As an idea, multi-level marketing is a smart one. You pay a person a very small amount of money to advertise your goods to their contacts. To make it more attractive you also pay the person that referred you that person and so on until you spent a certain percentage of your profit. For a company this means a pretty robust and targeted marketing campaign with a low initial investment. This would acutally be pretty interesting if the model didn't hinge on tricking the potential customer/employee. Indeed, the potential revenues are greatly exaggerated while the pitfalls are downplayed. It is even advertised as having your own business and while the law may consider you self-employed, the structure of an MLM is such that you have a boss, coworkers, etc.
Because of this bad representation, being too closely associated with MLMs can be damaging for brands. In the long term, the brand, rather than the current sale, is the real value. This is why most regular marketing campaigns not only advertise products but really focus on pushing the brand's image into the potential customer's subconscious. In the long term, this brand association will mean a much bigger sales network than what you can get with direct or multi-level marketing alone.
It is not to say that MLM is doomed to failure. There are several examples of companies succeeding but the MLM must always backed by a solid and wider marketing plan and a tight control of what the independant MLMers are doing.
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