EXCLUSIVE: ‘There Is No Ad’ — StumbleUpon Revamps Ad System

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stumbleADOTAS – Don’t call it a social networking site, CEO and co-founder Garrett Camp says about categorizing StumbleUpon in the social mediascape. He prefers either “social or content discovery” network.

Marc Leibowitz, VP of business development and marketing and a Google AdWords vet, chimes in: “We consider StumbleUpon more complementary to things like LinkedIn, Twitter and Facebook in that people use those mediums to post things as a way of expressing themselves and communicating with others, while Stumble is how they find stuff in the first place.”

If Facebook and Twitter are where the online masses converse, StumbleUpon is where they find the goods to fuel the conversation. Instead of being anchored around the person, the site is buoyed by its content – a prospect that should increasingly intrigue advertisers, especially ones interested in marketing with branded content, to try the revamped StumbleAds system with its in-depth analytics.

With a few hundred thousand stumblers joining the throng every month, StumbleUpon is nearing 10 million registered users, a third of which are highly active. In general, the site receives about 11 million unique visitors a month. The number of stumbles per month exceeds 600 million (an average of 300 per user), and 5% of those are paid inclusions.

The ad system makeover is designed to ease advertisers into the world of paid inclusion by offering them familiar features, ones they’ve grown accustomed to working with AdWords and AdSense. The initial ad system was set quickly in March 2006 — “Right after we started focusing on making money,” Camp quips. It’s served its purpose and driven enough traffic to keep advertisers coming back but the feature set was too basic — there was no CSV export and advertisers could only pay via PayPal.

The revamp is about bringing the system up to par — all the goodies that appealed to marketers are still there while now StumbleAds offers a wealth of colorful analytics and features, as well as an interface that paints a picture of the background mechanics. The graphical analytics offerings are now as souped up as Google’s, giving users the ability to manipulate date ranges and view the effective cost-per stumble.

Advertisers can now manage several campaigns at once and contrast them to determine the most effective on cost-per-view. The new design matches the rest of the site, offers more options on the “create” page and will be integrated with StumbleUpon’s URL shortener Su.pr.

“Something that intrigued me about Stumble was that they built this model around something that doesn’t involve AdSense at all,” Leibowitz notes. “I lived and breathed AdSense for my entire seven years at Google and it’s weird to come across something on the web that’s advertising-based that isn’t based around AdSense.”

The challenge Leibowitz sees for Stumble is similar to the one Google faced in the early day of search ads — educating advertisers on the value of paid inclusion. With Stumble there’s no banner, no text link, no ad unit — nothing intent driven at all. Advertising with the network is about discovery.

“Advertisers have been conditioned by Google and followers that it’s all about the click and optimizing the 10 words you get in your three-line search ad,” Leibowitz says. “But here there is no click.”

“There is no ad,” Camp interjects.

Leibowitz nods. “It’s full-page, full attention content blended seamlessly into the organic stream of content, rated and reviewed like anything else.”

Adjusting advertisers to this notion has required a fair deal of hand holding. While relationships with advertisers have been casual in the past, the Stumble team is now reaching out and giving tips and advice, offering real-world experience with campaigns that have worked well — as well as those abhorred by the community.

“If advertisers invest just a small amount of time in playing with Stumble, they get it and see dramatic results,” Leibowitz says. A starting point: Don’t put in your homepage, but the actual article or blog.

The process is somewhat akin to permission marketing: users can rate any paid inclusion the same as a normal page, Users won’t necessarily know they’re looking at a paid inclusion because the content is something that would eventually be stumbled upon. In essence, advertisers are buying targeted traffic.

“Basically our users are saying it’s okay to send them some targeted places because we’re going to do our best to leverage everything they’ve said in the past about what they like into showing them the best,” Camp said. “It’s a lot more relevant than the advertising you typically see, and even though it doesn’t have any contextual targeting like a search ad, it’s more behavioral than most ad networks.”

