Filed Under – Doomed to Epic Fail

On paper, the idea of allowing users to give direct affirmative consent and feedback about ads they like, things they want, their interests sounds very democratic and utopian.  Power to the People! and all that.  The problem is that any model that relies on users doing anything other then what they really want to do flies in the face of what people actually do online.   Despite the web being about interaction and participation, almost 99% of what people do online is read, not participate.  At any UGC website – only a small portion of the audience actually ever uploads anything.  At YouTube for instance, I’ve heard reports that despite the 100 million users it sees everymonth less then 600,000 users ever upload and share anything publicly.  600,000 might sound like a lot but it’s less then 1% of their user base.  At FoggyGames.com, the casual games website I own, the percent of users who’ve ever rated a game – which only requires a nano second of effort to click on the classic rating star – is less then 1% as well.  Again and again you see participation rates in that range.  So now these new ad models expect the vast majority of users to actually rate each and every ad – even when they have shown again and again they won’t even participate in sites and actions where they actually want to participate – I don’t think so.

Sampling Don’t Work

OK then what about the idea that you don’t need every user to participate that just getting that sample to tell you about what ads they like or don’t like.  Unfortunately the idea of a sample defeats the whole principle of user targeting.  The basis of user targeting is targeting a specific’s user definite demographics, intents or interests.  And again and again – we’ve seen that sampling doesn’t work since it is the way that most site level targeting works today.  Sites sell ads based on samples of their user base – their user base is 60/40 Female/Male and thus they sell a disportionate number of ads targeting females (it’s largely what Glam Media does across multiple websites – not very sophisticated technically speaking).  Thus lots and lots of men get poorly targeted ads just because they go certains websites in this example.  The whole idea of user targeting is to solve that problem – show ads to men with ads for men in that scenario instead of generic ads based on a sample.  So without finite, user level data no user targeting scheme can work.  So in a web where you’ll likely get more then 1% of users to participate, models that requires something much greater then 10% and more like 25% of users to participate seems like a folly even at the start.

Conundrums and Contradictions

The conundrum and contradiction with user targeting is that users say they don’t like being tracked.  Yet what they won’t do is explicitly tell the advertiser or advertising provider what they want.  And yet, again and again users say they want ads targeting to them individually as way to increase the quality and relevancy of ads.  I’ve done enough research to know users like relevant ads – they actually stop them ads and start calling them information (ads are pejorative term meaning noisy, irrelevant, uninteresing, annoying marketing messages).  Tying a user’s information and interests from where users express them willingly (communities, social networks, etc.) to where they get exposed to ads is a way to solve that.  Doing so in a conscientious and respectful manner is critical for all players in the market (trust me I speak from experience – one bad actor can sink a market) if we want to solve the user targeting and participation problem.  And the folly is we’ll be able to avoid that get by getting the all the users online to vote on each and every ad – I’ll hopefully save everyone some time and investors money ‘cuz it ain’t going to work.

No one was really questioning Glam’s desire to brand their remnant ad network as the premium online channel/category for reaching women online offering access to important demo with the reach only networks can provide.  What everyone was wondering was when the house of cards would collapse – you just can’t pay $3 for what everyone else was buying for $.25.  Publishers (and I know a half dozen personally) were all waiting for the house to fall and Friday it did.

It’s hard to turn something that the market values at $.25 into something someone wants at $3.  Glam has been trying and seems to have hit the same wall that publishers hit when selling direct – for whatever reason high quality sites with a decent brand and strong community often can sell 30% of their inventory at premium (essentially retail) rates and leaving the rest as remnant (wholesale rates).   Glam’s publishers had it good for awhile, but as they say if it sounds to good to be true in the end it often is.