StumbleUpon Finds Footing With Ad Upgrade

With a revamped ad platform, StumbleUpon aims to give advertisers something it couldn’t before – guaranteed reach, at speed.

The rollout represents a leap of faith for StumbleUpon – newly funded to the tune of $17 million – since the new ad system includes significant price hikes. But execs are betting enhancements such as priority delivery options, targeting methods, and granular reporting will win over agencies and keep them coming back.

The key change for major advertisers is tiered pricing. New fees of $.10 and $.25 per visitor allow marketers to prioritize delivery of their ads over other advertisers within the categories they’re buying. Ad impressions consist of landing page views – essentially full-page interstitials – since StumbleUpon is not a Web property but a service that strings together interesting content recommended by others.

StumbleUpon acknowledges marketers have been frustrated by a lack of inventory. Until now, all new campaigns were charged a flat rate of $.05 per page impression and placed in a queue for delivery. Despite the company’s estimated 4 million to 5 million active unique users (out of nearly 15 million total registered), the resulting bottleneck has often resulted in volume shortages for large brands.

“Some advertisers couldn’t hit their traffic goals,” said Jeff Eddings, StumbleUpon’s senior product manager and the main force behind the company’s ad revamp.

In addition to the tiered pricing plan, the company has added device-level targeting and granular reporting on gender, location, and time spent. Execs are most proud of a new “virality” reporting feature that discloses average time spent on a landing page and the rate of sharing to other StumbleUpon users – as well as sharing stats for Facebook, Twitter, and e-mail.

The company had considered a full bidding model akin to AdWords, but ultimately decided on something simpler. According to Eddings, “A lot of agencies don’t want to deal with bid optimization.”

ClickZ tested the system, delivering traffic to a recent article about the National Hockey League’s New Jersey Devils. The campaign was created late Monday morning, using the premium price of $.25 per engaged visitor and a daily budget cap of $75. By 6 p.m. it had delivered 137 paid “stumbles” at a cost of $34.25.

San Francisco-based StumbleUpon first introduced its unique ad targeting system in 2006 – touting its ability to deliver actual landing page views – essentially full-page Web ads – 100 percent of the time, as opposed to media placements that may or may not provoke a click. The offering delivers one paid or sponsored Web page for every 20 to 30 organic content results. Users tag, and are tagged with, topical interest categories, which helps the ad targeting process. Some of these are easily monetized (celebrities and autos) — others, not so much (anarchy).

Last week StumbleUpon unveiled a $17 million investment. Contributing to the round were Accel Partners, August Capital, DAG Ventures, and others.