What constitutes an annoying display ad on the web? Is it the use of obtrusively bright colors? Is it a page seemingly designed to cram in as many blinking, spinning, animated GIFs as possible? Is an ad annoying when clicking it generates a pop-up in response? Dancing-baby ads, anyone? As Cannes Lions 2013 gets underway on 16 June in Cannes, France, I find myself wondering about global creative communications versus annoying display ads, and their cost.
At the 60th Anniversary of Cannes Lions and Microsoft Advertising’s 12th year as the Cyber Awards sponsor, Microsoft Advertising is showcasing a refreshed suite of advertising platforms designed to deliver experiences that enrich lives and build brands. But our platforms are nothing without the creativity and intelligence of the industry, which is why I’m so excited about the Cannes Lions.
Nevertheless, going back to annoying ads, I think anybody with even a modest acquaintance with the web can probably remember an ad-induced headache from annoying pop-ups. However, even though the ad-induced headache might be vivid, the typical response to such an ad might turn an old cliché on its head: “I don’t know much about annoying ads, but I know them when I see them.”
That, though, isn’t sufficient for Dan Goldstein and Siddharth Suri of Microsoft Research New York City. They want to know exactly what people mean when complaining about ad annoyances—and what cost web publishers incur when displaying such ads.
That’s the impetus behind the paper The Cost of Annoying Ads, delivered in Rio de Janeiro in mid-May during the 22nd International World Wide Web Conference. The paper, co-authored with Preston McAfee of Google, investigates the annoying-ad phenomenon, noting that web display ads, though a major part of the Internet economy, can, on occasion, draw the ire of innocent web users. And they’re not the only ones.
Web publishers are paid for the number of ad impressions they can deliver. That leads to an interesting shortcoming: Publishers know how much money they make from annoying ads, but they don’t know the price they pay when frustrated users tire of the intrusions and abandon their websites entirely.
But why do annoying display ads even exist? Surely substandard ads turn off users, who might shun the sites where such ads are presented, which hypothetically would mean fewer ad impressions, which would seem to lead to money-hungry sites losing ground in a cutthroat web version of survival of the fittest. Not so fast, says Goldstein, a behavioral economics researcher. The problem, he says, is that the cost of annoying ads has been difficult to quantify—until now.
“Historically, the costs of these ads have been difficult to measure, so it was unclear which camp had a stronger argument. Our experiments allow this type of measurement and give a first indication that the costs can be rather high. For example, if we had been paid a market rate to run these bad ads during our experiment, we would have lost money compared with showing no ads at all.”
Suri, Goldstein, and McAfee conclude their paper by proposing a theoretical model that relates ad quality to publisher market share. Their findings could affect the economics of the Internet ad market.
How so? “In a number of ways,” Suri says. “First, a small group of users could rate a given ad, and then the publisher could charge the advertiser based on how annoying users rate this ad. Second, one could train a machine-learning algorithm with examples of good and bad ads, and then a publisher could run a new ad through the classifier and price the ad based on its predicted negative impact. “Third, one could allow users to close ads—or swap in another ad. Those ads that get closed more often should be priced higher.”
The most important findings from this Microsoft Research study reveal that intrusive and distracting ads are actually losing money for websites that place them—to the tune of around $1 per thousand impressions. This finding confirms Microsoft’s belief that the digital advertising industry should do all we can to move beyond intrusive and distracting ads and create new ads that are engaging, relevant, useful and beautiful to both the consumer and the advertiser. Speaking of the standard all ads should live up to, I look forward to the digital innovations, design and marketing revolutions coming up at Cannes Lions this year. It is also a Microsoft priority to create ads that meet the needs of the consumer first, reflected in everything we do when it comes to Windows 8, Xbox, Skype, MSN, and Outlook.com.