As anyone who has ever filled her gas tank while a marketing pitch runs on the pump's LCD screen or through the island's speaker knows, advertising has reached total saturation. There is no safe place left: Marketers chase our famously fragmented attention spans with whatever vehicle our eyes and ears might settle on, if only for a few moments.
Putting ads on the Web's gas pumps—our browsers, email clients and other desktop tools—is the new frontier. Banners and badges now get served dynamically into the Eudora email client, the Opera browser, and many peer-to-peer file sharing programs. One U.K. company has launched a "branded browser," in which the ad literally takes over the entire browser, replacing toolbars and navigation buttons with its own design.
On one level, content publishers may see this as a threat. Just as adware networks contribute to the promotional clutter of the desktop and compete with in-browser ads from destination sites, these in-application ad programs compete for user mindshare. Of course, until Microsoft starts serving ads into IE and Outlook, there is little need to worry, but publishers should take some cues from these programs and see the model as an opportunity to create ad-supported desktop applications and tools of their own.
From a simple, branded toolbar button on the freeware version of Eudora, a company can see a 3% click-through rate off of an installed base of about 2 million, says William Ganon, VP of Qualcomm Eudora Products. The ads run in the toolbar and as a badge on the side of the client. and the highly targeted clients, like spam-killer software makers, come to him to be featured here. While the $2.50 CPM rate isn't making them rich, it does help underwrite R&D for the next generations of Eudora clients.
The power of in-application promotion is that it grabs the user while deeply focused on a specific task and delivers an ad that is laser targeted. "What really seems to stir the advertiser is the engagement of the user," says Robert Regular, VP of sales and marketing at Cydoor Desktop Media, which serves promotions into over 150 ad-supported applications like Kazaa, Morpheus, and the Opera browser. "Users are not flipping through different pages or screens. That ad is persistent no matter what they do."
For applications like Kazaa, Cydoor also rotates ads in and out while the application is open on the desktop, counting a 30-second exposure as a full ad impression. In-application banner ads usually deliver .5% and .6% CTRs, about double the standard response rate.
Publishers should take heed because big ad money is flowing. "It grew about 40% in the last twelve months," says Regular, and Cydoor serves about 10 billion ad impressions a month to 75 million users just through desktop applications. Brands like NetFlix and Creative Labs use it to target the mass of entertainment lovers with broadband who pull down film and music files via P2P clients.
Content publishers should embrace this model and ask themselves how they can turn repositories of information and online utilities into standalone, sponsored tools. Online content is about utility, completing a task, so if you turn content into a tangible desktop tool, users will keep you and your sponsor's brands in their hearts and minds. On the Web, applications should be seen as a form of content. The most brilliant example of this strategy is WeatherBug (weatherbug.com), the persistent weather-watcher that proved so successful with users and advertisers that bigger rivals Weather.com and AccuWeather.com quickly mimicked it. Advertisers love this model because it gives them a persistent desktop presence and allies their brands with helping users satisfy a task.
For all of the accolades blowhards like me heaped upon WeatherBug years ago, too few publishers took the hint. Where are the standalone mortgage and financial calculators, little currency converters, and recipe finders? Why should users have to open up a browser, find the bookmark, and then drill into the right page on your site to get to these valuable tools when an industrious programmer on your staff could easily turn it into a tool a customer can use online or off? In fact, one of the easiest and most versatile Web development tools that designers already use for online utilities, Macromedia Flash, released a new version called Central, which lets you make Flash apps that work outside of the browser.
And once you have made these tools, sell the hell out of them to the brands that want to be associated with helping customers. In-application advertising lets content providers revisit the sponsorship model in advertising, which unfortunately has always had trouble taking hold online, in part because everyone chased new technologies for serving more and snazzier ads. The sponsorship approach asks us to look backward to what has worked well regardless of the medium. The idea of bolting a sponsor's identity onto a persistent, task-oriented tool is as tried and true as feed companies issuing farmers their annual, branded calendars.