Description

The New York-based search retargeting firm Magnetic has linked with the giant online video ad network BrightRoll for a video ad retargeting program, the companies have announced. For an explanation of Magnetic's technology and the opportunity for advertisers and publishers, we sat down with CEO Josh Shatkin-Margolis. The company has raised $5.25 million in venture funding.

Transcript

Magnetic's Search Retargeting for Online Video Ads Josh Margolis: I think video advertising is one of the greatest forms of advertising out there in the sense that they can elicit a similar visceral response that you see within a television and ad today. Being able to show a video ad, if you know an Apple TV, Apple iPhone commercial that you see today or seen a BMW ad or a BMW is raising through the streets in New York and have those ads actually targeted to people who are either in purchase mode for a cell phone or in purchase mode for luxury car, I think it’s game changing. What we sell specifically to BrightRoll is what is called Data. In reality, what we’re selling for BrightRoll is the ability to retarget a user based off of their search history. So BrightRoll comes to us and they say “I would like to show an ad to people who previously searched for home loans”. Let’s say they were targeting video ads for experience, you know a credit report company. So what they would do is they come to us and say “I want to target the key words home loans, Carlisle's credit cards, bankruptcy”, anybody that search for those topics are potentially great potential customers of experience product. So they come to us and they provide us with what's called the Retargeting Pixels. We have at full self service system, such what we call a search data market place when they come in and they specify two things. One, is they provide us with their target criteria, meaning who is it they’re looking to reach. Then two, they provide us with one of those retargeting tags, which is enabling us to actually integrate with their system. Once they have booked that segment with us, what happens is when a user goes on the internet and they search on one of the search engines that we partner with for any of those target topics, we cost that retargeting pixel to be served which enables BrightRoll to set a cookie in a space of the BrightRoll ad server. That in a later time, in any form of media, BrightRoll can then serve a targeted ad for that person. So its specifically when a person is on Huffington Post, they can show them a video ad showing them the importance of getting your credit report check before going out and getting to home loan. We’re little bit different than other data companies in the sense that we do two things. Most companies simply sell data, meaning the ability to retarget the users I just described. What we do is we do two things, one is we sell data to ad networks publishers, ad exchange buyers, demand side platforms and then most recently with our announcement today, we also sell data to video ad networks. The way that works is we charge a flat rate and we charge per Pixel Impressions. So every single time, we flag a user as being a member of that target segment they pay a certain amount of money for that particular user. We also sell Data Plus Media, so we work directly with advertisers and agencies. We approached them and we tell them that they have a choice between high quality inventory, meaning premium comes core 250 type sites or a lower quality inventory, meaning the inventory that’s available to random inventory on the ad exchanges which also sells at the lower price point. Basically its different price points, you know typically premium inventory can range around $6.00 CPM, typically lower quality inventories usually around $2.00 to $3.00 CPM. We also see that the cost of data is usually $2.00 to $5.00 per thousand pixels of users. Male: What's the opportunity around CPM levels through this kind of targeting scenario? Josh Margolis: Targeted Impressions is caused about double what untargeted impressions cost. But over all, it has a more positive ROY. The reason why is because your cherry picking the bright impressions rather than showing car insurance, video ads to all people who – on the internet, you’re only showing car insurance video ads, people who’ve searched the car insurance and we’re considering, should I get a guide car insurance, should I get progressive insurance. Now because you’re cherry picking that inventory, you’ll ultimately saving their money by not showing – you know ads to people who are not potentially in purchase mode. Today, you have $20 billion industry the sponsor search ads. The highest converting ads on the internet today are those sponsor search ads. In fact, perhaps the highest converting ads in the world are sponsor search ads. Certain vertical sees as high as 50% conversion rates. One out of two people that are clicking on and ad are able to go or are often buying products within those particular industries. Now if you take search, search has certain short comings. You know search one is expensive. Two, it also has limited creative opportunities. You can only show boring text ads, which is a great degree different from the amazing kind of video ads that you were able to serve today. Now if you combine those two things together, you have the power of the most powerful targeting medium combined with all the creative options in display, it seems to be universally appealing. With this partnership with BrightRoll, you know it enables BrightRoll to serve all the standard video ad types that their serving today in terms of pre-roll, post-roll, in stream ads. In terms of other forms of media, we can serve text ads, we can serve display ads both on premium comes core top 250 sites as well as low quality inventory that’s available through the ad exchanges. Basically, our goal is to bring the power of search data to all forms of online advertising.