social advertising Archive

Last week NY-based recommendations service Outbrain raised $12 million with a total of $18 million in total venture capital funding. Today Outbrain is announcing the launch of their revenue model which they are calling, "Sponsored But Good".

Here’s the idea – by now you’ve probably seen the Outbrain ratings and recommendations widget on sites across the Web. Going forward if the publisher enters into the program, whenever possible, a maximum of one of the recommendations will be a sponsored recommendation. Outbrain assures me that the sponsored recommendation will be closely related to the content being discussed in the blog post. The interesting thing about this program is that the links will never point to a product page; instead they will point to another blog post discussing the topic. So Apple might buy the iPhone topic and point the traffic to a blog post about the iPhone, etc.

Here’s an example of what the recommendations box will look like:

The content site and Outbrain will share in the generated revenue from the click. Outbrain says that if you decide not to signup for their program, any monies earned through your blog will be stored in an account and donated to charity at the end of the year. This is the first time I’ve seen any advertising company do this.

I like the concept of the Sponsored But Good program but after buying millions of dollars in media year-over-year, here are my concerns with the program:

• Enough supply – are there enough blogs in their network and enough blogs that will activate the feature to give Outbrain enough inventory to sell?
• Deep sales force? Since this concept is new, it will take a lot of convincing to get brand marketers to sign off on the ad dollars. They will need to overcome the objection of "why should I spend money to push traffic to another blog post and not my brand site?" Also, they will need to sell enough ads to have at least a decent fill rate initially
• How many clicks will it take for a blog (even a massive one) to make enough money to make the program attractive?

If Outbrain is able to convince brands to try out this new model, they could do very well with the program. It will just take a lot of sales and convincing to get the buy-in for this new online advertising form.

Note – Outbrain asked me for my feedback on their model a couple of times over the past few months. I was never paid – just reviewed what they had and provided my feedback. Most of what I told them are the same things I wrote above.

We first reported on Eyealike a year ago when they launched their "dating service based on looks only" application. The idea was simple: upload a photo of a hottie and Eyealike will find other hotties on the dating service that match the "features" of the hottie you uploaded.

Today Eyealike is announcing the launch of Eyealike VisualAd which aims to help social networks and other content sites generate more revenue based on matching images on the page to ads that will result in better results than standard display ads. The company claims that using VisualAd you could see up to 15 times higher earnings.

If we think about Google AdWords which uses contextual matching to provide ads that match the text on the page, VisualAd wants to do the same thing using the images on the page. With text there’s no worry about error in processing, we will need to see just how close Eyealike can match ads to images that are processed by a machine.

Eyealike VisualAd is a plug-in technology and pricing varies based on size and selected features. I could see Keibi offering a similar product in the future.

Yesterday I received a survey from one of the services that provides paid content. I thought it would be interesting to share the questions and my responses. I would love to hear your thoughts as well. My general take has not changed – I am all in favor of advertorials but not in favor of paid reviews. Advertorials would be full "posts" that a company purchases similar to full page ads in newspapers. Labeled correctly, advertorials could be a huge winner for blogs. As I do with all advertising on any of my sites, the ads would need to meet my standards before accepting. The comments below only relate to advertorials not paid/sponsored reviews.

Intro from email sender: I am trying to best understand what is most important to bloggers like you. I would greatly appreciate it if you could take the time to answer a few questions.

1. At what price point is making a sponsored post interesting to you? $100/post? $500/post? $2000/post? More?

Allen: In general terms, the price for an advertorial should depend on the site’s real audience (not the fake rss numbers, etc.), the site’s reach and what media the advertorial includes (i.e. video/audio). The other consideration to look at is how long the advertorial will run. Pricing should also be in line with the monthly sponsorship pricing. Each advertorial should be priced accordingly.

2. If you have no interest in including sponsored content on your blog at any price why?

As I stated above, advertorials would be ok in moderation. For a large blog, running one or two a week would be acceptable. I wouldn’t run sponsored reviews for any price.

3. If you were to include sponsored content on your blog would you rather write a review yourself or simply place an advertorial?

Answered above. Sponsored reviews are not healthy for the overall market. There will always be the question lingering as to why the review was positive. We are starting to see some interesting business going on with video bloggers and decisions they are making around sponsorship and what amounts to paid reviews. This type of business needs to be corraled before it gets out of control and puts a hurt on the overall blossoming video industry.

4. In addition to full in-post disclosure what other conditions would you have for accepting a sponsored content?

To properly handle advertorials, naturally in-post disclosure is required. In addition, I’d like to see an "advertorial standard" created – similar to the IAB ad format standards. This will allow search engines and other aggregators to properly handle this type of sponsored content. Whether it’s some type of microformat or a specific "rel" tag or some other technical means to handle, it’s critical that this is setup correctly from the beginning. If it’s not handled correctly from the beginning, it will not work over the long-term.

With that said, there are a variety of other concepts and ideas I have for ways to monetize blogs. I will begin to share them over the next couple of weeks. It’s time for the CPM ad to rest in peace.

