Chad Little is a successful serial entrepreneur who is considered one of the early, leading forces in the Internet arena with strong capital raising and M&A experience. He founded FetchBack, a pioneer in the world of site retargeting, in May of 2007. FetchBack was quickly recognized as a leader in the space and was acquired by GSI Commerce in 2010. Shortly thereafter, GSI was acquired by eBay in 2011. Now Chad is launching a new company called Adhesive, which will be focused on show-stopping CPC ads that generate exceptional performance.
Tim Nichols: I understand you’re launching “Project Devil” for retailers; for those not familiar with Project Devil, can you help fill us in?
Chad Little: AOL has been working on “Project Devil” for the past few years. The focus of the project has been to redesign publisher web pages by removing some of the clutter, and swapping out the smaller ad units for the larger [IAB] Rising Star formats.
The Rising Star formats are more engaging. The ads have room to integrate widgets or apps that allow users to interact with a map, watch videos, or take a poll. The goal is to drive higher CPMs and improve the online experience for the consumer.
Early reviews are positive. Compared to a standard 300×250 unit, an IAB Rising Star Portrait ad unit is far superior. The ad unit attracts attention two times faster and viewers looked at it four times more often and four times longer. Portrait units attract attention 35 percent faster than competing units, 81 percent more attention, and 95 percent more time in length of fixation. Users that indicated they would recommend the brand or product to friends and family rose 46 percent. ["Eye-Tracking Neuro-Marketing Study Focuses on Dodge, Verizon, and Zappos IAB Portrait Ad Unit Effectiveness," Caroline Campbell.]
TN: I’ve read a lot about how Project Devil has a slow adoption rate and hasn’t met the high expectations. Why do you think that is?
CL: It’s the old chicken/egg issue. Publishers have to redesign their pages to create new space for the new ad units. That means getting rid of a number of small ads. It also takes time to sell these new formats. To date, AOL has been focused on selling these ads to brand advertisers and this makes complete sense. Brand advertisers are also very interested in taking advantage of the additional space for rich media and interactive widgets. The challenge here is the quantity of brand ad campaigns vs. the dollars being spent by direct marketers and retailers. The latter spend more online and they spend it more consistently. They’re not just doing flights when they find inventory that converts. If they find a channel that works, they will keep their campaigns live indefinitely. This is something we feel is needed in order to reach the fill rate necessary for publishers to dedicate inventory to these new formats.
TN: How is your approach different?
CL: Adhesive is not focused on brand dollars. We’re targeting the online retailers and direct marketers. We’ve developed a self-service interface where advertisers can log in, set up a campaign within two minutes, and most importantly bid on a CPC basis. This is where you can get scale. CPC campaigns, driving conversions, will have longevity. We believe the web will continue to implement these new ad units as display hasn’t changed much since it started. Ad units need to become larger, more creative, and the pages they reside on need to look better. Direct response advertisers have led the majority of new innovations on the web and there’s no reason why they shouldn’t be playing a key role in the push for these new formats.
TN: Are you doing the same ad units as Project Devil?
CL: Not initially. Our initial focus is on a version of the Slider where we’ve added an adhesive twist. We’ve slimmed down the slider bar to make it less intrusive. The bar will display dynamic messages and products based on each individual consumer vs. untargeted run-of-network ads. The consumer can simply slide the page over, browse, complete a purchase, and slide right back to where they left off - Slider Demo. This is a great experience for both the advertiser and the publisher. Publishers now have an easier way to get the consumer back to their website after viewing an ad and retain the page views. Publishers are always at odds with ads. They’re necessary but take their viewers away when successful.
The slider ad appeals to publishers who don’t want to change their page layouts. All it takes is adding the code and let the sliding begin. We will be advancing into other ad units as we build a critical mass of advertisers. Our goal is to ensure we have a good fill rate when introducing units like the Portrait or Sidekick.
TN: Aren’t these Slider ads a bit aggressive and off-putting to users? I hear a lot of people like to gripe about them?
CL: Ads like the slider are going to become more standard or normal, but they will have to strike a good balance. The balance is between the size of the ad itself, its relevance, and frequency. If publishers choose to show irrelevant ads at high frequencies, they should expect a lot of user backlash. The Slider ad is always above the fold as it sticks to the bottom of the browser. But unlike the traditional pop-up ad, the slider is less aggressive and more user friendly.
The adhesive Slider ads are behaviorally driven and not irrelevant mortgage ads with dancing aliens. The slider is invisible to most consumers and only appears if the timing is right and if the data shows this is a product that the viewer would be interested in. Keeping the right frequency cap and relevance is the key to the user experience and performance. Sliders are actually similar to the small promos we see on TV at the bottom of the screen. They’re short, entertaining, and they catch the viewer’s eye.
Existing ad units are going to change; it’s a matter of time. They’re too small and this lack of real estate hinders advertisers from providing more utility and entertainment in their ads. As a result, we see pages cluttered with a ton of small ads that fragment dollars advertisers spend.
TN: How do you see these units evolving over the next couple of years?
CL: We envision a market where we will have more premium inventory, such as these ad units, than the more traditional units. The older units will be found in the exchanges and DSPs. In the future, premium formats will hold higher value and eventually push out some of the older ads due to performance or space. Eventually, we will see more of these new ads at which point they will become commoditized. When that happens, we will need to innovate to the next step.
TN: So why do you think your approach will be successful vs. Project Devil?
CL: Project Devil is already successful. I think that press about their lack of success has been more about outside expectations of how long it has taken for AOL to get to this point. This type of change takes time. The more companies that get behind these innovative ad formats, the more success we will all see. We have a bit of an altruistic vision that is in line with AOL’s. We also want to make the web a more beautiful place. My education and background are in design. I believe that a strong vision sparks a passion in people and is crucial to create sustainable performance for any company. I’m passionate about great design and it’s time that the web and the ads that appear on it reach the next level.
TN: When you say “design,” what does that mean to you?
CL: Design is everything. It’s how the user interacts with the ad, how the advertiser sets up their campaigns, what it looks like, and the data that is driving the ad’s relevance. I think most people equate design to just how something looks. It’s much more than that. Part of Apple’s brilliance in design goes well beyond the interface and the OS.
The new ad formats actually put the emphasis far more on the content in the ad vs. the ad container itself. They’re elegant, clean, and simple. They allow the advertiser’s message to be the key focus. I’m sure it can appear a bit humorous to be excited about an online ad’s design, but I am passionate about the impact we can have by applying good design principles to online advertising.
Article was original published by Tim Nichols on October 24th, 2012 at http://www.clickz.com/clickz/column/2219396/chad-little-launches-adhesiveco-focuses-on-premium-cpc-format-ads