Can User-Selected Advertising Improve Response Rates?

This article by Hollis originally appeared in ClickZ on January 29, 2008.

We’re all familiar with ad-supported content models, and even ad-motivated action models (remember those ghastly surf-for-points companies during the dot-com boom days?). The latter actually hasn’t altogether gone away, and a new breed of act-and-earn companies, like Free Laptop Nation, has cropped up.

Companies like Free Laptop Nation generate high response rates for their advertisers, but how genuine is the user’s interest in the advertisers’ products or services? It seems like we’re talking more about a trade-off proposition than real advertiser value — the consumer “tolerates” the ad because the (perceived) value of the incentive outweighs the nuisance of the ad.

Considering the ever-divided consumer attention, an advertising model that puts consumers in charge of what ads they receive holds promise. SponsorSelect does just that.

SponsorSelect is a product of AWS Convergence Technologies, the company behind WeatherBug. The idea for SponsorSelect originated about six years ago when a potential WeatherBug advertiser refused to advertise unless it had the assurance that the user opted-in to see its ads, and only at that point of selection would the advertiser pay for exposure. Seeking to accommodate this advertiser, AWS developed a prototype platform, which eventually morphed into the stand-alone SponsorSelect product.

SponsorSelect views itself more as search marketing than typical online display advertising, but with greater branding capabilities and, ultimately, fewer inventory limitations than search. Like search, SponsorSelect operates on a dynamic CPC pay-for-position basis with positioning also affected by ad yield. Although SponsorSelect has been used on WeatherBug for the past five years, SponsorSelect began recruiting publishers last year to build out a network into which the technology was integrated.

SponsorSelect shares revenue with its publishers who, they say, are attracted by a higher eCPM than any other advertising opportunities out there (SponsorSelect says the publishers CPMs average $100 gross). The company also suggests using SponsorSelect to get the consumer over the hurdle of paid-for content, as with an ad-supported one-day trial pass, and to monetize “98 percent of users the publishers wouldn’t otherwise be able to.”

For the user, here’s how SponsorSelect works: once per user session on a participating site, as a gateway to desired content such as an online game or cartoons, the user is asked to select a category and then a content sponsor to view the content for free. If the user doesn’t want to choose a sponsor, the user can select “no thanks” and instead see random ads. Once a sponsor is selected, SponsorSelect serves a “loading screen” with a :15 ad spot for the sponsor and the sponsor’s display ad at the top of the page. As the user views the content, the sponsor’s ad is present throughout the experience, reinforcing the value proposition or call to action that the sponsor wants the user to take post-content experience. After completing their content experience, the user is directed to the sponsor’s landing page.

For the media buyer considering SponsorSelect, some noteworthy points: SponsorSelect doesn’t offer full transparency or control over the buy — SponsorSelect reveals which publishers are in its network, but the ad delivery is blind. Most buys are done on a national basis with limited geo-targeting available.

Also, SponsorSelect still has limited inventory. Its network has eight publishers with plans to add two more top content sites per month. Because of the nature of its initial partners — primarily casual gaming sites — SponsorSelect’s user demographic skews female ages 25 to 45. The best performing advertiser categories span health, automotive, childcare/parenting, travel, real estate, finance/investing, gardening/home improvement, and online education. SponsorSelect doesn’t have video ad capabilities, but says they’re forthcoming.

SponsorSelect’s VP Shane Lundy would like to see all advertising move to this model.

“Consumers want more of their content digitally accessible, but right now, the amount of digitized content is a fraction of all the content out there, mainly because the current online ad model makes it difficult to justify the digitization costs,” Lundy said. “Imagine sponsor-supported episodic digitized content.”

Now that’s thinking pretty darn big.

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