Trends

 little more than one week ago a press release went out that seemed as though it should have generated more interest than it did. The company behind the release, Snap.com, offers a product unlike any other on the market. They have, or so it appears, combined the best of search – user initiated targeting – along with the best of performance-based online advertising – being able to pay for search results on a CPA. For those that have spent time trying to decode Google’s AdWords program, the thought of paying on a CPA for search traffic would seem incredibly buzz-worthy. For many reasons, that has not been the case, but Snap.com’s product and positioning do bring up an interest topic, that of transparency.

Transparency refers to the level of information available to those not directly owning a particular process. One way to view transparency is interoffice transparency. Think of the office in which you work. Are the financials freely shared, assuming that you are not a public company? If you are a media buyer, besides knowing your own goals, do you know the company’s monthly goals or yearly goals? If you are a manager, do you share the health of the company with those working for it? Some people will naturally gravitate towards wanting to share while others will be more reticent.

The issues surrounding transparency all relate to, as might be expected, how much information one chooses to share. This is especially the case when it comes to what information companies share about themselves and their business practices, and it is along this vain where the Snap.com announcement and model is both appealing and leery. Take for example the topic of funding. Not too long ago Fastclick received funding and chose to disclose the amount of the funding. The same was true for several other companies. AzoogleAds, a perennial favorite in the space, also took in sizeable funding but chose not to disclose the amount they received. Their varying levels of disclosure came down to what level of transparency companies thought best to disclose to accomplish their strategic objectives.

When it comes to market level transparency, the pay per click search engines, Overture most notably, dramatically shifted the amount of information available. For the first time, it became common to know what others and more importantly, one’s competition was paying. Similarly, it became possible for advertisers, publishers, investors, and so on to rank the perceived quality of the engine simply by checking the value of their bids. When it came to ad networks, Fastclick pulled a similar transparency shift by posting for their publishers not only which campaigns ran on their sties but the rates being paid to Fastclick. Prior to their doing so, such information was limited to the affiliate space where transparency in pricing was needed for publishers to determine which ads to run and from whom. Even now, companies such as AzoogleAds and Adteractive will display the payouts on many of their offers, but employ certain transparency techniques such that publishers can feel they know enough about the offer yet competitors cannot guess exactly what their backend profit is. All of which leads to Snap.com and what makes them so different. Any visitor anywhere can go to the Snap.com site and see full transparency into their business. Snap.com makes available to the public more information regarding their performance than some companies have on themselves.

At first glance Snap appears similar to any other search engine, but one query will show how they differ. As opposed to automatically putting sponsored listings on top, they are threaded in with the results based on overall relevance as well as being very clearly identified with bids always showing. The real differences become apparent when viewing the bids. As opposed to only being able to pay per click, advertisers on Snap can pay on any metric such as CPA or as a percentage of sale. What’s more, with a click of a mouse a user can see how many searches have been performed on Snap, what their revenues are, the keywords driving the revenue, along with the advertisers spending the most money and just what the advertiser is spending. Their reports interface better than many of those used by employees and management in our space, and theirs is publicly available.

At some point in time when Snap hits a certain scale, they will most likely begin to close off their system to the outside world. Companies simply don’t like letting other companies know about their activities, which means that in its openness, Snap could be closing themselves off from revenue. While not necessarily a model for all to follow, Snap certainly provides reason for those of us in our space to think about what numbers we want to show and to whom. The trend in performance advertising has been towards greater transparency, but as has been demonstrated, the money tends to be made in the middle – by playing the arbitrage and by taking advantage of the missing gaps. Systems will ultimately become more efficient and perhaps at that time full transparency will be standard…but certainly not for a while.