I’ve been a very interested follower of adblocking software over the years, and found the announcement by AdBlock Plus that it will let some “acceptable ads” through, intriguing. Now that this is a full-time pursuit for its creator, Wladimir Palant, not to mention another employee [blog post announcement] they are figuring out ways to make this a sustainable enterprise. Here’s an article about the acceptable ads announcement.

I plan to write in more detail about publishers and the state of ad networks, and will make some reference to this particular situation, but it is not surprising to me at all.

Today Facebook adds over a million users a week, as the poster child of social networking, and companies like Groupon (which claims to be a social product but isn’t really) aim to go public while others like LinkedIn recently have gone public.

The reality is, most of the big successful consumer-oriented “Web” companies out there today are built on foundations of email, and sometimes of encouraging what some might think of as spam. There’s a fine line but let’s look at a few examples:

Facebook, LinkedIn: Both of these companies rely heavily on user-initiated email to other users for customer adoption, perhaps less so than earlier in their lives, but nonetheless, there was no tremendous organic attraction to visit the site based on advertising or great media stories about the companies, it was all about encouraging users to invite their friends. When I was at LinkedIn, I learned that one of our major growth drivers was encouraging a user to upload their address book and making it super-easy to invite new users. The strongest brand we had at LinkedIn, was that of our users — “John Brown is someone I know and if he thinks this service is great, why don’t I try it out?” — and address book uploads and the resultant email sent out turned many one-connection people into multi-friend propagators. It worked great.

Today the existing networks like Facebook, LinkedIn and Twitter with their APIs can perform the same function as the email address transfers, that of pulling user info into an application, but without the email address the system messages in these various services are really not as powerful.

This is obvious in the case of Facebook, which made a major change a few years ago to how aggressively applications could message users. Email went out the window in favor of less aggressive “inbox-style” messages, and app messages were treated as on average far less important than normal friend messages. During the time with its more permissive policies, several companies were able to take advantage and it helped them create big user bases which in turn, had their own gravity to drive other products in their stable – here I speak of course primarily of Zynga. Zynga’s ability to get viral “invite adoption” from users on Facebook was a powerful growth driver.

Groupon too, largely relies on acquiring email addresses to share its daily email updates of deals. According to their S-1, they have over 85 million email addresses today and yet only 15 million people have purchased a deal — so think about an email a day for all of those people and you’ll get an idea of how email drives this and also how they must be sending out a LOT of unanswered, unacted-upon email.

Not that that is bad per se, but anyone who discounts the power of email or argues that email is not still a major driver of user adoption should look at these examples and take heed. With email spam restrictions increasing, email will be more challenged as an adoption vehicle – but it is still the sine qua non of consumer “viral” adoption.

Here’s an ad I saw this morning on an online currency exchange calculator website, and found interesting enough to click on:

I don’t actually live in Palo Alto, but it’s pretty close to where I do live, and I really like lobster, so this seemed interesting to me. Once I clicked on it, it took me to a generic LivingSocial landing page that prompted me to confirm my city, and had prefilled “San Jose” as my location. It also asked for an email address. I provided an email address and was then taken to a page that had NOTHING to do with lobster in either San Jose OR Palo Alto for that matter (for those not from the Bay Area, San Jose is a good 20-30 minutes away from Palo Alto depending on traffic, so it’s not “close”). I saw a bunch of deals for spa’s etc.

I came into the office and went to the same website, hoping to see the ad again. Amazingly, I did. My office is in downtown San Francisco, but for some reason the ad thought I was in Union City (about 30 miles from here in the East Bay). See below:

I clicked through and landed on a landing page that asked me to confirm that I was in San Francisco (well at least the livingsocial website knew where I was this time, kinda). Still eager that perhaps now I would find the lobster I was looking for (at 70% off!!!), I looked through the deals, but alas, nothing. See the screenshot of the page I came to post sharing my email address. Not only did I waste my time visiting this site, but I also gave up potentially valuable information namely my email address expecting a very specific offer to be available. (thumbnail points to the deal page below)

My company works with several data providers, advertisers and creative companies to create ads that are actually localized and deep link to real products. To do it the right way is difficult. This stuff annoys me as a practitioner of online advertising, but more so really as a consumer. This is a total BS, deceptive ad; whether it comes from a Fortune 500 company, a highly regarded upstart, or some affiliate guy running ads out of his basement.

The bigger ad units were supposed to be the savior of display advertising, but I guess you can’t always account for physical placement. Here’s a nice one. Two 300×600 ads side by side below the fold – a marketer’s dream! Here you go IBM (for Lotus product), check out your ads running on InformationWeek.com:

Kickbacks, shmickbacks: The recent Techcrunch story about Publicis agencies being “highly incented” to work with Google products caused a bit of a ruffle – but honestly, why is this such a big deal? If it’s just a more formalized conveyor-belt version of the same “grease the wheels” vendor-agency and agency-client reality the industry (many industries really) has seen in the last 40 years, then its efficiency should be applauded. Plus I’m sure they wouldn’t be doing it unless it’s actually delivering lower costs and better service to the client, and that those can all be quantified specifically (and will be when some clients inevitably ask for it) down to the penny. The market may take its time, but eventually any company working as an agent of another that does not offer the best service possible at the lowest price will lose out to competitors who do. It will be easier for clients to switch agencies than agencies to switch their providers, it seems. The market may just take time but it is inevitable evolution.

*Sigh*

I contact Fox Sports in order to see how we can get AT&T Uverse to add Fox Soccer Plus where all the rugby is shown (yes it is odd that the Soccer Plus channel has Rugby on it, but never mind) and having just visited the Uverse site as a customer, I get an ad encouraging me to sign up for the service. Check out the screenshot here [new window] that I also helpfully will post to the Fox folks.

