Friday, April 8, 2011

Start-Up Watch COD: AdExcite creates valuable video inventory with “new standard” ad units

The history of the banner ad market provides a classic example of the relationship between supply, demand, and pricing.

Most pubs were launched with the expectation that ad revenue could more than cover their operating costs. During the last dozen years, literally millions of sites have launched with this presumption. This led to loads of new banner ad inventory. The growth in the supply of banner ads outstripped the growth in demand, so prices fell.

In order to make up for the revenue shortfall, pubs added more units per page, which meant that supply growth accelerated, outpacing demand even more substantially. Additionally, the number of competing messages on pages reduced ad noticing value and effectiveness. Prices had nowhere to go but down still further.

And where have we ended up? Rock bottom pricing for ads on cluttered pages - ads that largely don’t work very well. Pubs lose. Consumers lose. Brands lose.

A company called AdExcite is out to change the paradigm by creating a set of broad reach ad units that offer great brand impact, pleasant consumer experience, and green for the pubs. This LA- and Austin-based start-up wants to improve the ad environment by creating “new standard” units at real scale. And they do all this through a technology platform that lets quality sites participate WITHOUT reengineering themselves.

The first offering is an over the page video plus companion ad that acts as a pre/interstitial.

Brands get more high quality video inventory to buy – with high quality editorial “surround.” Consumers get a video instead of six more blinky blinky click now banners on every content page. And pubs get to capitalize on the higher CPMs for video – even if they don’t offer (or offer much) video in embedded players on their pages.

Currently they are delivering 30-40 million plays a month. Certainly the appeal of these units is getting noticed. AdExcite reports broad video ad network acceptance of these units. Plus they are selling direct through Q1 Media.

AdExcite plans to deliver more than just these over-the-page-video plus companion banner units. They are also launching some other high impact ad experiences that any publisher can easily offer on their pages. These include:

•A “slider unit” that delivers a video or rich media unit in a slide-out format
•A ”mouse-over unit” that delivers video or rich media
Using their technology platform and units, AdExcite believes that pubs can get out of the “race to the bottom” -- a marathon that starts with short term revenue needs and ends with 18 blinking banners on a page at a nickel CPM.

An admirable and potentially lucrative goal. How often is it plausible that a lose lose lose can be turned into a win win win? Said Cofounder Phil Banfield, “The pubs that are signing on with us get it – their editorial content is valuable. They know they should be earning more for it and that their audience will understand the value trade-off, because our ads are presented in an attractive, acceptable and effective format.”

They are also working on a full publisher solution the enable sites to manage AdExcite and other third party ad providers from a single platform. Additionally, they plan to offer “new standard” ads in social media and mobile apps.

Thanks to ad:tech for running this first.

9 Questions for Allen Stern – MD, Signal to Noise

1. For those that don’t know you, can you tell us a little bit about your background and what you do?
I am the Media Director at Signal to Noise. We are an integrated agency with deep roots in digital. I’m responsible for leading the media team as we invest our client’s media budgets to hit their objectives. Right now, we're working very closely with eBay and NikeStore on their digital initiatives.

2. Sellers consider you, to quote one, “a tough cookie.” What does a company have to do to impress you?
My kids may read this someday, so thank you for paraphrasing what was probably a saltier comment. I’m only “tough” on two occasions. First, when a company cannot clearly define what it is that makes them different? If it is a technology play, then they need to be able to articulate how the technology will work and why it’s a benefit to our clients. If it’s a similar product to what is out there already, that’s fine. Is there a pricing advantage? Is there an inventory advantage? Is it the service? There has to be at least one thing you stand for. What is it that makes your company different?

The second reason I get “tough” is when a company fabricates a detail. I have no tolerance for that. If you don’t know, be honest about it. We can wait for you to get back to us. But if you put something in front of me that does not sound right, and I can check it, I will call you on it. The problem is agencies are under immense pressure and we do not get as much time as we would like to review all the new opportunities out there. So I feel that if I’ve allocated some of that scarce time to a company, they should be respectful. They should come prepared and they should be honest. You kind of get one shot, and if you are not honest, I cannot work with you.

Because so many of the pitches we hear now are technology based; I think it is incumbent on vendors to train their sales people to speak from both a strategic and a technology perspective. I recognize that is a challenge, but we need to understand the product on both of those levels.

