Victus Spiritus


The Web's Senses are Evolving to Optimize Ad Value

18 Aug 2010

Attention, Duration, Action, Conversion, Location and Taste

Back in the early days of the commercial web, page views and impressions were the type of analytics that drove development and advertising revenue. If a site had a large and growing number of hits, it was considered valuable. Portals that attracted many visitors were king.

But our attention is short lived for static information sources, and so time on page became another highly sought after metric. The real value of a site became the number of views multiplied by time on page. Dynamic content generated by users revealed the ability of social web apps to captivate and maintain visitor attention^. But the engagement metric still shrouds the purchasing capacity and mood of each visitor. Is a particular visitor ready to make a purchasing decision?

Companies like Google identified the enormous value in click through action compared to impressions or time on page. Returning visitors to a high utility site combined with focused interest and click actions unleashed enormous value to business advertising. Entire keyword categories became highly sought after by specific advertisers.

Beyond the click, another measurable decision was added to the metric feature set. Visitors that click only represent a fraction of those that actually buy something or sign up. This last measurable action can be tied directly to the customer acquisition price enabling professionals to optimize their marketing funnel. Network sites which convert new visitors to subscribers or call visitors to a potentially profitable action are much more valuable to advertisers. Amazon keeps tabs on how visitors come to their site and shares a small percentage of revenue with affiliate members.

Enter Space, Time, and Taste

The web has become increasingly aware of the physical world through sensors. The connection of location and psychological purchasing state is now a metric which local businesses can cater to. This channel for customer acquisition creates a new source of income for web development. Smart phones becoming mainstream mobile sensors were a missing key to the location puzzle. Mobile sensors enabled many web services to identify and share our location* to brick and mortar businesses. Advertising to a person less than a block away in a shopping mall is a high value lead. Offering a deal to entice a local active shopper is a potent measurable metric.

Personal preference is a growing trend in crowd clustering companies like Hunch, Facebook, (Disqus?), and other sentiment tracking companies. This is the first strategy I pursued with Victus Media. The IMM (Intelligent Media Manager) distilled social shares to entities of interest. These topics enabled an interest targeted ad, but I had little success pitching the widget to those who were better positioned to use it. Earning visitor attention is the first barrier web startups need to overcome.

Small but Growing Segment

The fraction of folks that are smart phone users who share their location is far from the majority (ballpark < 5%). The growth trends in mobile smart phones and location services point to a future where they are the norm.

Aligning business growth with social and technological change is a risky but profitable endeavor. The cost of not taking advantage of new opportunity is that competitors will gladly do so.

Winning Products don't need a Marketing Budget

The head fake on this entire post: the best services sell themselves. Marketing is baked into well designed tools and entertainment. It's mediocre or unfinished products that are forced to play the marketing game. My goal with every project is to refine it through early marketing feedback until it sells itself as a high valued service. This way ads are part of an R&D budget which pays for a specific audience of relevant beta testers. If you can acquire customers profitably, then by all means, push until the probability of market saturation is inevitable.

^= Centrally located or developed social networks could enable a subscription fee to bypass all ads and personal information sales, but they aren't motivated enough to do so. Presumably because not enough visitors would pay to interact.

*= It's vital that folks understand privacy and always be in full control of the information they share