Tuesday, May 10, 2011

Introducing Clickochet: A (free) Ad trading community

I have a lot of ideas for apps/websites/start-ups. No seriously - I mean a lot. Some of them aren't all that bad either. And some are too - really bad, like "waking up in the morning and thinking 'what the heck were you thinking'"-bad too. I mean really.

Alas, usually even with ones I think are awesome - I typically end up finding some fatal flaw. It could be business model or timing or ... who knows.

There's a lot of factors that make me consider an idea for more than a few minutes much less actually work on it:

1) Is it in my skillset
2) Is it the right scope - too small and its a weekend project, if its too big, am I the right guy to assemble the infrastructure (team, investors, etc) to bring it together.
3) How hard will customer acquisition be?
4) Does it have a viable business model?

There's a lot more subtle questions, but these are some of the bigger disqualifiers.

Once in awhile however I get one that sticks. One that I say "why didn't I think of that !" - and then I say "Oh. I did!". Mailinator was one. And this - this is another.

Last fall my girlfriend started a celebrity news blog. I'm not much into celebrities but she was pretty passionate about it and it was exciting to share her enthusiasm.

As with any new site, she was trying to gain traffic. So to help with that effort, I bought her $100 worth of adwords. I've bought adwords for many different companies and projects, but I was still rather surprised with the results. For $100 I got a 3-day (or so) ad campaign that yielded 100 visitors.

The interesting part was that all this time, she was running Adsense - that is, ads to make money on the site. Now, ask anyone trying to make money with Adsense why they don't "buy" ads to gain traffic and they'll tell you, it's losing proposition. And no wonder - that's the crux of how ad networks make money.

Sure, they sell ads. But for a moment, consider a website that does both - it's both an advertiser and a publisher. In that scenario, ad networks sell you ad impressions for money - and then trade you money for ad impressions. Simply put, there is an exchange rate on ad-impressions to money and just like the kiosk at the airport which changes currency, they take a "cut" in both directions.

And the cut can be pretty big. In the case of my girlfriend's site, I successfully managed to convert $100 into 15cents by changing it into ad-impressions and back again (Actually its even worse because the girlfriend gets to keep the 15cents, but we don't bring that up).

Now my assumption above is for sites that are both advertisers and publishers. Many small sites are publishers, but not so many are advertisers. So my assumption is, well, rather assumptive.

But why aren't they advertisers? They want traffic too right? Advertising is a way to get it right?

The answer is that those sites would do both, but its non-economical to do so. Buying ads to show ads makes no sense. Even just buying ads is a very expensive method of traffic acquisition - but what if ads were really (really) cheap. Then everyone would buy them wouldn't they? I mean, it would be a cheap method of traffic acquisition.

Ad networks (BTW, I don't mean to pick on Google above, I just had been using their service because they are one of the most accessible ad networks for small sites) provide a valuable service. Clearly - the ad industry is highly alive - they are bringing value to lots of people.

But it occurred to me - how do I make an ad system that brings value to smaller sites. The under-served billions of websites where buying ads makes no sense today. How about I make a system where you trade ad-impressions for ad-impressions. That simple. And, instead of making it where you give something and get a lot less back, what if we fliped that. That is, give one ad impression and get a few back?

I call it Clickochet. Like "Click Ricochet" because that's what it is.

So how do you get more back than you put in? Well, consider your normal banner text ad. In reality, its one ad impression on your website, but it contains ads for 3 different websites within. When you show one "ad", three other sites benefit.

Clickochet is built as a community. We connect it closely with social networks that encourage social interaction and membership. A Social Ad Trading Network. This is key - you're not trading money and ads with a big company, but you're trading ads with each other. Other website owners looking for traffic just like you. Of course we strictly filter out porn and malicious sites, but being a good community member becomes an important factor on how much you get out of the system.

So, in a perfect world, you'd give one banner (keep in mind smaller ad creatives have less ads inside) and get 3 ad impressions. But it became quickly apparent, the world isn't perfect. If someone puts your ad at the bottom of their page, I doubt you'd be happy giving them an ad at the top of your page in return. Or what if their ad quality was low? Or conversely, what if their website had a huge click-through profile? In other words, not all ad impressions are created equal.

All these factors matter. So instead converting ad-impressions to real currency, we convert them to virtual currency. An exchange rate exists, but its minimal and its based on a lot of things - much of it tied to people showing good ads. If you show a banner ad, you won't get 3 ad impressions for it, but that isn't a far off guess either. You'll very likely get more out than you put in.

You are the publisher - you show ads on your site and earn credits.

And you are the advertiser - you spend credits and your ads show all across the network.

You can spend your virtual "impression credits" the instant you make them. Or you could bank them and save them for your new site's impending launch 6 months later. Or take your impressions (from a site like Mailinator) and spend them on your friend's site (like my girlfriend's).

This isn't about replacing existing ad networks. There's no need for that. If you're making money running ads - don't stop.

But unlike buying an ad campaign which costs a lot and lasts a few days (which you surely can still do), you simply give up whatever amount of page real estate you want for Clickochet ads and leave them there. And every day, from here on out, all across the network your page views are giving your a multiple of ad impressions on other sites.

To "prime the pump" I'm giving this virtual economy a boost - an "economic stimulus" if you like. I'm injecting all of Mailinator's ad impressions into the economy without taking them back out. Active users (i.e. you must be earning your own credits somewhat) will get lots of free ad impressions. (note: when I say "all" ad impressions, I mean "most" as I plan to advertise Clickochet on the Clickochet network somewhat).

Of course, it's free to sign up. Free to use. We may introduce a premium service at some point, but you can count on being a member of this community staying free.


..Chris said...

Fantastic idea, I wish I could have just one of those ideas and put it together just as you have. When are we going to see Clickochet ads on Mailnator, I'd like to see what they look like.

..Chris said...

Fantastic idea, I wish I could just have one of them and be able to put it together just as you have. When are we going to see Clickochet ads on Mailinator, I'd really like to see what they look like.

http://vakantie2011.org said...

Great idea, thnx.

Vitalie Cherpec said...

Great idea Paul, I've just signed up, inserted the code and submitted my ad for approval. It took me only 5 minutes.

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