The Rise of In-Content Advertising
by Oliver Roup (Guest Contributor)
Today, there isn’t a strong need for consumers’ schedules to revolve around their favorite TV shows, thanks in large part to the Digital Video Recorder (DVR). They allow viewers to record their favorite shows and play them back when it is convenient for them. As a result, the quantity of viewers watching commercials has dropped so they just aren’t as effective as they used to be. So advertisers have stopped relying exclusively on commercials to get their message out and are increasingly turning to advertising that delivers their message directly within a program’s content (commonly referred to as product placement). Integrating advertising into program content makes sense since program content is what viewers are truly interested in, where their attention is the most focused, and where an advertising message has the highest chance of being understood and acted upon.
The Evolution of Online Advertising
Today, we are seeing a similar transformation occur online. Originally, banner ads were the predominant form of online advertising, as commercials were on TV. But just as TV commercials lost their effectiveness as consumers changed the way they watched television, banner (and even text) ads are losing their effectiveness as online readers have grown accustomed to the spaces in web pages dedicated to advertising and have started to simply ignore these areas.
To illustrate this point, let’s consider the web’s first banner ads which went live on HotWired on October 27, 1994. The click-through rates (CTR) on some banner ads were as high as 78%. Today however, according to Google, the average CTR of a banner ad is closer to just a fraction of one percent (0.10%). What brought the figure down so significantly? Consumers realized that banner ads typically didn’t contain the information they visited the web site for and they started to ignore them.
A term called banner blindness was coined to describe this phenomenon, and numerous studies (complete with eyetracking heatmaps) have confirmed its existence. The following image demonstrates where readers’ eyes spend time on a particular web page. It’s clear that the banner and text ads delivered above and around web content are largely ignored.
An additional challenge banner ads face is that they aren’t delivered at a time when the reader is compelled to take action. So, even a well-designed and well-targeted banner ad may attract eyeballs but that ad won’t necessarily “convert” into an action because the reader isn’t looking for product information at that point in time.
These two limitations can be summarized as follows:
- Banner ads are largely ignored by most website visitors.
- Banner ads that are viewed don’t convert at a high rate because they aren’t delivered at a relevant time.
The solution to these limitations is to reach website visitors where their attention is, when they are ready to take action. A form of advertising called in-content advertising allows advertisers to do just this.
In-Content Advertising Overview
In-content advertising is similar to the product placement advertising options businesses turned to when television commercials began to lose their effectiveness. The category of “in-content” advertising can mean anything from tightly integrated, contextually relevant in-content links to text or banner ads placed between pieces of content. The discussion here will focus on the former due to its stronger performance and consumer experience.
Tightly integrated in-content advertising works for the very reason that banner advertising doesn’t:
- Website visitors see and interact with these ads. The content portion of the site is where readers spend their time and where their attention is focused.
- Website visitors experience these ads when they are actively seeking information. Web visitors are exposed to in-content advertising when they are reading about a product, service, or company that they are interested in, or when they are seeking advice on a product purchase.
Options
There are a variety of delivery options available for this type of advertising, most of which fall into one of two general categories: link affiliation or link insertion.
Link Affiliation
Link affiliation ensures that links inserted by visitors in a social media environment, or links inserted by an author within an article or blog post, are associated with online merchants and advertisers. Advertisers that participate in these programs pay publishers on a per-click basis (when traffic is sent via a link to their site) or on a per-sale basis (when traffic results in a purchase).
Some companies offer an automated link affiliation service that manages and optimizes link affiliation for site owners. Alternatively, site owners can sign up directly with advertisers and advertiser networks and manage the link affiliation process on their own.
As an example of link affiliation, let’s consider a site owner who posts a movie review on his or her site and opts to link the DVD’s title to a page on eBay where visitors may purchase the movie. eBay (the advertiser) gives incentives to publishers to send traffic to them. If the site owner is using an automated link affiliation service or has opted to manually affiliate the link with eBay they will receive a monthly commission payment reflecting the clicks or sales the link generated.
Link Insertion
Link insertion applies algorithms to a web page to infer its content and adds links to the page that is relevant to the page content. These links take the reader to a page on an appropriate merchant’s web site. Vibrant Media and Kontera are the best known link insertion providers, although their solutions tend to focus more on inserting ad units (think a link with a pop-up ad). Other services, including VigLink’s link insertion tool (Disclosure: I am the CEO of VigLink), insert product links.
Let’s revisit the example of the movie reviewer above to illustrate how link insertion services work. Here, the movie review that is published doesn’t include a link to the DVD’s title so a reader can easily find the DVD. Link insertion services recognize the title of the DVD and add a link to an online merchant’s site where a reader can purchase the DVD. The publisher receives payment when their visitors click on the link or purchase the DVD and the advertiser receives additional relevant traffic and sales.
The In-Content Advertising Advantage
In-content advertising offers advantages for the publisher, the advertiser and even the consumer viewing the ad.
