Let’s face it: Display ads are lame. Eye-tracking analysis suggests that most people ignore them. Consumers find them significantly less trustworthy than search ads, and it even seems doubtful that clicks are a good measure of their success.
Despite this, display advertising was responsible for around $4.41 billion of the approximately $21.1 billion spent on online advertising last year. Improved targeting methods might make display ads more useful for brands and publishers, but there aren’t many companies actually deploying those methods to improve the web for everyone else. Enter Avanoo and Spongecell, two start-ups whose display advertising products can actually be useful. Avanoo’s simple ads raise money for charity. Spongecell’s fancier, more functional banners for events make it easy to add these events to your calendar or Facebook, let you download coupons and invite friends.
When we first wrote about Avanoo last year, the company was focused on becoming a “community wisdom” bank, a destination site that polled its visitors on a range of issues and tried to get them to provide their demographic information. This concept did not get off the ground and so the two founders settled on a new one: Display ads for charity.
Each of the ads, which at this stage appear quite rudimentary, is a promotion for a non-profit, and each click on them will, in theory, be sponsored by a company or brand. Clicking on an Avanoo ad takes you to a simple page with information about both the charity and the sponsor and nets Avanoo a small transaction fee. Avanoo’s concept is somewhat similar to The Hunger Site, which invites you to visit it every day and click on a banner, but Avanoo is going with distribution over destination, which seems more likely to produce results.
Avanoo could be easy to dismiss as a pleasant but unlikely idea, but its list of advisors, which include an executive vice president of ABC, a member of the Bronfman family and an early investor in Skype, makes it harder to write off.
Spongecell’s goals are less charitable but nonetheless useful. The company started off with an event-planning service that tried to compete with Evite, but has repurposed its technology to turn display ads into mini-event planning widgets. A Spongecell banner lets you add the advertised event to your preferred calendar application or to Facebook, invite your friends or navigate to a page to buy tickets. Part application and part advertisement, these banners actually serve a purpose beyond forcing a brand or product into your consciousness.
Spongecell’s approach to functional advertising shares some elements with Mixercast, which creates interactive multimedia widgets for brands.
Both of these companies, however, face the problem of oblivious consumers. Most people are so weary of display advertising that a clever twist could easily go unnoticed. Avanoo has the advantage of a novel and appealing concept (your click can help the world!), but its presentation has a long way to go. Spongecell’s banners are, well, still banners, even if they are potentially useful. Adding steps into the process of clicking on an ad probably won’t help, either.
Avanoo is based in Palo Alto and Spongecell is in San Francisco. Spongecell raised a $2.25M in 2006, before it changed its model to advertising.
[Update: The original post said that Spongecell had deals in place in BMW and Jay-Z. These deals are actually not yet closed. It also said that Spongecell had yet to raise venture capital. In fact, it had raised a round from Halo Venture Partners, the Interpublic Group of Companies and The Pilot Group in 2006]