3. You started in offline. How do you think that has helped shape your perspective on the industry?
This is my 20th year in media. I was fortunate that I got to spend ten of those years at Y&R & OMD working mostly on Consumer Packaged Goods. Those are great clients to begin a media career because you learn the nuts and bolts of media planning. It was there that it dawned on me that I was not just creating a media plan, but I was selling a media plan. That allowed me to put myself in the client’s shoes and think through what proof points are going to be needed to get this approved. How well does it cover on the objectives of the plan: target; geography; schedule; reach versus frequency? I thought about every plan as if it was my money and was trained to put a critical eye on that plan.

That experience has carried over into my perspective on this industry. The emergence of new formats has been amazing. But at the end of the day I look at them all and try to boil them down to see if they hit the client’s objectives. We are open to new ideas, but being new is not enough. They have to make strategic sense.

4. Do you think consumers have different expectations about ad intrusiveness now than they did before digital? Has the advertising “social compact” between advertisers and consumers changed?
Before digital, consumer annoyance was about too much advertising. There were too many ads crammed into television and radio ad pods. Magazines were “all ads” and cities looked awful from all the bad out-of-home advertising. We learned, though, that as consumers, we were willing to trade advertising for content – just take it easy on us.

In the early days of digital – only eight-to-ten years ago – we ran a lot more intrusive digital ads than we do now. We ran pop-overs. We ran pop-unders. We had monkeys. We had an overlay of a car driving across your favorite homepage every other day. Those tactics clearly did not help this industry and we all carry a lot of baggage around for that period. But consumers were vocal and publishers responded by setting limits on that intrusiveness.

I think consumers are still willing to make that tradeoff. However now, with digital, and specifically retargeting, consumers are reminded that they have given up some level of privacy when they visit a site and then see banners for that same site on every page refresh for the next few days. The technology has become so efficient that we really need to police ourselves with frequency controls or we will wear out our welcome again.

Personally, it feels much creepier to me when I receive 20 solicitations with my exact mortgage amount in my mailbox at home.

5. As you look out on the world of emerging platforms, what is most intriguing to you?
I bought my wife an iPad for her birthday last September. When I watched her and the kids use it, I knew it was a real game changer. Since that time, it has really become an amazing resource around our house. The combination of a tablet with an application like Flipboard is really a window into where consumers could live in the near future. Media planners have to pay attention to where consumers are spending their time. We’re living in a time where there is tremendous convergence between creativity, technology and media. I think it’s a fantastic challenge to get our brands’ messages integrated into these platforms and technologies, not annoy consumers and continue to meet our clients’ objectives.

6. How are you responding to the challenge of consumer privacy that is facing the industry?
Consumer Privacy is an area of great concern for all of us. We are fortunate that our clients have embraced this as well and are taking the right steps to be as compliant with best practices. So in addition to encouraging our clients to make sure their privacy policies are up to date, we are actively getting them on board with one of the certified Ad Choice programs. We can’t wait around on this one.

7. In the years since you started in the business, what have we gained, and what have we lost as an industry?
I think that as the industry has become more fragmented we have lost a lot of the personal relationships that helped get business done. It’s really hard to get to know everybody that you have to at a level that really develops trust. This business was built on relationships between vendors and agencies and that is much harder now.
We have gained an amazing level of accountability since I started. That includes traditional as well as digital. Classic traditional media brand advertisers are evaluating their broadcast and print investments for some level of return against an objective and making more informed decisions. For digital media we always had that approach and it actually ended up hurting us to some extent. We are just now rebounding from the big hole the industry dug by focusing on click through rates. I’m glad that calmer heads can now see the amazing value beyond the click.

8. Which are better, Dunkin’ Donuts or Krispy Kremes? Why?
I am a friend to all baked goods. But forced to make a decision, I have to go Dunkin’. I guess I’m kind of old school and besides, Krispy Kremes are just a little too sweet to eat that second one.

9. How about a sentence of sage wisdom to close this out?
I have no particular sage wisdom, but I’m a big fan of borrowing. One client gave us these directions; “Make better mistakes.” It embraces a mentality of always trying to improve. Yet at the same time it gives license to explore possibilities. Of course that comes with a price. We need to vet the opportunities thoroughly as well as be prepared to make quick decisions on success. I guess that helps rationalize the perception of being a “tough cookie.”

Or sage is an herb that should be used sparingly.

Start-Up Watch COD: Solve Media helps consumers “pay” with attention instead of cash

Publishers need to get more money for the content that they produce. A good deal more. While the concept of an entirely ad supported content ecosystem was and is appealing, it is also unrealistic. We see it in the number of newspapers that have folded in the US, despite seeing significant gains in online traffic. The problem is that it takes a jillion banner ad views to make up for every full page ad lost.