Back in April, AdBrite launched their Open Targeting Exchange. Today AdBrite is announcing the launch of a behavioral targeting product within their ad network. They note that their behavioral network is five times larger than any of their competitors. From the announcement, "Leveraging technology from AdBrite’s Open Targeting Exchange (OTEx), AdBrite’s new Behavioral Targeting service allows advertisers to show ads to users with interest and/or purchase intent in 14 major categories and over 3,000 sub-categories."

Pricing is set via a real-time auction. The new behavioral product is only available to a select group of advertisers on an invitation-only basis. Computers and Internet are not initial launch categories. Instead they have (smartly) selected more monetizable categories including: Automotive, Business & Finance, Careers, Consumer Electronics, Dating & Singles, Health, Music, and Travel.

It’s good to see AdBrite testing out new advertising options. By pushing forward, it can help them draw in additional advertisers to the AdBrite system as a whole.

My issue with AdBrite since their initial launch was the lack of advertisers. Having a million publishers is great but if there are no advertisers to fill the ads, it means nothing. AdBrite noted that they have 70,000 active publishers, up from 50,000 at the beginning of 2008. I’d prefer to see fill rate and total number of advertisers (not including ebaumsworld).

Veoh launched their behavioral targeted ad network last week. And ValueClick is expected to announce their behavioral ad product today as well. Here’s a very short video from eMarketer on behavioral targeting:

PubMatic is out with their monthly AdPrice Index report for June 2008 and their analysis shows that prices remain stagnant and show little movement from the previous month. Web sites with less than 1 million pageviews dropped 32 cents/cpm while medium and large sites (those over 1 million views) saw a small increase leading to the overall flat movement.

PubMatic also reported that the news category was basically cut by 50% in cpm ad rates. What I am seeing on my Web sites is that CPMs are down 20% month over month on remnant (default) networks. Here are the key metrics direct from the AdPrice Index:

• On average, Web site monetization decreased by less than one percent from $0.37 in May to $.036 in June. *(Pricing data reflects net publisher monetization via ad networks and excludes ad networks’ share of ad spends as well as inventory sold directly by publishers to ad agencies or advertisers).
• By size, small size Web sites had the largest drop to $0.81 in June, down from $1.13 in May.
• By vertical, News and Gaming had significant drops, sliding $0.62 and $0.20, respectively.
• Entertainment showed the only increase jumping $0.11 from $0.29 in May to $0.40 in June.

If the trend continues that rates for smaller publishers continues to drop significantly, will these smaller publishers be forced out of business?

As always, note that the AdPrice Index only measures data from publishers using PubMatic for ad serving.

NY-based KickApps is announcing a new distribution partnership with widget network Clearspring today. Clearspring will begin to promote the KickApps Widget Studio and KickApps will push its members to use the suite of widget tools that Clearspring provides.

KickApps reports over 24,000 publishers on their network using widgets and comScore reports 47.5 million unique widget viewers in April 2008 on the Clearspring network. This deal benefits KickApps by extending distribution to the large member base on the Clearspring network.

Widgets are finally starting to take shape as a real online marketing vehicle. Over half of the sessions at Graphing Social Patterns this week are focused around widgets. Check out KickApps CEO Alex Blum’s article on the value of widgets.

Editor’s note: KickApps is a sponsor on our sister site, HTMLCenter.

Over the past few weeks, Regis’ sidekick Kelly Ripa has appeared in a variety of television commercials for products including Tide laundry detergent and Electrolux appliances. What does Kelly Ripa know about a dishwasher or an oven? Do you believe her when she says it’s a better appliance? Would she endorse Whirlpool or GE if they paid her more? I’d suggest the answer is yes. This is just one example of celebrities endorsing products for big dollars when their endorsement really means nothing as to the quality, features or durability of the product.

Last night, we wrote about Meebo and their new marketing program. Part of the marketing program is to push users to share and spread links from companies and their brands. The idea of people on a social network sharing advertising that appeals to them is an idea that I can see growing very quickly if implemented correctly.

We all know what happened with Facebook’s Beacon program last year. I think Beacon was on the right track but unfortunately they went about it incorrectly. Here’s what I’d like to see: a friend endorsement system and the creation of a new advertising category named, “social advertising”. Here are the basics on how the program would work. You enter the products you’d be willing to endorse to your friends into the system. Your friends do the same. When you are ready to purchase an item, you check the friend endorsement system and review your friend’s product endorsements in the category you are interested in purchasing within. To combat any fraud with the reviews, I’d suggest using a model similar to Reevoo where only products actually purchased can be reviewed and endorsed. While this might sound very much like a typical reviews site, the idea is that a new social layer will be applied on top of the reviews and, in addition, the ability to endorse a product is new as well.

The system would be tied into Facebook, MySpace, etc. and could be expanded to allow friends to swap and/or buy/sell from each other in a private network. The system would absolutely be more robust in its feature set, I am just simplifying it for the sake of discussion.

The bottom line is that, outside of the teenage market, I can see friend endorsements taking the lead over celebrity endorsements. Wouldn’t you rather have your best friend tell you why the Electrolux appliances are right for you than Kelly Ripa?

For reference, here’s Kelly Ripa shilling the suite of Electrolux appliances: