from a few benevolent investors to help AdChek open sales offices in major cities and reach 120 million checks.
They would like to go public within the next two years and hope to use the money to expand overseas.
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