Thanks Microsoft Advertising. Thanks AT&T – and other vendors who helped make it happen. The danger of putting ads on a website.

This is mostly a coincidence and/or just wasteful targeting – but the main thing that irks me is actually the little AdChoices icon in the ad. This indicates that this ad was “interest-targeted” (the new name for behavioral targeting) but silly me, expecting a page that tells me how it was targeted I get a generic page [new window] that tells me that Microsoft Advertising served it and how I can opt-out. How bout instead you let me delete whatever information that led me to get THIS ad served to me? Not possible.

Deja vu all over again – I’ve always been annoyed by telcos like Comcast and At&t sending me messages encouraging me to sign up for their service when I’m already a customer – and later realized obviously it might be cheaper for them to do that than to send it to only non-customers: but i really thought we could expect better online.

I received the email this morning from the CEO of Rubicon Project, Frank Addante – it looks like Rubicon is “sacrificing” millions of dollars of ad revenues by not competing with its partners. Yay! Thanks Rubicon (oh I kid the kids from the Southland!) -  we’ll see how this storyline develops. [also links into the questions about the future of ad networks we're having on Quora.com] I’m guessing it was pub relationships and some LA-based developers they are mostly buying. Though curious what the “complete platform” is: maybe it’s in the release I haven’t read yet …. Here’s the email:

NEWS ANNOUNCEMENT: the Rubicon Project has acquired the Fox Audience Network (FAN)!

Greetings!

Today we are tremendously excited to announce that the Rubicon Project has acquired the Fox Audience Network (FAN), one of the Web’s most advanced advertising technology platforms, to significantly expand our team in the areas of product and engineering, and continue driving rapid revenue growth for our premium publishers. The acquisition also accelerates the Rubicon Project’s plan to deliver premium Web publishers like you a complete, end-to-end display advertising platform.

In addition to the acquisition news, we’ve achieved profitability significantly ahead of our plan, and raised $18MM in additional funding.

Click here to be directed to the press release with all the details. A couple of points to highlight:

• the Rubicon Project is not, and will not be, an ad network. We chose not to acquire the advertising sales team that FAN built, sacrificing many millions in annual revenue in so doing. Selling directly to the advertisers that your in-house sales team is reaching out to would put us in conflict with you, our customer, and we won’t do that;

• We are targeting a launch of the complete platform for Spring 2011. Stay tuned for more news on this, as well as forthcoming sneak peeks…

We have long believed publishers need a better choice. A choice that gives your business the technology, scale and data advantage it needs to compete in an ever-more complex marketplace. FAN’s technology team and assets combined with our financial position and market share mean the Rubicon Project is better poised than ever to offer you that choice. Which is why we say now, more than ever:

Power to the Publishers!

Frank Addante
CEO & Founder

I’m sure Kaiser Permanente, Ford and Oral-B will be very happy to see their ads showing up all next to each other, having a great time there not only together but also at the very bottom of the page on 50 Cent’s website, Thisis50.com.

Now of course it’s probably not a big deal since there are already two 160×600′s and a 728×90 ad above this one in better view. They’re not actually paying a lot for the ads at the bottom of the page, are they?

Oh did I mention the ads also rotate every 60 seconds? Right now things have changed I’m looking at three Palm Pre Plus ads and another two Oral-B ads (I guess that’s what they mean by showing “3 ads per 24 hours per person”). A small example that illustrates a lot of what is wrong with display advertising — it would be like billboards along the highway if anyone who owned any property could put up as many as they liked.

Ooops by the time I wrote this, I saw ANOTHER two Oral-B ads, a Scion ad, an eBay ad, and a Bestbuy/Windows 7 ad. Thanks Traffic Marketplace, Specific Media and Advertising.com! What a great way to make money and offer incredible consumer value at the same time (not). It’s one thing to ferret out bad sites and fake impressions, but here is a problem that is less about the publisher in my opinion than it is about the ad networks’ incompetence.

And their CPM number seems very high. See release here.

Based on my estimates, I’d guess they came in about 50% on the impressions numbers and about doubled the CPM. But then what do I know?

My guess is around 24.1 billion impressions a day whereas theirs comes in around 12.2 billion a day (or around a trillion in the US for the first quarter). $2.48 as a CPM is high; the true number is quite probably in the $1.00 to $1.50 range. Especially when you look at Facebook – the CPMs there for an ad unit are in the $0.20 range on the higher end and if you look at three ads or max four ads per page, that’s $0.60-$0.80 or so.

Would love other people’s thoughts on this, back of the envelope or not.

Mozilla has a lot of interesting information and statistics about installed plug-ins, and one of my personal favorites to examine is AdBlock Plus by Wladimir Palant. Here is the stats page for it. Looking at a chart over the last 12 months, the number of active installs is fairly stable except for times like Christmas when a lot of people are seemingly not at their computers. Weekly ebbs seem pretty reasonable as well:

Right now there are 10.63 million live installs (of 78 million-odd total), with 3.5 million of those in the US, or 33%, followed by Germany at 2.1mm (19%) and Russia at 1.01mm (10%). France trails a bit further behind with 813k or 8%. The most common OS is Windows but Linux is right up there which clearly also adds to the fact of this being Firefox, to make it a far less mainstream crowd that our Internet Explorer group. It’s geeky.

While these numbers are significant they are not huge (about the size of the 400th biggest US website or so at the 3.5mm mark, if you believe the Quantcast figures) and no immediate looming threat to the advertising market. The Adblock product, on Firefox and with some configuration needed, is simply not a mainstream product. Me wonders though what some of the catalysts would/might be to make this a more mainstream phenomenon.