• by Steve Smith , Staff Writer @popeyesm, June 11, 2010

Since online advertising began, it seems there's always been some kind of scheme afoot to "pay" users for the time they spend with ads. Anyone remember AllAdvantage? In the late '90s there were efforts to give people credits for every banner they watched. You can imagine the ways in which that plan was gamed.

As rich media emerged in this decade, some "subscription" publishers gave non-paying visitors a "day pass" for watching an extended video clip or multimedia takeover unit. The Ultramercial company that devised this model is still with us and migrating to mobile and TV now. While some of these ideas had limited appeal, the underlying principle has always been sound. In a more sophisticated age of marketing, consumers understand that their attention span has value to advertisers. Why not use digital technology to make a fair exchange of value with users?  

The idea returns with the AdGenesis system that launched this week. It is a video ad platform that lets the visitor declare her own brand tastes and buying habits. You watch a video that relates to your own tastes and get in return a range of rewards, including e-tailer discounts, coupons, etc. "We are bringing relevancy and reward together," says Richard Smullen, co-founder and CEO of AdGenesis. "If you deliver information that helps their consumption and gives them value, they will be more engaged and open and excited."  

Well, I don't know about "excited," but the system has a game-like feel. It is being beta-tested at the beezag.com site. Once you log in, the system will ask you a few questions that can be very directed to your buying interests or seemingly random personality queries. The algorithms construct a profile based both on explicit desires and personality type and your own activities on the site. You get a selection of videos you can watch.

In my latest visit, I was offered an Apple iPod Nano ad and one for Tide. I don't know what that means about me. But the technology is also designed to serve the needs of the marketing client. In order to guarantee brands that their video ad has been seen, beezag runs two large numerals beneath the frame at different points in the viewing. To get credit for the ad view, the consumer must enter the two numbers at the end of the clip.  

Smullen says that the technology was responding to weaknesses in online advertising even when, in early tests, the ads themselves were relevant to people. "We were delivering messages we knew were relevant to consumers and weren't getting the response. It proves that it isn't that the wrong ad is on the page, but that the consumer just isn't paying attention." The AdGenesis technology is designed to guarantee attention for the marketer and reward attention for the consumer. The company claims a 25% click-through rate on offers.  

The personality and buying pattern profiling is designed to "invert search," Smullen says. "The problem of search is there are only results on what you search for. But what about what you didn't search for? We put in front of [consumers] messages that appeal to their desires."

All user activity on the site is logged and included in the profile against which marketers can target. There is a lot of predictive modeling based on personality types. "If we have a very tech-driven user who doesn't click on a lot of coupons, we can tell he is outside the threshold for an advertiser that is looking for click-throughs," says Smullen. "We know which users are inclined to watch ads once or twice. We can look at gender, age, anything they have told us and then look at a bucket of those users and their behaviors, and try to optimize results based on the behaviors we have seen from different age groups and genders."

The engine has been under development for two-and-a-half years; in recent months, beezag has been beta testing the system with 10,000 users. One of the aspects tweaked over time was the reward mechanism. "We started off thinking that if you paid cash consumers would be happy, but we lowered the cash paid and raised relevancy  -- and the consumers find that getting something that is more relevant is more valuable," says Smullen. "We found that discounts and coupons are incredible rewards, [along with] the ability to share that with friends."

Smullen says the AdGenesis approach tries to "flip the funnel" on marketing. Instead of trying to find a million people for the advertiser who might be interested in the message, "we have two thousand who just told us they have dry hair. We are getting people who are most likely to buy. It is a shift from reach to greater accuracy."

But of course it does need scale in order to find even those 2,000 dry hair "sufferers." While beezag is partnering with others to drive people to its rewards system, it is doing this as a white-label solution for third parties who can build the project as a section of their site. Beezag will be launching with a dozen publishers in coming months, including a large magazine and cable company and a games portal. Each iteration of the site will be tuned to the particular kind of consumer who frequents the site. For instance, a large game site found that visitors were uninterested in coupons -- but they do want to watch game previews others haven't seen yet.       

To be sure, there are some caveats here -- not least of which is achieving scale on a model that requires persistent participation from user. Logging into beezag is an interesting activity, but is it compelling enough for people to make it a habit? Likewise, the technology behind recalling numbers to validate a video viewing is not quite right. It feels a tad Pavlovian to the user. Do we want ad consumption to feel like a flash card test? And it actually can distract from the ad you are viewing, because you're glancing at the bottom rail to ensure you don't miss the sequence. If somehow the experience can be made more entertaining and less focused solely on ad viewing, then the environment might attract a wider swath.    

There is no doubt in my mind that marketing culture and consumer culture are moving to a place where the exchanges of value will be much more explicit than they have been in the last century of mass media. Traditionally, we all agreed implicitly that in exchange for free or subsidized content, we would sublet our consciousness out to advertisers for ten or more minutes a TV hour, or endure the ugliness of the typical ad-choked Web page.

Digital technology and savvier consumers make possible more tangible exchanges that have a more determined value. But how that inevitable evolution actually occurs is still anyone's guess. Smullen and AdGenesis call this approach "me-commerce" because of its highly personalized and consumer-empowered bent. You could also call it "commercialized-me." This is the point where consumers recognize their inherent value in the marketplace, and expect to be paid for their attention.