Because these types of ads reach consumers at a point when they are more engaged and more likely to take action, publishers are typically able to deliver high CTRs and more conversions from these types of ads. In-content ads also introduce a new revenue stream for publishers that doesn’t require additional ad space because the ads are delivered within the content itself and don’t access the space around the content where banners are already placed.
Similarly, advertisers generally enjoy a strong ROI on these types of ads. Ads delivered within site content reach consumers exactly when they are seeking information about a product and can be very influential in purchasing decisions.
Finally, consumers benefit from access to product information at a time when they want to be connected with a particular product, company, or service (and of course if they wish not to be, they are still welcome to ignore these recommendations). Thus, these ads are more likely to be considered useful information as opposed to marketing “noise.”
Concluding Thoughts
The way advertisers elect to communicate with consumers is evolving as the way that consumers seek and digest information changes. Delivering advertising between slices of television programs during commercial breaks used to be effective, but this is no longer the case and advertisers have evolved to deliver advertising within the program itself.
The way consumers are locating information online is also changing drastically. Consumers tend to ignore banner ads, preferring social media sites, online forums and blog content to help them make purchasing decisions. In-content advertising leverages this monumental change in a way that benefits advertisers, publishers and consumers alike. It is an advertising form that has all the makings to be the web’s next big advertising frontier.
Oliver Roup is the founder and CEO of VigLink, a service that allows online publishers to earn money from the content on their site. Previously, he was a Director at Microsoft in charge of product for various media properties including XBOX Live Video Marketplace, Zune Marketplace and MSN Entertainment. Oliver was also an early employee at Internet Radio pioneer Echo Networks and has worked for Paul Allen at Vulcan, for iPlayer at the BBC and for the Founders Fund. Oliver has issued and pending patents covering micro-transactions, media and metadata. He received his bachelor’s and master’s degrees in computer science from MIT and his MBA from the Harvard Business School.
Cheezburger CEO’s ambitious plans to change how we consume news
Ben Huh, the CEO behind the I Can Haz Cheezburger comedy sites, is frustrated with the news industry. Everyone’s moaning about job cuts and the death of traditional journalism, but Huh believes people should stop whining and instead brainstorm solutions a big problem – the way we read the news hasn’t changed since the golden days of reading newspapers.
We still have the “inverted pyramid” structure of an article, and front pages ported to the Web don’t fit how we read news online, Huh believes.
Enter the Moby Dick Project. Still in its inception phase, the initiative is a piece of open-source software that would allow people to curate their daily news, with a crucial difference from today’s offerings: this technology would make sure to include perspectives you might not normally subscribe to, such as left-wing opinion columns if you read mainly right-wing news sources.
“To read different perspectives on one platform can change how people read news,” Huh says in a phone interview. “We should read opinions we might not normally encounter when we keep going to the same source.”
Huh has also been frustrated seeing the same news repeated in breaking news. Why not just get the news that’s most important, and that’s it? Huh wonders. After all, look at what Twitter has done for news out of Egypt, for example. Huh says he notices repetitive journalism giving us background info we read elsewhere 10 times already.
“Let’s break down the news to the most important facts, one or two sentences,” he adds. For readers who want to learn more, the Moby Dick Project will allow users to click a link to read background on the subject.
In a wireframe for Moby Dick (below), Huh outlined his vision: the left side displays the headlines and timely news, quick headlines and short briefs. The middle column shows media relating to the news. Just to the right, an “unfiltered stream” includes tweets and news awaiting confirmation, much like the tweets we read in Egypt or Tunisia. Once these bits of media are verified, a scale on the bottom can switch to “Credible” (as opposed to “Speculation”).
“We consume media from diverse sources,” Huh says, “and giving people a place to discuss and air varying opinions is important.”
Huh also thinks it’s integral to look back at the front pages of the past, but how can someone find the exact headlines on CNN.com on 9/11? One of the project’s other objectives is to aggregate a searchable database of home pages from across the world.
What did Huh learn from running the Cheezburger network, his comedy sites attracting 400 million pageviews monthly? “It’s an uplifting experience to understand how users want to participate in the media process. We see that on our sites, where we rely on people to submit content voluntarily.”
A business model is too far away to discuss, Huh says, but if Moby Dick attracts passionate consumers and demand soars, a business model will begin to emerge, he points out. Journalists, programmers and UI designers will be expected to volunteer their time to the project, Huh says.
In fact, Huh is looking for more interested people to contribute to Moby Dick. On July 29, Moby Dick fans will convene at Stanford University to hash out the first phase of the project. Huh says anyone looking to get involved (especially those in the San Francisco area) should contact him via his blog.
This project is also giving Huh a chance to return to his roots. The digital media CEO is a journalism school project who interned at newspapers such as the Times-Picayune. Huh describes the return to journalism as both thrilling and annoying: journalists today aren’t taking advantage of all the technology available to them, Huh says, but it’s exciting to see the many news start-ups taking the reigns and innovating the media process.
