Yet another company has entered the educational market with the promise of free computer equipment in exchange for displaying banner ads to schoolchildren. Similar ad-based models from other education companies have failed more often than they have succeeded, but leaders of the current program contend they have the formula for success.

Internet Education Concepts, Inc., (IEC) an educational start-up in Point Breeze, Pa., offers schools what looks like a sweet deal: free “Discovery Stations,” complete with a hard drive, monitor, keyboard, mouse, LCD projector, Windows ’98, mobile computer cart, Ethernet card to connect to the web, educational links, and free installation and training.

The company says it currently has 500 participating high schools in Atlanta, Baltimore, Boston, Chicago, Cincinnati, Cleveland, Columbus, Dallas, Denver, Detroit, Houston, Indianapolis, Los Angeles, Miami, Minneapolis, New York, Philadelphia, Phoenix, Pittsburgh, Portland, San Diego, San Francisco, Seattle, St. Louis, Tampa, and Washington D.C.

Company officials said they expect to have 1,000 high schools signed up by fall and to be in the black in the next 12 months.

So what’s in it for IEC?

According to the company, banner ads from IEC sponsors are continuously displayed and projected for the entire class to view.

That’s not a trade-off everyone is comfortable with. According to Gary Ruskin, director of the Washington, D.C.-based advocacy group Commercial Alert, companies using ad-based models in schools—such as IEC and the now-defunct ZapMe! Corp.—are inappropriate for schools.

Commercial Alert, a group supported by former presidential candidate Ralph Nader, maintains that companies that give free technology to school in exchange for advertising to children should be outlawed.

Commercial Alert recently released a statement lambasting IEC for its ad-based revenue stream and for collecting and selling student data. Commercial Alert also claimed at least partial responsibility for striking the deathblow to ZapMe! Corp. in November 2000.

Mixed precedents

According to the Commercial Alert release, “Commercial Alert, Obligation Inc., and Junkbusters [two other anti-commercialism groups] ran a campaign that helped lead to the demise of the ZapMe! Corp., a similar company that advertised and gathered market research from schoolchildren.”

“Similar public outrage forced another company—[the internet-filtering firm] N2H2 Inc.—to announce that it would stop gathering market research from schoolchildren,” the anti-commercialism advocates said.

IEC’s president, Steve Gongaware, told eSchool News that IEC has never sold student information, despite the allegation in the recent release from Commercial Alert.

“We had a development project going with another service, and we stopped that over a year ago,” he said, citing “technical reasons” for not enacting the data collection. “Unfortunately, we neglected to delete it from our web site.”

Still, opponents of school advertising—and even some officials of companies that have tried it—have said the ad-based business model is destined to fail.

“Internet advertising is a very new concept, and it has not been proven,” Jim O’Halloran, N2H2’s former director of product marketing told eSchool News. So far, companies have not found it to be effective.

In January, N2H2 abandoned its ad-based Bess Partners Program, which offered free filtering to schools that agreed to present banner ads to students. Advertisers simply failed to give the program sufficient support, the company explained.

O’Halloran said the company’s intention with the Bess Partners Program was “to allow responsible corporate sponsors to subsidize the service for schools.”

“What we have discovered is that the ‘blue-chip’ sponsors we had targeted to help with this [initiative] did not come forward,” he said, adding, “Any observer of the internet industry can see that the internet world is having to reckon with online advertising problems. That model does not seem viable.”

Ted Maddock, technology director at El Diablo High School in Concord, Calif., was sorry to lose the free computer lab provided to his school by ZapMe!. He agreed the ad-based business model might have been to blame.

“I don’t think the business model was as viable as they thought,” he said, referring to N2H2 officials. “It is part of the shakeout in the whole dot-com industry.”

IEC’s Gongaware disagrees. The ad-based model is not inherently flawed, he asserted.

“If that’s the case, then why is ChannelOne [a company that supplies cable to schools in exchange for daily televised advertisements] a profitable business to the tune of $100 million per year?” he asked rhetorically.

Gongaware insists the problem was due to other business mistakes made by the companies.

“If [Commercial Alert is] under the false impression that they killed ZapMe!, then they are mistaken. [ZapMe!] failed because of a number of ways they ran their business wrong,” he said. “ZapMe! [leaders] did not want to say that they were stupid and that’s why they failed. Of course they are going to blame it on the organization that went after them.”

And as for N2H2, Gongaware said, “The whole concept for them was silly—why would you give filtering software for free?”

Regardless, those opposed to advertising in schools see trouble ahead for IEC. “I think what will happen to them is what happened to ZapMe!—once the press gets a hold of this, the public will expel them from schools,” said Commercial Alert’s Ruskin.

Legislative action

Even though he contends such endeavors are destined to fail, he says companies keep trying it because they believe substantial profits can be made by marketing to a captive audience of schoolchildren.

Said Ruskin, “[Companies] continue [to try it,] because, increasingly, corporations see kids as an economic resource to be exploited just like timber or iron ore. They think taking money from kids is like taking candy from a baby.

“This just speaks to how desperate companies are to market to children. It’s like flies to fly paper. They lust after the money that is in children’s pockets, and they’ll continue to be drawn to it until we pass legislation that makes this marketing illegal in schools,” Ruskin declared.

Ruskin’s view is not without supporters on Capitol Hill. On June 14, the U.S. Senate unanimously approved the “Student Privacy Protection Act,” sponsored by Senators Richard Shelby, R.-Ala., and Christopher Dodd, D.-Conn. This bill would require parental consent before a company could extract market research from a child in school. A version of this bill previously was approved in the House, and the measure currently is pending before a House-Senate conference committee.

Gongaware and proponents of local control object. It’s not up to Washington lawmakers to tell local educators how to run their schools, they contend.

“Schools are obviously aware of what they are agreeing to, and they feel that since schools are funded locally, they have the right to decide locally what they are going to do,” the IEC president said. “That is the school board’s responsibility, to weigh the pros and cons and make [its] decisions accordingly.”

In letters to Commercial Alert, several educators using the Discovery Stations defended IEC.

“The fact of the matter is that what Discovery Station has to offer our school in return for what they want from us clearly gives the school an exceptional benefit,” said Mike Craig, a science teacher at Johnstown-Monroe High School, in Johnstown, Ohio.

“When tax levies for schools are regularly defeated, the reality is that we need resources to educate our children better. If someone really wants to eliminate corporate sponsorship in schools, he or she needs to campaign for superior funding for schools so that schools will not need the money,” said Barry S. Riehle, an educator at Turpin High School, in Cincinnati. “That will truly defeat corporate sponsorship.”

So far, Gongaware said, IEC has not received a single complaint from any of its participating schools.


Internet Education Concepts, Inc.

Commercial Alert