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Beyond advertising: Paid by Relevance

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Banner ads, expandables, interactive takeovers, reskins, overlays… our websites and mobile apps are flooded by advertising messages, all hoping to collect a few views and clicks. And cents of course, because how else are we going to keep it all up in the air? Well, turns out there’s another, far less intrusive and beautifully elegant possibility.

But let’s start at the beginning: Meet Luis Von Ahn. He’s the man behind one of the most hated things on the web:  CAPTCHA’s. He’s the very one responsible for all those hours wasted by figuring out obscure, unreadable pieces of text we have to type before we can submit a form. Who would have thought he isn’t the devil after all?

During his inspiring talk at this year’s edition of the ‘The Next Web’ conference, he admitted he really feels bad about wasting all that valuable time. That’s why –and here comes our first clue- he decided to try to reuse that wasted intellectual energy for good. He founded reCaptcha (now acquired by Google), an even so annoying form of Captcha, but this time he included a brilliant twist:  Now, you get two words instead of one. One of the words is a known word the system can use to figure out if you’re a human. The second word however, is taken from books that are being digitized and for which the computer program can’t figure out what is written. When a sufficient number of people give the same characters for the word, it is accepted and added to the digitized book. So you actually help digitizing books by typing in those Captcha’s.

Ok, that’s cute, I hear you say. Good for him.
But how is that going to pay for my app?

duolingoWell let’s take a look at his second (and more commercial) project: DuoLingo. It’s a free app you can download to learn a language. Free as in you don’t pay anything but get the same value competitors sell for hundreds of dollars. And not an advertising banner in sight. So how does he do it?

He actually uses the same reCaptcha-technique: the reuse of intellectual energy. Each of the 12,5 million DuoLingo users (more than the entire US school system!) receive texts to practice on, based upon their individual level. And guess where these texts (partly) come from: from partners like CNN that have to translate tons of pages each day into different languages. Each user gets little pieces of those texts based upon their level. And when enough people translate them in the same way, they get accepted as correct and added to the translated version of the article. And that’s a service cnn is more than willing to pay DuoLingo for.

Of course, the app itself still has to be top-notch also. That’s why they embed lots of marketing techniques like gamification, A/B testing and persuasion design to make sure the users keep coming back.

The result? A free app letting everyone learn a language, driven by a steady revenue stream not depending on advertising, that even doesn’t have to advertise for itself (by comparison: one of it’s biggest competitors, Rosetta, spends $150 million each year on advertising).

Now, let’s start thinking how we can use this idea for our own business. LUON already did something similar with Ello Mobile, donating money to a good cause by starting from something people do either way: making phone calls. Up to the next idea.

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