• by Joe Mandese  @mp_joemandese, April 29, 2011

For an industry that produces something most people say they detest and usually try to avoid, Madison Avenue has a pretty big chip on its shoulder. Sure, people love to talk about ads-research shows they often do like them and frequently seek them out-but the notion that human beings might actually want to hold on to and even share advertising seems counterintuitive in an era of supreme consumer control and hyperfragmentation of media. But a new segment of the industry is emerging on the assumption that people don't necessarily want to avoid ads - they just don't want to be interrupted by them when they are not relevant or when they are busy engaging in media content the ads may be interrupting.

"The closer you get to Madison Avenue, the more people hate advertising," says Scott Kurnit, the digital media entrepreneur who hit it big with About.com. And if you listen to the venture capitalists who have invested $80 million in his next venture, AdKeeper, Kurnit is about to hit it big again by changing the way consumers interact with advertising. Kurnit understands Madison Avenue's psyche better than most people. He grew up in the business, and has watched it evolve from analog to digital, but he believes that despite - or maybe because of all the new technology - "we're still an industry of self-loathers." Kurnit has an interesting stat to back up that assertion. When his team was doing its due diligence for AdKeeper, a platform enabling consumers to effectively "bookmark" online ads they might want to see later, he commissioned Nielsen to conduct some research, which found that more than half (56 percent) of average Americans would utilize such a service. When he conducted his own survey of "agency guys," Kurnit said not one saw any value in a service enabling consumers to "time-shift" their ads for later consumption. When he asked vcs that same question, Kurnit said "four out of six said they would use it." That probably explains why he was able to raise $80 million to help fund it. It also explains the kind of opposition he is up against. "If the people in our business don't do the thing themselves, why would they expect consumers to?" he asks.

Fortunately, Kurnit is not relying on advertising agencies to get AdKeeper off the ground. He is relying on their clients, and has already signed up 60 of the biggest national advertisers - companies like at&t, Ford and Verizon. One biggie, PepsiCo, was so impressed with the concept that it is actually mandated that every single banner ad it serves has to incorporate AdKeeper in it. "In other words," says Kurnit, "anybody who doesn't use my stuff isn't going to get Pepsi to advertise on their site." As the model proves itself, Kurnit believes more marketers will take that position - and as more do, Kurnit believes that any publisher depending on display advertising from big brands will ultimately be compliant. That's an aggressive business model, when you consider that it fundamentally means retraining the entire online advertising marketplace - from advertisers to publishers to consumers - to effectively time-shift a significant part of advertising impressions from a publisher's page to AdKeeper's servers. It also means that a significant share of online advertising could shift that way too. Though Kurnit asserts that AdKeeper will have an incremental effect, increasing the effectiveness of online advertising and attracting a greater share of advertising budgets from other media, he believes it is reasonable that AdKeeper could eventually take as much as a 5 percent share of total online ad spending over time.

While Kurnit has developed the most aggressive business model around the notion that consumers want to time-shift, keep and share online advertising, he is not alone. A range of new online advertising platforms are building new features that enable consumers to do just that, though they currently position them as secondary features to another primary business model.

Moat.com, which also lets consumers search for and save online ads for later time-shifted viewing, built its system as a means of demonstrating the effectiveness of online ads to advertisers and agencies in hopes of convincing them to utilize its services to improve the quality of their ads.

"The ad is the brand, the message and the content," says Jonah Goodhart, co-CEO of Moat. "We haven't made online advertising emotional [before this]."

While Moat wants to be the creative department's best friend, it could also prove potentially embarrassing for some agencies and advertisers by exposing how badly their ads actually perform. Kurnit says AdKeeper also plans to publish an index of the most and least "kept" ads, which could become a proxy measure of consumer engagement for online advertising and a new performance measure for digital agencies to live up to. It could also become a new benchmark for publishers. Kurnit concedes that some publishers want to be on the "keep index," while others do not.

Ultimately, Kurnit sees "keepability" as becoming a new currency for measuring online ad performance, and believes advertisers, agencies and publishers have reason to be both excited and wary of the data that will flow from it. But in the end, he says, it will achieve a common goal that will make online advertising better for all concerned, because it will lead to the creation and placement of ads that consumers care enough to keep and pay attention to when they're actually in the mode to consider advertising.

While Kurnit clearly believes in AdKeeper's model, he says it is part of a broader movement in the online advertising industry to finally get a grip on the quality of display advertising and to begin thinking about how users experience it. He cites AOL's "Project Devil" initiative, which CEO Tim Armstrong, an old advertising sales veteran, conceived to simultaneously reduce the amount of ad clutter AOL users are exposed to and also to introduce new online advertising formats that engage consumers better than traditional banner advertising. AOL liked one of those new platforms so much, super-rich-media server Pictela, that it paid millions to acquire it late last year, and integrate it as the cornerstone of Project Devil. But there are an array of nouveau riche media developers leveraging technology, especially programmable apps, dynamic data serving and cloud-rich bandwidth to transform the online user's advertising experience (see "The Nouveau Riche" in April's OMMA). A strong component of many is their ability to share ads with friends, including Spongecell and Adventive.

"What we're all trying to do is make the online advertising experience memorable, sharable and valuable," notes Ben Kartzman, CEO of Spongecell. "We're trying to drive engagement from a banner." New York-based agency wit Media now uses Spongecell technology for more than half its display advertising. Agency president Clint White says that creative is "more important than ever before" in making banners "a productive use of time."

In a presentation titled "Adding Proactivity to Interactivity" at the recent National Arts Marketing & Development Conference in New York, White and Spongecell's Kartzman showcased a Spongecell-packed campaign for the Chamber Music Society of Lincoln Center.

