Web ads that learn from you [Updated]
This might surprise you, but the holy grail for many online advertisers is to make an ad that people actually like. Based on the current state of the banner ad economy, that might not seem like the case.
Thanks to the simple addition of thumbs up and thumbs down buttons on many websites, advertisers are finally getting a sense of how enjoyable (or annoying) their ads are.
The Internet has long provided a measurement of how effective an ad is -- that is how many times it was clicked versus how often it was shown, a metric called click-through rate. But that's based simply on how loud and flashy a banner can be in order to attract a reader's attention.
A click doesn't necessarily convert to a purchase, or "conversion" as they call it, nor are visitors guaranteed to associate the product positively. If an ad mimics a virus alert, it might get clicked out of fear or urgency but won't elicit a pleasant reaction once users realize they were duped.
Many social networking sites, including Facebook, Digg, Reddit and StumbleUpon, are beginning to shift toward a subjective ad model. Initial results from allowing users to rate ads have been mostly positive. The success may be inspiring a trend, as advertisers throughout the Web seem to be toning down on annoying ads.
One of the boldest implementations is Digg Ads, which publicly launched in August and has tested exceptionally well, according to Mike Maser, Digg's chief strategy officer.
The new sponsored posts appear in the main content space and look almost identical (save for a thin gray line and small "sponsored by" text) to user-submitted news stories. Whereas an isolated graphic ad on Digg gets about eight clicks out of every 10,000 impressions, Digg Ads are pulling click-through rates of 2% to 3%.
"The results were astounding to us," Maser said. The advertisers are "writing copy and headlines in a way that's almost as if you'd want to share it with someone."
Digg's philosophy of allowing users to curate good content by voting on what's worthwhile and "burying" what stinks has converted well to paid spots. Advertisers are encouraged to make good, funny, compelling ads rather than loud ones because users can knock out the lame ads just as easily as they can "digg" them.
Digg's bold twist is that the company charges advertisers more if the users dislike their content and less if it's well-received. This usually results in bad ads getting shown less frequently.
"We actually consult with brands and marketers on how to write those [good] headlines," Maser said. "We have a full-time copywriter."
Intel was one of the first adopters of Digg's new platform. One of the products of that partnership was a rather edgy ad titled "Watch Hot Girl Vlogger Take WiMAX For A Spin" (pictured below). The borderline sexist plug for Rocketboom's Ellie Rountree's video perhaps played to Digg's perceived overwhelmingly male audience.
Maser points out that the gender divide isn't as significant as it once was despite the continued site comments like, "Gasp, a girl on Digg!" Of the site's 40 million unique monthly visitors, 40% are female.
Regardless, Intel spokesman David Dickstein wrote that the company was "satisfied with the results." He added, "We chose compelling content from our consumer blog on Intel.com rather than copy-written ads to facilitate the connection with Intel experts at a more personal level."
Mason Wiley, senior vice president of marketing for online ad network Hydra, isn't surprised by the bold attempts these programs have spurred.
"People tune out ads," Wiley said. "Nowadays, to get attention, you have to be kind of crazy. ... Smart advertisers are trying to make ads that are entertaining."
Social news competitor Reddit has begun slowly rolling out a similar ad platform. In partnership with Adpinions, some of Reddit's 7 million monthly unique visitors are seeing banners with two thumb icons underneath.
While some ad groups are seeing massively increased click-through rates, the major value is all of the feedback they're receiving, said Luke Iannini, chief executive of Adpinions' three-person team.
It lets them cater ads to location, sections and time of day. "That's part of the secret sauce of our algorithm," Iannani said, taking into account "relationships between products."
The system automatically figures out that the video game section likes Nintendo ads and the political session likes Thomas Jefferson statues. A baffling trend is the recurring similarities between people in Boston and Miami.
Adpinions had demonstrated its product to Facebook, Iannini reminisced. A week later, thumb graphics began appearing underneath ads throughout the social networking site. Facebook is often mum on the inner-workings of its platform and the company didn't respond to e-mails seeking comment.
Facebook seems to demonstrate that the concept can indeed scale. It has probably the world's largest ad opinion pool. Leveraging these massive amounts of data could very well have contributed to its projected $500 million in revenue this year.
As the Internet's emerging sites turn on these interactive ad features, we can't help but wonder why Google hasn't integrated them into its dominant AdSense platform. How long until Google gives the thumbs up?
Updated, 5:55 p.m.: Clarified Mason Wiley's title, which is senior vice president of marketing for Hydra. The original version said he was vice president of marketing.
-- Mark Milian
Top image: Reddit. Bottom image: Digg