Friday, May 27, 2011

Start-Up Watch COD: Magnetic delivers search retargeting to millions and millions

am a huge believer in the potential of search retargeting to drive strong ROI for brands. The model, for those who may be unfamiliar, is that a search retargeting firm serves banner ads to people based upon their recent search history.

Now why, you might ask, would you bother targeting with banners instead of just buying the search results? Well, it’s actually not an “instead,” it’s an “in addition to.” Everyone knows SEM delivers blockbuster results. The problem is that there are not enough instances of searches to satisfy the demand from brands. You can only buy the number of searches consumers organically make. And then only one company gets to be first on the results. And even if you are first, there is by no means a guarantee that people will buy as a direct result of seeing or even clicking on your link.

Search retargeting adds critical touch points to the bottom of the funnel ecosystem, giving brands an opportunity to follow up with consumers are clearly in consideration and buying mode. The banners appear in both contextually linked content and on quality sites where the searchers visit after their telltale searches.

Magnetic was the first company in the space, and collects more than five billion data points monthly through its partnerships with most of the leading search providers. Ergo more data. These partners provide Magnetic with 100% of their search queries, so the company can develop more precise user profiles of consumers.

But there are other distinctions as well. The data they get are mostly from search and e-commerce environments – that’s an important element of their value proposition. According to Magnetic, many search retargeting options are based upon data that come largely from sharing widgets. That’s OK, but the thing is that these widgets tend to appear more in news, blogs, and general edit than in environments where shoppers are actively looking for buying options. Think of it this way –would you rather show banners to someone who searched in a commercial environment, or on CNN?

There are a variety of ways that brands can benefit from Magnetic’s data. First, they can buy inventory direct from the company. Second, Magnetic works with other sellers, providing data to pubs and networks as a means of identifying more likely prospects. Finally, users of exchanges can also leverage the company’s information.

Founded in 2008, the company has amassed a broad range of blue chip customers. It’s an impressive list particularly because many of their customers are highly sophisticated DR marketers.

Through the use of the exchanges, Magnetic can make available inventory on virtually any type of site. For brands with very high levels of concern over brand safety, they can white list a set of sites that fulfill the advertiser’s specs. For example, many of their advertisers insist on inventory ONLY on the Comscore 250.

On the data provider side, sites need not provide data solely to Magnetic – they can continue to sell their data to companies like Yahoo, Google, and Bing. They can simply add Magnetic to their set of paying contracts and make more money. Always a good thing.

As I say, I am a big believer in this space. As a means of driving scale for transactional advertising, search retargeting can and should be a powerful extension of an SEM program. Definitely worth a look!

Thanks to ad:tech for publishing this first.

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