One ad, a 300 x 250 banner that ran on nytimes.com, featured a "roll over to listen" button superimposed on changing graphics. But that was just the main section of the banner. In addition to being able to hear real chamber music via the rollover, consumers could also use buttons on the banner bottom to "share on Facebook," get a "free Beethoven download" or click for "schedule and tickets." The download required consumers to enter their email address right into the ad, which resulted in the creation of an opt-in database for the arts group.

Another benefit to the new adkeeping models isn't just that they enable consumers to keep advertising, but they also enable publishers to keep users on their pages, instead of clicking through to a destination linked to a banner ad.

This is especially important considering the nature of Internet ad rotation. If a consumer notices an ad on a Web page, clicks somewhere else on the page and then decides to look at the ad, chances are it's probably no longer there - having been replaced by another ad. "When they come back, it's gone," bemoans Trish Mueller, chief marketing officer of Home Depot, which is now starting to embed the AdKeeper button into its banners. AdKeeper, she says, thus becomes "a great customer service."

Time-shifted advertising is raising some other important issues for the industry, including the concept of "expiring" advertising. AdKeeper, for example, includes an "expiration date" on every ad it archives and indexes so that consumers aren't getting the wrong message - or perhaps more important, the wrong offer - at the wrong time. Kurnit says this is especially important in advertising categories that have time-sensitive offers such as price or rate changes, or in categories that have fiduciary or legal requirements to have an end date for offers and messages, such as financial services and pharmaceutical companies.

In other words, consumers don't get to keep ads indefinitely - only as long as an advertiser actually wants them to be exposed to them. This is crucial for a lot of reasons, not just for the obvious ones like the expiration of offers, but because it's an important component of how advertisers and agencies control their campaign messages over time.

AdKeeper has conducted some preliminary research benchmarking how consumers keep ads and how it might change their behavior over time, but declined to release those findings other than to say they are "surprisingly high."

AdKeeper launched its public beta in February, and has added 350 ad campaigns to its system to date. It is not charging anyone during the beta and doesn't plan to ever charge for adding the "keep" button to ads or for storing ads on its servers. Advertisers will only be charged when the public beta ends this summer, and only when consumers actually use it to look at ads they've kept.

Kurnit says AdKeeper is still trying to figure out what those ancillary ad exposures are worth. "It's our intent to start charging in August," he says, adding, "If you think about the numbers in this business, and we are right, and we get a button on every ad on the Internet, this thing just starts printing money."

So far, he has some pretty big supporters in his corner. AOL plans to start running AdKeeper-enabled banners on its pages this quarter. David E. Miller, AOL director of ad product management, says he's eager to see both how many people keep ads and how many of them return to view the ads afterward. "We're very interested in seeing how consumers react to it," he says. Kept ads thus become another metric in the selling proposition.

Home Depot plans to use AdKeeper as a "benchmark tool," Mueller explains. Once Home Depot knows which ads are being kept more, the retailer will better understand consumer engagement, she says, which should "eventually lead to better creative to improve the ads."

Kurnit notes that advertisers will be able to tailor promotions to consumers based on their adkeeping habits. For instance, users might be entered into a "keepstakes" once they've kept an ad - or the entry can be delayed until they've shared an ad or until they've watched a video in the ad and shared the video.

For publishers whose ads prove more "keepable," says Kurnit, "we know when an ad was kept and where it was kept from, so we will see a shift in ad spend."

Thus consumers staying on publishers' pages is an obvious advantage of the new-generation banners, but not the only one. The ads themselves can lead to higher revenues because they've transcended click-through rates into new forms of measurement. As Kurnit says, the "new types of ad units are not meant to be clicked, but engaged [with]."

wit Media's White notes that he bids higher to advertise on sites where his banners get shared more often. "In the end, we need actions out of online advertising, rather than just clicks." Yet many clients still fixate on click-through, so White says he uses Spongecell's ECTR (effective click-through rate), which counts clicks, but not necessarily "click-throughs." The ECTR, he says, includes clicks on all those special in-ad buttons.

Clicks per se are anathema to Moat's Goodhart, whose company has come up with a heat map-based analytics system that tracks engagement on standard (non-rich media) display ads. The heat maps show when users mouse over an ad, even if they don't click on it. "You can see what people are engaging with and what they're not," Goodhart explains. "Do they get the message you're trying to send?"

Moat's analytics provide "an incredible level of detail regarding how users are actually engaging with ads," says Tom Sipple, vice president at IAC/Dictionary.com, which has used the technology to assess a campaign for the Chevy Cruze that ran on dictionary.com. "We were very impressed with the results."

Other Moat analytics clients have included eBay and Blackberry, while Goodhart says Moat has also worked with such clients as Groupon and Blackberry on the creative side through its crowd-sourced "Marketplace." That service is designed to connect brand advertisers with creative talent - primarily designers, usually freelance or with boutique agencies.

"We're trying to define a new metric - to solve brand-engagement problems with display ads," Goodhart says. "Are people noticing your brand or not? What are people actually doing?"

Goodhart says that while a banner may get two to eight clicks per 10,000 impressions, Moat's analytics are showing actual consumer interaction with ads at 10 percent to 25 percent. "People actually are paying attention," he states. "We're just not paying attention to the people."

Ultimately, whether it is platforms like Moat or AdKeeper that enable people to save, search and index ads or ones like Spongecell and Adventive that enable them to share them, the hope is that they will improve the quality of online advertising by proving which ones are most engaging to consumers.

"We need less ads that roll down and annoy people, and more ads that create value," says Adventive founder David Koretz. He notes that ad people build "great experiences" in the offline world, where "ads are as important as the content." One example, he says, would be a full-page ad in GQ magazine becoming "part of the whole experience." But in the online world, creatives have failed to "create" a similar experience.