MOAT: A Search Engine For Ads, And So Much More
If you work in online advertising, until recently there hasn’t been a very good way to find out which ads are running across the Internet. Search engines like Google index the underlying web pages, and strip out the display ads. But if you work at an ad agency or are a sales guy at an online publisher getting ready for a meeting with a big brand, it helps to know what display ads they are running. You could click the refresh button on a bunch of big sites a few dozen times, or you can go to Moat, which is a search engine for display ads.
But the ad search engine is just eye candy. Moat is working on so much more, including heatmap engagement analytics and a crowdsourced marketplace for display ad designers. The New York City startup is self-funded with $3 million from co-founders Jonah and Noah Goodhart (who are brothers), and Mike Walrath. All three were involved with Right Media, the ad exchange Yahoo bought for $850 million in 2007 (Walrath was the founder and CEO, and the Goodharts were investors).
“Part of the problem with digital advertising,” says Walrath, “is that we think we know what is happening with an ad and what makes it successful. Right now, all you have are clicks and conversions.” Walrath thinks the industry is measuring the wrong things: impressions on one end, and clicks on the other. Big brand advertisers care more about attention. (Walrath has discussed this before on Founder Stories).
Moat has a proxy for attention. It can generate a heat map of where people hover their mouse over an ad, and where they click as well. What you end up with is something like the heatmap shown above for HauteLook. An image of a woman in the ad, while more attractive, turned out to be too distracting, whereas an image of a shoe results in 2.6 times more clicks on the join button. Moat offers these heatmap analytics to brand advertisers, to help them figure out which display ads are the most engaging and to give them tools to fix the ones that are not working.
According to Jonah Goodhart, typical clickthrough rates on display ads are less than 10 out of every 10,000 visitors (or 0.1%), whereas about 500 of every 10,000 people (5%) spend at least half a second hovering their mouse over an ad, and 1,000 out of 10,000 (10%) touch the ad in some fashion without clicking on it. Moat wants to capture all of this data and deliver it to marketers so that they can test different images and wording in their display ads just like they do today with keyword search ads. The answer in display is to just make the ads bigger, instead of changing the elements inside the ad.
The final piece of the puzzle is a crowdsourced marketplace of designers that advertisers can tap to pump out different versions of their display ads. Each designer will be rated and ranked and placed into different categories. The marketplace for display ad designers was actually the initial idea for the company, but the founders realized that they first needed to provide a better way to measure engagement.