When Intent And Content Align, Online Ads Suck A Whole Lot Less

During my tenure at Expertcity (creator of GoToMyPC and GoToMeeting), one of my responsibilities was leading our online marketing, a role I retained until our eventual acquisition by Citrix. When we launched GoToMyPC in 2001, the rules of online marketing were still being written. Along with GoToMyPC, companies like Netflix, Classmates and ZoneLabs were learning from each other. Since then, the craft of advertising online has matured from an art to a science.

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This latest wave in this transformation has been enabled by a number of sophisticated technology companies, including: Burstly, Coull, Collider Media, GraphEffect, SteelHouse, RingRevenue, GumGum, and DataPop. I know these particular companies well, as I am an investor in some of them and an ardent fan of the rest.

At Rincon Venture Partners, we have a laser focus on identifying groundbreaking adtech and business productivity SaaS solutions. When we initially invested in DataPop in 2010, we placed a bet on a serially successful team that had grown up together at DoubleClick, Yahoo! and Overture Services. We believed they would create the next generation of search tools, even if none of us could specifically articulate how those innovations would ultimately manifest themselves.

Fast-forward two years - DataPop has not just radically transformed search; its creative optimization platform is now matching all modalities of online ads to consumers’ intent. This automated coupling of intent and content results in uber-relevancy and ultimately enhances marketers’ ROI. For instance, clients that have implemented DataPop’s platform have generated an average increase in sales of over 40% while experiencing an average 15% decrease in the cost of acquiring such sales. These dramatic results arise from DataPop’s ability to automatically build millions of unique ads per day, each of which reads as if it were handcrafted by an experienced copy editor and not a complex algorithm. Results from some of DataPop’s customers are even more impressive than the averages:

• ABetterStay.com saw leads and conversion rates increase 125% and 72%, respectively, while decreasing its cost per lead by 29%

• Bag Borrow Or Steal is leveraging DataPop’s platform to create thousands of unique ads per day, resulting in a significant sales increase, while improving ROAS by 31%

• A leading online merchandiser doubled its conversions at a cost significantly lower per sale as compared to its historical baseline

Not surprisingly, marketers are responding to DataPop’s ability to significantly enhance the ROI of their online campaigns. In just one year since launching its Creative Science platform, DataPop optimizes in excess of $100 million of its clients’ aggregate advertising spend. The company has scaled so quickly because its platform uses vast natural language algorithms to match intent with the appropriate content. This results in ads which consumers are motivated to click on, while freeing marketers to orchestrate strategic campaigns without obsessing on tactical minutia.

Tim Cadogan, chief executive officer at OpenX and a marketing technology veteran, shared the following observation, “Over the past fifteen years, I've seen a number of disruptive innovations in digital advertising technology, including both the creation of paid search and the evolution of the real-time display space. DataPop's new approach to create highly relevant ads at scale is truly innovative and is a major step forward. It's going to be exciting to watch the company's continued rapid progress.”

According to industry veteran Mike Margolin, VP of Interactive Marketing at RPA, whose clients include Honda, Acura and La-Z-Boy: “The insights we glean from (DataPop’s) creative optimization platform help us deliver ads with higher relevance, driving greater ROI for our clients. And since we are fully integrated across all marketing channels, the insights are enabling stronger execution for creative optimization across several ad formats and channels.”

Despite its leadership position, DataPop is not alone in its lucrative pursuit of matching content with intent. For instance, Tumri and Teracent (acquired by Google) are both doing interesting things with respect to matching images with display ad copy. However, their solutions do not appear to be as robust as DataPop’s, since many of their ads only approximate a user’s intent. Another promising company in this space is SteelHouse. It has developed a service akin to DataPop’s, focused primarily on dynamically increasing the relevancy of website content.

Although we are clearly still in the early innings of the Internet marketing game, DataPop, in concert with a number of other innovative adtech startups, is advancing the state of online ads by customizing them to reflect perceived user intent. This results in more effective ads with greater reach, deeper customer engagement and significantly better ROI. Any platform that makes ads suck less is welcomed by both Internet users and online marketers alike.

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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