And yet research shows over and over and over that many consumers are as yet unwilling to pay for content online. And on some level, why should this be surprising? With literally millions of websites delivering content, people have a knack for finding info in new places when their go-to locations start charging.

The most shocking factoid on this front came when New York Newsday announced that – three months after they put up a pay wall around their content (!) -- they had only 35 subscribers. For those who don’t know, Newsday is a giant newspaper in the NY area, primarily serving Long Island. Everyone expected a significant drop in page views after the wall went up. But only 35 subscribers? That’s selling one sub about every three days.

So clearly, if content is to flourish in the months and years ahead, pubs need new ways to monetize their stories. Solve Media, a start-up I’ve written about before, has such a model. They help pubs deploy something they call “Type-Ins” both as a replacement for Captchas on forms, and as an access method for content.

The Captcha replacement is best illustrated with a picture, so that’s just what I’m gonna do.

Pretty clear, huh? Instead of trying to decipher often illegible Captchas, the consumer is asked to look at a special ad unit (gif, flash, and now even video) and type in the brand message. Generally it’s easier to figure out what to type with one of these units – they are particularly better with weak vision. Proprietary Solve Media technology makes them just as secure from a bot-reading-them perspective as a tough Captcha display.

Type-Ins are sold on a Cost Per Engagement basis, which makes them solidly lucrative for a pub while also benefitting advertisers in that a correct type-in guarantees that the consumer has examined and processed the creative message.

Their video will help make the value prop even clearer:

Solve Media from Solve Media on Vimeo.



A second use is even more interesting. Instead of charging a monthly sub, or deploying a cost-per-article-read micropayments scheme, a pub can deploy Type-Ins as a pay wall alternative that gives consumers the opportunity to pay for content with their attention to an advertiser message. Pubs get a healthy cost per, and the advertiser gets incredible noticing value and impact.

How incredible? A Wharton School of Business study (published in the IJIMC) showed a 111 percent higher level of brand recall from Type-Ins Wharton School of Business study versus banners, and 12 times the level of message recall. Further, it appears that people are at least as likely to complete a Type-In versus a Captcha in order to get what they seek.

I like Solve for a couple of reasons, and I should also make it clear to you that my company thinks enough of the concept that we are an investor. So take my endorsement for what you will. But even if we weren’t an investor, the dead simple value proposition here is one of those things that I could kick myself for not thinking of first. We’ve used it for clients and it has blown the doors off metrics, with nary a consumer complaint.

And as a means of helping pubs make some money from frugal users that resist paying for content, it may well be a great asset to their revenue models.

There are a few naysayers for this model, who believe that this ad format is essentially too intrusive. I understand their concern but could not disagree more. I really believe that we are in a challenging time as far as ensuring a great flow of content goes. If pubs cannot earn more, we will quickly see a significant drop of what I think of as real content – thoughtful, professional stories that keep people well informed.

UGC is great, really great, but I want reasonably compensated professional content-makin’ people covering the Watergates of our times. I’m OK with a little intrusion (ahem, like the network TV model) if it means that the web can continue to grow as a vibrant information and attention resource for people. An affordable one to boot. My guess is that pubs will be offering multiple ways to pay in the future. And if I know ‘Merica, there are gonna be loads of people who prefer paying with attention.

Start-Up Watch COD: GutCheckIt.com gives brands real time qualitative research results for a song

I don’t think there’s any question that digital is upending the way brands design, gather, and interpret consumer research. As a discipline that long relied on panels and M&M eaters willing to spend two hours on a Tuesday in a room with a two way mirror, research has long had a set of methodologies that were widely accepted, if admittedly imperfect and time consuming.

A fascinating start-up called Gut Check wants to bring the richness and power of traditional qualitative “focus groups” and “one on ones” into the digital age with a digital methodology that dramatically improves the speed and costs.

Online qualitative is not new. What IS new with Gut Check is the speed, pricing model, and DIY nature of this remarkable new service. No more waiting weeks to get a group pulled together. No more traveling to Sacramento and Athens, GA and Cedar Falls, IA to sit behind a mirror and choose between Plain and Peanut.

Get your insights right now from your desk.

Theirs is a self-serve platform that works like this.

•You join and purchase a number of online one on one interviews. The base price is $40 an interview, with volume discounts when you buy 10 or more.
•You screen potential participants with online tools that enable you to define a demographic, a geography (or a geographically diverse group) as well as behavioral factors to zero in on the folks you need to hear from. The people are in a pre-recruited population, available right now.
•You forward your questions one at a time to a respondent who is ready – right now – to discuss your brand, product, campaign, or whatever.
•They respond to your Qs, and then you forward another question until your interview is done.
•The interview closes and you can download a transcript of the discussion for verbatims, etc. Then it’s off to the next interview.

