A New Formula
"I was surprised to see how much adult content figures into that experience," he said. "They give people DVDs with lap dances and things like that. I saw that on one side, I had associates who ran affiliate programs and always were looking for new traffic sources, and on the other side, this untapped, virgin territory of consumers of adult material. It was just a matter of building a bridge, and the optimal arrangement was a website that I controlled, which also served as a directory of businesses and a place where customers can visit to make purchases. It would also be a means to giving retail stores a presence online, so customers can find their businesses."
The result of this inspiration is Pornacre.com, a conventional affiliate site that's covered with banners and galleries but which is part of a very original twist in the online retail business.
Mardack has gone back to distributing physical DVDs to the retailers — free of charge — in a new business model that benefits the stores, their customers, the sponsors and Pornacre.
"I began to get promotional DVDs from people who I knew that ran sponsor programs," Mardack said. "I just asked for some of the stuff they had sitting around, gathering dust. It was a natural fit for them, because I gave them customers that they would not have had otherwise in the physical realm. This allowed them to circumvent the normal difficulties of distribution.
"Usually, you have to convince individual store-owners to give you shelf space for your DVDs, whereas I walk in the door and say to the retailers, 'Here, this is all free.' So now those DVDs are going home with the consumer, right along with the most popular titles. The customer is happy, the store owner is happy and the sponsor is happy."
The new scheme is so beneficial to all involved, Mardack is amazed that no one had thought of it sooner. He believes the key lies in the physical content, the DVDs, and how that propagates into untapped marketplaces.
"It worked," he said. "I take it upon myself as the affiliate to put the content into a form that benefits the sponsor program. That means dressing up some DVDs that I get for free from the sponsors in my own branding, and putting them out in the places where customers are likely to be found — adult video stores, head shops, massage parlors and strip clubs — places where age verification is already going on.
"Most of adult is very friendly in the online realm, because there's rich measurement and precise return on investment, but there was a big gap of opportunity," Mardack said. "There was no effort to touch the customer, other than at the point of sale on the computer. So the result is a vast area of neglect in marketing. I thought, since I'm able to function fundamentally as an affiliate and offer sponsors access to the kind of marketing that they're not taking advantage of — which gives them access to a customer who is extremely qualified — I can give a qualitative difference in the kinds of advertising, and a quantitative increment in being able to reach traffic of a different but very desirable sort. That was the genesis of the idea."
Mardack took his first stab at the scheme through Steve Lightspeed, who had produced a lot of demo reel giveaways. After hearing Mardack's proposal, Lightspeed put a couple of thousand pieces in his hands, which he in turn placed in a wide variety of adult businesses. Of course, Mardack didn't mention that he wasn't absolutely sure it would work in the beginning.
"I had doubts whether the costs were going to be covered," he said. "I made investments up front to secure routes of distribution, and had people working for me at different locations in the U.S. I'd walk into video stores and make the pitch, and the reception was universally great. All they had to do was put a sticker on their window with my branding on it, and agree to receive a weekly or monthly box of DVDs they'd be free to distribute, but not sell, to their customers as they saw fit."
In the beginning, Mardack admits that the product wasn't very good, since it consisted mainly of trailers with no full scenes. So he went back to the sponsors and convinced them to give him full scenes, trusting that the risk of piracy would be low due to the nature of the customers who would be receiving it. Now that system has morphed into something more streamlined, in which Mardack makes his own DVD duplications from masters he receives from the sponsors.
"In the beginning, I was dealing with thousands of pieces that had been sitting in office closets," he said. "They were just being used to hand out to webmasters at trade shows, and they never got to the customer. But now I see that it's more cost-effective for me to take the content in some unfinished form, and to actually produce the DVDs myself. This way I can have them produced closer to the ultimate destination, so there's no reason to ship DVDs from San Francisco, where I live, to New York. I just ship a master and have them reproduced there and distributed to stores locally."
Mardack claims the feedback he's been getting from store-owners, sponsors and even customers has been glowing.
"The store-owners are excited because now they see that this revitalizes adult retail as an advertising channel, and that money is likely to flow," he said. "They're seeing that this does heal the separation that took place between the online adult business and the offline adult. And the sponsors are happy because their content gets a new lease on life, and their brand goes places it never went before. They're sourcing customers from realms that they never thought they could touch for free."
And what's in all this for Jack Mardack and Pornacre?
"I'm happy," he said. "I'm branding the site, and I'm making money as an affiliate. And I've got a cool idea to boast about in XBIZ."