Core Insights - Duolingo announced the launch of "Duolingo Ads" to enhance control over its advertising business, aiming to provide high-quality advertising resources for advertisers [2] - The company is shifting from a demand-side platform (DSP) model to a direct sales approach to improve ad quality and user experience [5][6] - Early tests with major brands showed promising results, with a 3% increase in ad click-through rates and a 94% completion rate for rewarded video ads [5][10] Advertising Service Transformation and Upgrade - Duolingo has relied on DSP for ad services, with free users making up about 90% of its user base [5] - The traditional ad model led to low-quality ads that did not align with Duolingo's high user experience standards [5] - The company aims to better control ad content and quality through direct sales, allowing for partnerships that match its premium positioning [5][6] Collaboration with Major Brands - Since May, brands like Marriott Bonvoy, Intrepid Travel, Universal Pictures, and Adobe have tested Duolingo Ads, with two-thirds of advertisers opting to renew contracts [5][10] - The new advertising platform has shown significant potential, enhancing brand collaboration and customization [6] AI Application and Creative Advertising - Duolingo's new ad features leverage its humorous and rebellious brand tone, enhancing ad appeal through creative content [7] - Ads will include animated formats featuring Duolingo's virtual characters, acting as "real ambassadors" for brands [10] Future Plans for Duolingo Ads - Although ad revenue accounted for less than 7% of Duolingo's total revenue in 2023, the company sees significant growth potential in its advertising business [10] - Duolingo has 47 million daily active users, indicating a strong foundation for ad revenue growth [10] - Future pricing strategies will include managed services and partnerships, with plans to introduce third-party measurement for user engagement [11] - The company aims to enhance personalized ad content while maintaining user experience, positioning itself as a key player in the advertising industry [11]