“Still, though, those upstarts rely on a standard presentation format, and we’ll be innovating on that side of the journalism industry.”
Facebook revamps Chat tools, adds Video and Group functions
Facebook is rolling out a redesigned Chat service, adding functions to let Facebook users video-chat with friends. Group Chat has also been introduced for users who want to talk to multiple friends at once.
In a streaming live announcement, Facebook CEO Mark Zuckerberg offered details of a redesigned Facebook Chat, in order to create more layers on the company’s “social infrastructure,” as Zuckerberg described it.
“Given that we’re one of the biggest chat networks in world, these will be meaningful tools for that part of communication,” Zuckerberg added.
As previously reported on DigitalJournal.com, Facebook is adding video to its Chat service. Video calling, powered by Skype, is now built into Chat, allowing any Facebook user to video-chat with another user with two clicks of a button. A plug-in takes around 30 seconds to download, and users need to have cameras equipped on their computers.
Video chatting is one of the new apps flowing over Facebook’s social infrastructure, Zuckerberg said.
Skype CEO Tony Bates appeared in the press conference to say Skype is talking with Facebook about introducing some paid products available through the Web format. Bates added that half of Skype’s traffic is video calling
Group video chat isn’t available yet, but Zuckerberg said he wouldn’t rule out the possibility in the future. He also added video chatting isn’t available yet for mobile.
Facebook is also introducing Group Chat: one of its more requested feature, multi-person chatting will let Facebook users talk to many people at once, simply by adding another friend to a conversation. A button is clearly marked Add Friends to Chat. Multi-person chat is already possible on chat services such as Gmail Chat.
Finally, Zuckerberg announced a Chat redesign rolling out today. A new sidebar lists the people you message most, even listing your top Friends who might not be online. The sidebar scales to individual browser sizes and is not yet available for mobile users.
Earlier in the announcement, Zuckerberg dangled a few tantalizing stats: Facebook has now reached 750 million members, and users are now sharing 4 billion “things” on Facebook daily, as Zuckerberg put it.
[Via Digital Journal]
Digital Journal launches Global Editorial Meetings, story meetings opened up to public
Our sister site, Digital Journal, made a big editorial announcement today. To keep you up-to-date, we’ve included a press release below:
Digital Journal today announced a new community newsroom initiative aimed at widening the scope of news covered globally, and involving the public in the news creation process.
Dubbed “Global Editorial Meetings,” these online chat story meetings are open to the public and hosted on Digital Journal.
“Every news organization has story meetings,” said Chris Hogg, CEO of Digital Journal. “But traditionally they happen behind closed doors, with a selected group of individuals deciding what everyone should be reading. We want to change that to see how editorial direction will shift by opening up these meetings to the public. Starting this month, our Global Editorial Meetings will allow everyone to share details on what kind of stories we should be covering, and what stories are going unnoticed in the press.”
As a hybrid news network that combines professional journalists with citizen journalists and bloggers, Digital Journal has always taken a forward-thinking approach to journalism. The company has successfully crowdsourced thousands of story ideas from a large and growing contributor base and held liveblog workshops on journalistic practices. With Global Editorial Meetings, Digital Journal is going one step further to open up these meetings to give an editorial voice to literally everyone.
In the Global Editorial Meetings, Digital Journal staff members and editors will chat live with readers, journalists, bloggers, photographers and passionate news junkies about important stories and topics from their city, province/state or country.
Conversation will focus on multiple geographies and news verticals, and particular attention will be focused on stories the public believes are being under-reported.
After these Global Editorial Meetings are complete, Digital Journal will use feedback and input to assign stories to thousands of Digital Journalists around the world. The company will use its Assignments technology to create, track and organize a massive editorial project to provide the public with content it wants.
The first Global Editorial Meeting will take place on July 11 at 9 a.m. (Eastern time), and the second will happen July 21 at 2 p.m. (Eastern time). A third Global Editorial Meeting will take place on July 28 at 8 p.m. (Eastern time). The live chat conversations will use Cover It Live and anyone can participate.
To participate in a chat, visit the Digital Journal Global Editorial Meetings group and click on the blog post for the day(s) you wish to attend. You can set a reminder for yourself on the embedded chat widget inside each post.
“Our goal is to get our finger on the pulse of the world,” said David Silverberg, Managing Editor of Digital Journal. “Combining the public’s voice with the Digital Journal platform to create, assign and publish content is a really powerful marriage. We hope to be able to get a much better sense of what people find important, and then deliver that information to Digital Journalists who can make sure those voices are being heard by providing coverage of all those topics.”
“Digital Journal is recognized as a pioneer in the news industry for bringing in everyday people as reporters,” said Hogg. “We want to continue to lead by example, and so we’re opening up our newsrooms and giving the public a forum in which they can be heard.”