Here’s the 1-2-3 show me:



I want to go back to one detail for a moment. $40 per. The cost of qualitative has soared over the past decade or so. Paying $500 or $600 or even $700 per respondent isn’t at all unheard of. It’s the norm. Don’t believe me? Take the price of the last set of groups you did, and divide it by the number of people you heard from. Let’s say it was $21,000 for the moderator and the room and the recruitment, and the M&Ms. Divide by, say, 32 people (4 groups of 8.) $656.25 per.

Hey, there are times when you are going to want a professional moderator, and to see your respondents. But imagine how helpful it could be to have a quick and dirty read from consumers on pitch creative, or a new product idea, or whatever. I’m not saying you can make all decisions with the aid of this methodology. But I do think that this will enable far MORE consumer feedback at points along the development path, so that ideas and products can be better.

Gut Check was the People’s Choice Award winner at the recent Demo show. And for good reason. Got an idea you want some quick feedback on? Surf on over to GutCheckIt.com and plunk down your company Visa card. And get the input you need in hours rather than weeks.

And if you miss the M&Ms, make a trip to Walgreen’s before you fire up the service. 55 cents, 2 for $0.99 the last time I checked.

Thanks to ad:tech for publishing this first.

Start-Up Watch COD: Expo TV empowers people to make videos about products they love

People. VOLUNTEERING. To Endorse. Your Product. Sounds pretty good, huh? Well you can get it right now if your brand partners with EXPO TV.

I could bore you for thousands of words reviewing all the research. But we all know that personal endorsements are the most powerfully persuasive pieces of info for consumers considering a purchase. More powerful than those glitzy TV ads even. Actually, a lot more powerful than them.

EXPO has created a community of thousands of people that volunteer to make videos about products. And they do it largely because they love those products and want to spread the word.

EXPO TV is farther along than most of the brands I talk about here, but I really love their offering, and want to help them get the word out. EXPO TV has created a community of product fans and reviewers who volunteer to deliver their thoughts in stand-up-presenter videos. Consumers appear onscreen to discuss the merits (and issues) of products. Here’s a little example.

Herbal Essences Hydralicious Self Targeting Review from sarah heiman on Vimeo.



Millions of Americans have webcams and opinions. Lots of them already like your product. On EXPO, anyone can talk about any product that they choose, but brands can encourage consumers to rate their offerings in several ways:

• You can sponsor a contest offering a prize.
• You can get your brand featured on their site and in their newsletter.
• You can build dedicated brand pages on the site.
• You can also use their Tryology program to send out samples in exchange for honest reviews

Additionally, EXPO can distribute videos directly to retailers, who add them to product pages as a means of providing consumers endorsements that boost the trust factor and drive higher sales. Here’s an example from Amazon.

When you partner with EXPO, you work with them to pay a small fee to get the rights to use the endorsement videos anywhere you want, in any geography, for virtually any purpose. People who participate want to be seen discussing your brand. Since the videos tend to be a little longer than you might want for an online video ad or whatnot, you can also cut them down a bit.

This is a free community, so consumers that have issues with your brand can post negative or mixed reviews as well. But EXPO reports that more than 85% of the videos they get are positive. Brands that participate deeply can get hundreds of videos for use in marketing, on their brand websites, and in other places that can make a difference to their businesses.

There are a few other things to note. Videos are all transcribed by EXPO automatically, and indexed all the way down to the SKU. With all this rich metadata and the SEO appeal of video generally, EXPO vids often turn up in the top 5 or 10 results for Google brand searches. How cool is that?

I told you these folks are farther along than other companies I write about. Here’s a list of some of their recent clients. Is your competitor on this list? If so, you’d be well advised to check them out.

• aussie
• Braun
• Caress
• Cascade
• Cheer
• Clairol
• COVERGIRL
• Dawn
• DIGIORNO
• Dove Beauty Bar
• Febreze
• Gain
• Gillette Venus
• Head & Shoulders
• Herbal Essences
• Honey Bunches of Oats
• JELL-O
• KRAFT Macaroni and Cheese Dinners
• LG
• Olay
• Old Spice
• Ore-Ida
• Pantene
• Seagate
• Secret
• Starbucks
• Swiffer
• Tide
• Vaseline

You’d be well advised to check em out regardless, IMHO.

Thanks to ad:tech for publishing this first.