One of the least expensive forms of pay-per-click advertising on the internet is StumbleUpon. With prices as low as 5 cents per click, they are able to drive more traffic for the buck than sites like Google or Facebook. What’s more, ads have a chance of picking up “natural” stumbles that are free. In some cases, a good campaign with strong content can get more natural clicks than paid ones.
The challenge is with disclosure. On mobile apps, it declares when a stumbled piece of content is sponsored. On the browser toolbar version, it does not. As pages are served to users who click the “Stumble” button on their browser, advertisers using Paid Discovery have their pages mixed in with the organically-selected pages. There is no indication that the stumbled page was presented because someone paid for it to be there.
On May 30, the FTC will hold a public workshop to get feedback on how to revamp their 12-year-old online advertising disclosure guidelines. Social media and mobile marketing have changed the game from the banner and text ads that the old guidelines focused on and a revamp has been desperately needed for a while.
There is a good chance that StumbleUpon will not be addressed because they are one-off, exceptionally unique case. With other social media sites like Twitter and Facebook or other social news sites like Digg or Reddit, the advertisements are part of the websites themselves. StumbleUpon ads never actually appear on the websites; users rarely visit stumbleupon.com itself. The “ads” are actually the advertisers websites themselves. One does not have to click from a banner or link on StumbleUpon. They are served the page through the browser toolbar or mobile app.
StumbleUpon’s model will not be discussed because they aren’t on the FTC’s radar. You won’t see any ads if you go to their website and they aren’t a household name like other social media sites, but the reality is that StumbleUpon is relatively huge. The user base is extremely passionate and the number of pages served by StumbleUpon competes favorably with other social media sites.
In other words, their model is very likely safe, but should it be? Should they be forced to disclose when a page served is a paid discovery?
To understand just how big they are and how prolific Paid Discovery is, this infographic that they created tells the story nicely.