Flipping the Ad Model: Consumer Choice == More Money

Talk to a grizzled broadcast TV exec and he’ll lament consumer choice: the choice of many cable/sat channels, the choice of spending time online or in front of the TV, the choice of whether to watch ads or fast-forward through them, etc. In short, consumer choice == less money. In the old TV world you’d make the most money if you could just turn all the TVs on in every household, tie people to their couches and prop their eyelids open. Hmm, I wonder why we’ve moved away from that…

To online businesses–both the majors and those serving niche content–choice is good and the Net’s ability to support infinitely many discoverable “channels” is the key enabler for segmenting the audience into ever smaller, better targeted, more engaged, higher margin groups.

The Holy Grail is true targeting at the level of the individual consumer. Lots of personalization + ad targeting tech has been built that more or less doesn’t solve the problem. The targeting groups keep getting smaller, the margins go up a little but the individual consumer remains an elusive target.

In the days of Web 2.0 and UGC, some have taken the low-tech approach of just asking the consumers themselves. The latest high-profile entrant is Flip, Condé Nast’s attempt to capture the disposable entertainment hours of teen girls. MediaWeek reports that teen girls will be able to populate page real estate with their own art as well as traditional branded images.

There are traditional banner ads in some parts of Flip, including on individual profile pages. But even on those pages, the girls themselves decide which brands’ ads will appear during the setup phase.

It sounds like a good idea. Our own WeatherBug has done very well with having users pick the sponsors of the free WeatherBug product. It’s a win-win. Users are happy because they can exercise choice. Sponsors are very happy because they only pay for users who self-select.

About Simeon Simeonov

Entrepreneur. Investor. Trusted advisor.
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3 Responses to Flipping the Ad Model: Consumer Choice == More Money

  1. jeremyliew says:

    Sim, Having users choose their advertisers is an interesting trend. We’ve seen some success with an opt in sponsorship model with themes for slideshows at Rockyou; I blog a little about this at http://lsvp.wordpress.com/2007/01/07/whither-widgets/. I do think that there is a big difference between what Rockyou and Flip are doing and what Weatherbug is doing though. With Rockyou and Flip, the audience for the user chosen sponsor is other people; visitors to their site. With Weatherbug the only person that sees the sponsor is the user herself. One is an endorsement of a brand by a user for the benefit of third parties, the other is a vote of affinity that is invisible to anyone but the user and the sponsor.

  2. Good point, Jeremy.

    I’m pointing to the larger, encompassing trend of self-selection, of putting the consumer in control.

    Your comment brings an interesting question of which has the potential to bring higher value to advertisers–the knowledge that Person X probably likes Brand A or they wouldn’t have selected it, or, the knowledge that Person X wants to show Brand A to the people visiting her site?

  3. jaypullur says:

    Simeon, ‘consumer picking their own ads/categories/brands’ has been on the radar for our new, soon-to-be-launched Desktop RIA platform. I liked the timing of your blog on this topic.

    If PC has to remain ‘Personal’, then the consumer control on advertising is no surprise. So, self-picking makes higher sense for the desktop than the web.

    Consumer would prefer less tracking of what he/she does on the internet and some explicit control on what he/she would like to see at any point in time. Ads are inevitable (particularly when the service is free) and certainly of use to consumer, when relavent.

    I would be happy to see ads of car companies, dealers, service shops, and many other car-related products/services … when i am looking to switch my car. But once i make my switch, the same ads become irrelavent and irritating. So, why not give me that control on what my current preferene is or let me set my relative preference. And allow me to change from time to time.

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