StumbleUpon Extends Welcome Mat to Brands and Agencies With Paid Discovery

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stumbleADOTAS – The most convenient feature of the Internet browser could be the back button, allowing the surfer to trace all those crumbs that brought him/her to the here and now. But at the end of the line, the forward button rests transparent on the browser toolbar, and that’s where StumbleUpon comes in, says CEO and cofounder Garret Camp: “it’s the forward button that takes you where you haven’t been.”

Since relaunching the site last year, the content discovery engine has morphed into more of a social network with 15 million registered users and “stumbles” — akin to “I’m feeling lucky” on a Google search, but with more data tossed in — increasingly informed by user history and preferences of his/her social graph. Through emphasizing registration (which can be done through Facebook connect), SU has created a more engaged user base — growing by half a million each month — and increased the effectiveness of its personalized recommendations. Now only 3% of the 700 million stumbles a month come from non-registrants.

“We’ve moved from showing ‘hot stuff’ to serving socially relevant content,” says Camp

In effect, SU can also offer better targeting — and meatier analytics — for advertisers through its sponsored content offering. On the heels of a $17 million funding round — with participation from Accel Partners, August Capital, DAG Ventures and more — StumbleUpon has revitalized its ad system from the inside out to appeal to brands and agencies.

Every one in 20 stumbles is a piece of sponsored content, but go ahead and challenge a user to figure out which one it is. Sponsored content must be relevant to both a user’s preferences and current expedition… Or stumbling. The advertising effectively blends into the stream.

Previously, StumbleAds was a one-price-fits-all system — a nickel a stumble — which was particularly handy for publishers looking to drive more traffic. Revamped on the front- and back-ends, the new Paid Discovery ad solution offers a three-tier pricing structure ($0.05, $0.10, $0.25), offering higher priority serving at the higher levels, says Jeff Eddings, who joined StumbleUpon in July as senior product manager and spearheaded the ad system revamp. It’s a invitation for more brand and agency dollars, especially for time-sensitive campaigns.

“There’s no variation in pricing levels, brands know exactly how much they’re going to spend,” Eddings comments. “We don’t want to squeeze every last dime out of our advertisers — we just want to make their lives simpler.”

In addition, the higher pricing levels offer targeting via device for mobile campaigns through the StumbleUpon app. For example, on Android devices advertisers can offer one-click app installs through their paid stumbles.

But the real allure of the upper pricing rung is the advanced analytics, including a site quality score based on 50 metrics. Eddings notes that SU collects data and signals that other networks don’t — it can raise advertiser awareness to time spent on landing pages and pages shared, as well as offer a portrait of engaged consumers.

SU’s algorithm evaluates engagement on a user basis and doesn’t charge for stumbles that are quickly skipped — which the company dubs “I don’t care” stumbles. However, a “thumbs down” from a user is engagement — there’s a lot to be learned from what users didn’t appreciate. Just like in the previous system, approval by audience (“thumbs up”) will lead to free traffic as the page goes viral.

In terms of creative the sky is the limit — Eddings remarks that he was surprised at how a sponsored Flickr album recently sucked him in. In terms of video, advertisers what is going to stimulate audience; stumbles are optimized based on content, not titles alone. However, PaidDiscovery ads must be approved by SU’s human authorities, who hold their “no bad ads” mantra in the highest regard.

“The ultimate zen in marketing is ‘advertising as conversation,'” “Well, we’ve got a platform that comes close…. It’s advertising that’s not annoying.”

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