Camp cites that he rated many BusinessWeek articles/ads that showed up in his stumbles simply because he found them entertaining — to him they weren’t ads, but additions to his content stream.

The neat part about this? Content that is really good and recommended by large parts of the community will receive a great deal of free traffic. This can be viewed graphically in the analytics, in which a bar chart shows the percentage of paid stumbles versus the free ones. The best content will garner three or four times the paid views, at which point it’s legitimately viral.

A Brief History of Stumbling

StumbleUpon has been providing diversion and resources for web surfers for eight years now. Started by Camp, Geoff Smith, Justin LaFrance and Eric Boyd while Camp was at graduate school in Calgary, the site bloomed in popularity during the time he was working on thesis.

“By the time I graduated, instead of getting a job, I decided to work on Stumble,” Camp says.

In 2006, the Stumblers moved their act to the haven of venture capital, San Francisco, and picked up Angel funding. The company was only independent for 18 months, which saw a growth from 800,000 users to 2.4 million, before being scooped up eBay in May 2007. While Stumble was still independent as a division within eBay, Camp realized the company could grow faster if it was separated.

“The bigger the company, the less flexible you are. If you want to do something quickly you have to ask for permissions, approvals…” Camp said. “A lot of times we wanted to make quick decisions and we felt we were moving too slowly.”

The team wanted to get back that startup energy and be nimble. There were a lot of ideas brewing, but finding the right talent to bring them to life became difficult. Many hotshot engineers are more interested in working for venture-capital-funded startups that have more equity and room to grow. A company that’s been acquired is generally considered passed its growth spurt — and StumbleUpon didn’t feel like they were at that point.

Almost fortuitously, eBay’s upper echelon decided to refocus on its core auction offering, which had nothing to do with Stumble. It didn’t take a lot persuasion to buy back the company.

Over the last 16-18 months, Camp and crew have sought to simplify the site and service on both the consumer and ad-selling sides. The initial big boost for the service in the mid-2000s came from being one of the top-rated browser plug-ins for Firefox. Being the 138th extension (consider that there are more than 10,000 now) was quite good for name recognition and the growth of the company. But the team wanted to refocus on users engaging with the website.

After a site redesign that included a tool for stumbling without logging in and the addition of the URL shortener Su.pr, the web part is now the fastest growing of all Stumble’s products. While 90% to 100% of stumbling in the past was through the toolbar, in the last year that’s down to 60%. A third of stumbles are now from the website or a social networking extension.

While the Stumble team may not consider the site a social network, they have been increasingly adding social networking tools to the site –- among the many clustering technologies used by the site, recommendations from the Stumble engine are partially driven by friends preferences or people with similar tastes as you. On the front-end, users can share pages with friends and encourage them to rate them. Users can also see others who gave kudos to a page and follow their recommendations. After hooking up with Facebook connect, the Stumblers are developing friend import.

The remodeled ad system is the next step in “Phase 4,” as Camp calls it. By drawing more traffic to the website and offering bountiful and straightforward analytics, he aims to boost advertiser revenue. Several large media publishers took part in the beta testing — HuffingtonPost in particular drove a lot of interest in its paid stumbles.

But the ad system can be a resource for content and media makers of all sizes — even independent musicians and photographers. Anyone who is making something new, anyone who has a website and is seeking attention, Camp says, should be able to greatly benefit from the revamped ad system.

Right now the options are very topical and media-focused, he admits. The next steps for the ad system include adding temporal — which will be advantageous for restaurants and physical retailers — and geotargeting options,  which could draw the interest of a lot of political advertisers, especially in an election year.

2 COMMENTS

    • They’re similar, but Ning is more a competitor to Facebook and MySpace while StumbleUpon considers itself complimentary. One could also argue that Stumble has been around longer, but they’ve added more social networking functions in the last year or so, making the Ning comparison somewhat apt.

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