Contextual Advertising and Enterprise Applications

In a recent blog entry entitled; "My favorite Web 2.0 themes: SOA and business applications as advertising platforms", Dana Garner comments; “I’m listening for the rumblings of how innovative advertising will augment the subscription model for SaaS and mashed-up web services in business use.” I believe the days of enterprises sanctioning the use of sponsored software is well on its way. I say this because we’ve seen it first hand at RatchetSoft. Although our Ratchet-X software is not currently sponsored, we have been asked by a number of service providers to release an advertiser supported version of our desktop integration platform. Why is this? The logic becomes apparent when you ask yourself the following question. How much would I as an advertiser pay to have my services advertised at the exact moment a prospect is performing an act where my services are most applicable? It’s all about context and relevancy to the prospect.

For example, let’s say a credit bureau wants to increase the distribution of its credit reports. While conducting an online campaign based on keywords and advertising networks has value, it requires the user to proactively find the advertisers ad by either conducting a search on purchased keywords or visiting a site in the network that is deemed relevant. Alternatively, the credit bureau could advertise through Ratchet-X and present its offer at that point the prospect is adding a vendor to her/his accounting system. Which scenario is more likely to result in a sale?

Since Ratchet-X understands the context of a transaction in terms of: a) which applications are in use, b) what functions are being performed and c) what data is required to perform those functions, Ratchet-X is in a much better position to sell the service. In other words, the ad is being served at the point of need precisely at the time the prospect needs the service being advertised.

So what’s in it for the prospect? First, if the user is getting the Ratchet-X functionality for free in return for the advertisement, that offers significant value. Second, since we contextually understand what the user needs, the advertiser can offer a broader array of relevant free and/or premium services.

Assuming the economics work for both the advertisers and the underlying delivery channel, the value provided to the prospect is worth the “intrusion”, and a guarantee is made that prospect specific information is used to merely target ads and is not shared with the advertiser, the value proposition for sponsored software in the enterprise becomes more attractive.