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Wall Street Journal 12/18/2008

Provocative Queries Win SodaHead Fans

Proportion of Those Who Click Through to the Site From Its Online Ads Tops Industry Average

By Emily Steel

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Read at WSJ.com

Politics, religion and race -- taboo topics in many social circles -- are key ingredients in one company's online-advertising strategy.

SodaHead.com, an online community that lets visitors create and participate in opinion polls, is drawing an audience with an ad strategy that capitalizes on its own freewheeling survey format.

The display ads, which SodaHead places through the Google and Yahoo ad networks -- and which appear on prominent Web sites like the Huffington Post and Daily Kos -- ask a provocative question, often in charged language, with a simple image to match. "Is white guilt over?" asks one ad it says is scheduled to hit the Web this week. The question will be paired with a picture of President-elect Barack Obama.

Typically, only a fraction of a percent of the viewers shown an online ad will click through to the advertiser's destination. But SodaHead ads enjoy click and conversion rates of as much as 10 times the industry average. The conversion rate is the percentage of visitors who click on an ad and take the action the marketer desires, such as registering, or participating in a poll.

Among the ads that generated the highest response this year was one that ran after the Nov. 4 election, which asked, "Did Obama buy the election?"

The ads have been such standout performers that Google invited SodaHead -- whose tag line is "What's bubbling in your head? -- to speak at an advertiser meeting it held recently to highlight some of the most successful campaigns on its network.

SodaHead is doing a good job figuring out what its users are interested in and using that information to attract a wider audience, says Deanna Yick, a Google spokeswoman.

Soon after SodaHead was launched in 2007, it started driving traffic to its site with ads that asked fairly straightforward questions. When former Atlanta Falcons quarterback Michael Vick was arrested on dog-fighting charges, SodaHead whipped up an ad that asked if he should go to jail. The questions grew more provocative -- and achieved a higher response rate -- during this year's presidential election. Ads featured questions such as: "Who is more likely to cheat on their spouse, McCain or Obama?" and "Is Sarah Palin the Messiah for McCain?"

"Brain science it's really not," says Michael Glazer, the former investment banker who is president of SodaHead. "The advantage that we have is we listen to our users. We see what they talk about, and what is getting a lot of traction."

SodaHead.com, was founded by Mr. Glazer and former MySpace executive Jason Feffer, who have been friends since kindergarten. The site has raised $12.7 million in financing, recently completing an $8.4 million round led by Mission Ventures. In addition to its ads, the site attracts visitors through friend referrals, links in search results and partnerships with other sites that use its polling technologies. It drew 1.8 million unique U.S. visitors in November, more than nine times as many as in November 2007, says Web tracker comScore.

Other Web sites have begun to replicate SodaHead's advertising model. During the election, news site Newsmax.com started running ads with questions such as "Is it over for Obama?"

But SodaHead's strategy has stirred debate among bloggers, some of whom have accused it of being a front for Republican ideology and "push polling," or phrasing its questions in a way that skews the responses. That hasn't stopped some of the same bloggers from accepting SodaHead ads. "Do we want to take their advertising money?? Maybe so (never hurts to do Robin-hood kinda stuff...)," wrote a commenter on the site Democratic Underground.

SodaHead says that it isn't partisan and its ads highlight discussions already occurring on its site. "We know we are doing it right when we have the left-wingers saying that we are run by a bunch of right-wing conservatives, and the right-wing conservatives saying we are run by liberal people," Mr. Glazer says. Now that SodaHead has figured out how to attract visitors, it is grappling with the same issue facing larger rivals: how to make money on social networks.

The 22-person company is looking for ways to target ads to its users, based on information they disclose about themselves on its site. That's similar to a model that social-networking sites like MySpace and Facebook are testing. (MySpace is owned by News Corp., which also publishes The Wall Street Journal.)

SodaHead says it plans to unveil a site redesign in coming weeks to place even more emphasis on hot-button issues that stir debate across the Web, and to announce partnerships with large media companies to share their most-discussed content.