AdReady Blog

Why create AdReady?

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We thought we would kick off the inaugural post with the story of how and why we decided to create AdReady.

I joined Classmates in 1999 as employee #6. I had a degree in finance and was a commercial banker, which somehow made me qualified to watch a spreadsheet of marketing information, impressions, clicks, costs, customers, etc. I didn’t know a thing about marketing and certainly not online marketing. I assumed that would be a big disadvantage, but it may have been to my advantage working with a clean slate and no preconceived marketing notions.

As I started looking at the data, it was easy to see we were spending $5 for a customer with one publisher and $3 with another. We decided, of course, to increase our budget with the $3 pub and told the $5 pub that if they wanted us to spend more they needed to drop their price. With that, Classmates’ infamous online marketing prowess was born. From June, 1999 through December, 2004 we spent over $100 million in online marketing and consistently ranked as one of the 10 largest online advertisers in the world.

Along the way, we learned a lot about what works and what doesn’t in search, display, creative, landing pages and much more. For example, using “I” in a banner instead of “You” will improve the performance of the creative by more than 10%. That means we were earning 10% more sales on our website just by making that simple change. That’s why every creative you see from Classmates says “I graduated in…” We were driven by numbers and our return-on-advertising-spend and “I” delivered better than any alternative.

We also spent 95% of our budget on display ads (those banner ads that you see on virtually every website), and only 5% on search. That 5% on search wasn’t for a lack of trying. We tried all sorts of search keywords from every school name to every proper name in the English language. The lesson (which the market is now starting to realize) is that search doesn’t have a lot of scale. It performs well, but it is not going to support an advertiser’s entire marketing budget. It’s the reason Google, Yahoo! and all the other search providers are focusing on, and investing heavily in, display technologies.

If you think of search as the yellow pages of the Internet, display is print, radio and television all rolled into one. And with users spending more and more time online (some spending more time than on television), marketing budgets need to shift accordingly. If you are running ads trying to drive visits to your website on television or on the radio, then you need to be buying banner ads. The price and the response rate will be exponentially better than offline marketing.

At Classmates, we learned how display can work as effectively as search and at a much greater scale–20x times greater to be exact ($95M on display / $5M on search). And at the height of our efforts, for every $1 we spent we made $2 back in 7-days from sales on our website. We were buying everything we could and I am sure you remember those days of the bright yellow Classmates ads. Even Jay Leno joked about them.

Classmates was sold to United Online in late 2004. In the spring of 2005, I headed out on my own to help other advertisers do “what Classmates did.” As a consultant/advertising agency we would create and execute online consumer marketing campaigns in a very manual/traditional way.

A couple of our initial clients were Quicken Loans and RealNetworks. They were already running online campaigns with ads from good designers and agencies, but when we applied a few of our best practices, we achieved huge lifts in performance. Below are two examples of creative and their percentage improvements over the ads that were already running.

We showed that by applying one set of best practices we would see double-digit percentage improvement in the return-on-advertising-spend.

And that is when it struck us: if we could bring these best practices to more advertisers, they too could start tapping into the power of online display advertising. AdReady’s mission is to empower all advertisers, from car dealers to restaurants, to easily and effectively advertise online. We want to make it possible for them to create and run great ads that users will actually want.

Think about a Joe’s Pizza that could buy the homepage ad on Yahoo! at 6pm on a Saturday night and have it shown to potential customers only in their delivery area. That, of course, would be extremely valuable to Joe’s. But also think about how valuable that will be to the hungry Internet user who sees that ad. It’s certainly going to be better than another Classmates or LowerMyBills.com ad.

The biggest challenge to all of this has been the extreme complexity, cost, and lack of scalability of display advertising. To get a banner ad running on any of the top online publishers, an advertiser will typically need to spend a minimum of $10,000 to $20,000 per month, plus thousands of dollars on ad creation that often takes months to finalize. To most advertisers this puts display out of reach.

In the spring of 2006, I joined with two of my former Classmates colleagues, Eric Kolve and Dave Sliwa, to start AdReady and make online display advertising accessible to any business, regardless of the size of its advertising budget. Today, with a fantastic staff and great investors, we are developing new and efficient ways to make online advertising easy and effective for everyone. Putting this control into our client’s hands will help them take the next step into online marketing.

In the coming weeks we will be sharing with you our toolkit of best practices, great new features and services, and useful intelligence that we are gathering about trends and developments in online advertising. Ultimately, we want the AdReady blog to be an essential resource for anyone who wants to better understand and leverage the incredible power of online advertising.

Sincerely,
Aaron Finn
Founder and CEO, AdReady

Posted by Aaron Finn on Jun 26, 2008   |   Tweet This |   Email This