Adknowledge Introduces Auto-Selection Service for Payments, Offers and Banner Ads

Adknowledge is introducing a new way for developers to monetize apps: a cookie that will identify users and serve them the most relevant form of monetization, whether direct payments, offers or banner advertising.

The company is one of the few on Facebook to offer all three services — offers and direct purchase options are in its Super Rewards offer wall, while its banner ad network has been growing separately. Now, for users who buy virtual goods in a game with direct payments, they’ll see few or no offers or banners. If they don’t get any sort of virtual goods in a game, then they’ll see banners. Super Rewards data suggests that 75% of users never go to the offer wall in an app, so if a lot of developers implement this system, more users will probably start seeing banners.

“We’re seeing lots of data and getting lots of feedback indicating that showing all three [monetization options] to a single consumer all the time can often cause more attrition,” Adknowledge chief executive Scott Lynn tells us. His company view direct purchasers, offer takers and banner ad viewers as distinct types of users from each other; many people who take offers don’t buy directly, for example, he says. “So much time is spent in the ad community talking about relevancy, but there’s little talk about frequency or effectiveness.”

Here’s a little more on how the new system works. Most online advertising networks add cookies to users’ browsers to help identify and track their interactions with ads. That is what Adknowledge is doing in this case. It cookies and tracks users on or off Facebook apart from any app. So when a user goes from one app on Facebook to another by a different developer, Adknowledge will still know what monetization service to show them. Because the company is using its own cookie, it can also figure out what to serve users who first hit Super Rewards within another site on the web, then try out a new Facebook app, for example. As with other advertising systems, Adknowledge also needs to track new users for a certain amount of time to be able to predict how likely it is that they will prefer one form of monetization over others in the future.

A bigger issue here is that many users don’t want to be tracked by online advertising companies. For those users, options include turning cookies off in their web browser (which can affect performance on sites like Facebook), or selectively blocking cookies via their browser, or using ad-tracking software to block out advertising cookies. The present reality is that most forms of online advertising rely on cookies. This is an ongoing privacy issue that Congress is looking into more closely. Adknowledge’s approach to cookies is an industry standard that would only be affected by broader legislation.

For the time being, if a lot of developers implement the cookie-tracking feature, then Adknowledge could end up creating a lot more banner ad inventory. The company has carefully integrated the feature in with its advertising system, called BidSystem 3.0. That system includes a few related features tying Super Rewards’ offer wall together with banners and its other services. Developers can run banners in an app, for example, that direct users the apps’ offer wall. Or, developers can choose to hide banners but not the offer wall from new users, only revealing banners in the app once the user has been playing for awhile (and not monetizing the other ways).

The system also allows developers to set aside money they earn for CPI campaigns (or add more money directly). Adknowledge intends to get more developers running cost-per-install (CPI) campaigns in its banner inventory, meaning developers will be able to buy ads for their own apps that appear in other apps. Many developers are already running CPI campaigns, but mostly through Facebook’s own performance ad system or through other third parties like RockYou and LifeStreet.

Interested developers will need to link a Super Rewards offer wall account with Adknowledge’s Cubics ad network — obviously, they’ll need to create either or both accounts if they don’t already have one.

Cookie-related issues aside, the new service is smartly leveraging Adknowledge’s breadth of monetization services to grow its CPI banner ad business on Facebook. If Adknowledge gets a lot of developers implementing this new system, the most significant effect in the ecosystem will be better ways for its developers to make money, and a cheaper way for them to advertise to new users.