Advertising Technology

Why Do We Need Another Ad Tech Company?

I recently had the privilege to have a conversation with Chad Little, co-founder of his new company called Adhesive, which will be focused on show-stopping CPC ads that generate exceptional performance. Mr. Little has had a long successful history as a serial entrepreneur, including his last company Fetchback that was acquired by GSI Commerce in 2010.

Tim Nichols (TN): Why do we need another ad tech company?

Chad Little (CL): “Need” is a strong word. It’s hard to argue that the market “needs” a new ad tech company. It already takes a microscope to read the current LUMAscape. I do believe the market needs to evolve and innovate display ads. We’ve been stuck for too long on the same ad sizes and page layouts. I also believe the market needs simplification. I know I’m talking out of both sides of my mouth here as we’re starting another ad tech company, but hear me out. Those in and outside our industry know just how complicated our space is. Brand dollars sit on the sidelines due to this simple fact.

My background is in design. I was a designer before I became a startup junky. I think most people equate design to how something looks. It’s much more than that. Good design is as much reductive as anything else. It’s figuring out what can be simplified and taken out. We have to steadily redesign our industry and I believe that can start with display ads. It’s about how the user interacts with the ad, how the advertiser sets up their campaigns, what it looks like, and the data that is driving the ad’s relevance. Part of Apple’s brilliance in design goes well beyond the interface and the OS.

The new ad formats we’re developing actually put the emphasis on the content in the ad vs. the ad container itself. They’re elegant, clean and simple. They allow the advertisers message to be the key focus. I’m sure it can appear a bit humorous to be excited about an online ad’s design, but I am passionate about the impact we can have by applying good design principles to online advertising.

TN: What do you mean by new ad formats?

CL: I’m referring to the new IAB Rising Star formats that were put forth almost two years ago. These formats are more engaging. The ads have room to integrate widgets or apps that allow users to interact with a map, watch videos, or take a poll. The goal is to drive higher CPM’S and improve the online experience for the consumer. AOL has been working on “Project Devil” for the past few years. This initiative is about the new formats as well as redesigning publisher webpages. The redesigns include by removing clutter, and swapping out the smaller ad units for the larger Rising Star formats.

Early reviews are positive. Compared to a standard 300×250 unit, an IAB Rising Star Portrait ad unit is far superior. The ad unit attracts attention 2x faster and viewers looked at it 4x more often and 4x longer. Portrait units attract attention 35 percent faster than competing units, 81 percent more attention, and 95 percent more time in length of fixation. Users that indicated they would recommend the brand or product to friends and family rose 46 percent (i).

TN: What’s different between what you’re doing and what AOL is doing with Project Devil?

CL: adhesive is not focused on brand dollars. We’re targeting the online retailers and direct marketers. We’ve developed a self-service interface where advertisers can log in, set up a campaign within two minutes, and most importantly, bid on CPC basis.

In my opinion, Project Devil has been a successful endeavor for AOL. I think the press about Project Devil has been more about outside expectations of how long it has taken for AOL to get to this point. This type of change takes time. The more companies that get behind these innovative ad formats, the more success we will all see. We have a bit of an altruistic vision that is in line with AOL’s. We also want to make the web a more beautiful place. I believe that a strong vision sparks a passion in people and is crucial to create sustainable performance for any company. I’m passionate about great design and it’s time that the web and the ads that appear on it reach the next level.

TN: Are you doing all the Rising Star ad units?

CL: Our initial focus is on a version of the slider where we’ve added an adhesive twist. We’ve slimmed down the slider bar to make it less intrusive. The bar will display dynamic messages and products based on each individual consumer. The consumer can slide the page over, browse, complete a purchase, and slide right back to where they left off. Publishers now have an easier way to get the consumer back to their website after viewing an ad.

The slider ad appeals to publishers who don’t want to change their page layouts. All it takes is adding the code vs. producing a new page layout. We will be advancing into other ad units as we build a critical mass of advertisers. Our goal is to ensure we have a good fill rate when introducing units like the Portrait or Sidekick.

TN: Users tend to complain more about ads like this. Are Slider ads too aggressive?

CL: Ads like the slider have to strike a good balance. The balance is between the size of the ad itself, its relevance and frequency. If publishers choose to show irrelevant ads at high frequencies they should expect a lot of user backlash. The Slider ad is always above the fold as it sticks to the bottom of the browser. But unlike the traditional pop up ad, the slider is less aggressive and more user friendly.

The adhesive Slider ads are behaviorally driven. The slider is invisible to most consumers and only appears if the timing is right and if the data shows this is a product that the viewer would be interested in. Keeping the right frequency cap and relevance is the key to the user experience and performance. They’re similar to the small promo’s we see on TV at the bottom of the screen.

Existing ad units are going to change; it’s a matter of time. They’re too small and this lack of real estate hinders advertisers from providing more utility and entertainment in their ads. As a result, we see pages cluttered with a ton of smaller ads.

TN: How is adhesive different than your last company, FetchBack?

CL: Both companies rely on data in order to delivery highly targeted ads. You can’t build a sustainable ad tech company that delivers services to online retailers if you’re not delivering conversions. It takes quality behavioral data to do that.

FetchBack is a company that provides customized retargeting services to the same market. These includes highly integrated campaigns where the creative is unique for each advertiser and delivered to only their lost prospects. FetchBack also prices it’s services on either a CPM or CPA model.

adhesive is also focused on online retailers but we have a CPC pricing model and a more comprehensive approach that allows advertisers to display ads to consumers who have never been to their site. We also have a more simplified approach. Advertisers can setup their creative within minutes by uploading two graphics and some text. We do advise that multi-product retailers provide a product data feed. After this simple setup, we’re ready to deliver these new ad formats that are larger, far cleaner and produce amazing results.

TN: Finally, how do you see the market evolving?

CL: We envision a market where we will have more premium inventory, such as these ad units. The older units will be found in the exchanges and DSP’s. In the future premium formats will hold higher value and eventually push out some of the older ads due to performance or space. Eventually, we will see more of these new ads at which point they will become commoditized. When that happens, we will well need to innovate to the next step.

Display ads need to become larger, more creative and the pages they reside on need to look better. Direct response advertisers have led the majority of new innovations on the web and there’s no reason why they shouldn’t be playing a key role in the push for these new formats.

TN: Thanks, Chad.

 

Tim Nichols is Principal Media Director at Exact Drive, a company that plans, manages and optimizes Internet advertising campaigns.

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(i) “Eye-Tracking Neuro-Marketing Study Focuses on Dodge, Verizon, and Zappos IAB Portrait Ad Unit Effectiveness.” Caroline Campbell, “AOL and the IPG Media Lab Release Groundbreaking Research on the Evolution of Digital Branding”, Jun 21, 2011

 

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