Y Combinator Challenge #12 – Fix Advertising

For more information about the Y Combinator Challenge, check out this post first 

12. Fix advertising. Advertising could be made much better if it tried to please its audience, instead of treating them like victims who deserve x amount of abuse in return for whatever free site they’re getting. It doesn’t work anyway; audiences learn to tune out boring ads, no matter how loud they shout.

What we have now is basically print and TV advertising translated to the web. The right answer will probably look very different. It might not even seem like advertising, by current standards. So the way to approach this problem is probably to start over from scratch: to think what the goal of advertising is, and ask how to do that using the new ingredients technology gives us. Probably the new answers exist already, in some early form that will only later be recognized as the replacement for traditional advertising.

Bonus points if you can invent new forms of advertising whose effects are measurable, above all in sales.

My Idea – Woot Ads or Judy’s Ads

Let’s mix things up a bit today.  I came up with two ideas for this idea last night and I’ve been debating which one to post.  So instead of picking one, let’s try something new.  I’m going to post both ideas, and then in the comments y’all can vote for your favorite one.  If you choose the idea that gets the most votes within the next 24 hours, you’ll win the grand prize – your name etched into the moon with my giant laser.  What?  Inside joke, nevermind…

OK, I’m gonna start with WootAds.  Hopefully you’ve all basked in the glory of that which is Woot.  If you haven’t, the concept is pretty simple.  Take a single item and sell it for a limited time at a ridiculously low price.  Only one item is available for sale at any given time, and once it sells out it’s gone for good.  Along with being a great opportunity for deals, it is, as the kids say, hella fun.  This is nothing new, of course – just a twist on the old school “loss leader” strategy that brick-and-morters like Best Buy have been using for a while (sell CDs at a loss to bring customers to the store, and then make it up on ridiculously high margins for big ticket items like flat-screen TVs) 

My idea for a new style of ads is based on this same simple premise.  Instead of static text or an image that you would click on to go to a site, the ad would instead feature one heavily-discounted item that is only available for a limited time.  The ads would be fairly simple, consisting of a picture of the item, a one sentence description, and a clock that would count down the number of minutes left until the item would no longer be available at that price.

What are the motivations on both sides for this one?  For consumers, it would elevate a boring old ad into a fun way to potentially find an amazing deal on something they may not have even known they wanted.  For retailers, it would give them a way to offload overstocked items to impulse buyers and to bring new customers into their online stores who already have all intentions of going through the checkout process.  Also, this is extremely easy to measure the ROI – the retailer pays based on the number of featured items that were sold.

The next idea I’m going to call Judy’s Ads.  It’s basically Judy’s Book for ads, and features user reviews of a product directly inline with the ads.  The goal of this approach is to get around the key issue of truth in advertising.  People are much more open to trusting other people’s opinions about a product than a carefully crafted message from the businesses selling the product.  So why not tap into that same basic concept within the ads themselves? 

Here’s how this could work.  Each ad would have two sections – a top section with a simple AdWords style description and link to the product/service, and a bottom section with two options for rating the product, either thumbs up or thumbs down.  After rating the ad, the bottom of the ad would reveal the overall rating of the product by other users, and would provide options to read or post comments. 

Why would this work?  First, this would discourage advertisers who are advertising crappy products or shoddy services, which would lead to better quality services being advertised, which would instill more trust in consumers which would result in higher click-through rates and so on.  Second, because the ads would be interactive, users would pay more attention to them.  Also, since the ads are already using a format that companies have researched and tested (standard AdWords format), they could take advantage of their previous investments and simply repost their same AdWords ads.  Finally, because the users would be encouraged to click and rate the ads they saw on each page, the system would be able to optimize the ads for the most active cross-section of the site’s user base, which is the audience that the ads would ideally be targeting.

All right – which one is it going to be?  WootAds?  Judy’s Ads?  Cast your vote for your favorite idea in the comments below.


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