Longboard Media Bringing On-Site Display And Custom Programs For The Retail Web Publisher Says Co-Founder Barkow

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Longboard MediaJim Barkow and Scott Engler are co-founders of Longboard Media, a shopping vertical ad network representing shopping, product review and retail publishers.

Barkow spoke to AdExchanger.com about Longboard and its strategy.

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AdExchanger.com: What were the triggers that created Longboard Media?

JB: Sure. I ran publisher development and partnerships for shopping.com for almost four years. My role was to enable other shopping engines with product catalog and price listings.

There was a point at shopping.com (eventually acquired by eBay) when a lot of the publishers that we worked with came to us and said, "Would you guys also do ads for us? Would you also help us go after monetization in other channels?"

At that time, Scott Engler, who ran ad sales, and myself left shopping.com/eBay and co-founded Longboard Media.  Essentially, the company was founded out of publisher demand for a vertical ad network for large shopping engines and large retailers.

So, what would you says is the problem that Longboard Media is solving?

We solve two problems - one for our publishers and then one for advertisers.

For our publishers, we focus on a vertical of sites – namely, large shopping sites - which are product review, price comparison and product content sites.  We bring on‑site monetization with large, relevant branding experiences at premium rates and meaningful return for them. But, we’re also helping with the ad operations, technology, reconciliation -and the entire process for them.

For the advertiser side, we're helping them solve the consumer targeting question. How do you target a consumer in-market through a trusted environment, at mass scale?

So looking at both sides of the equation, we saw a gap in the marketplace and took a lot of our learning from shopping.com and eBay, and decided to grow it into something scalable.

What transitions or trends are you guys seeing in the commerce or e-Commerce business ecosystem today?

First, we're going to be announcing three large retailers, top three retailers in the next quarter that we're going to start doing on‑site monetization with. So we definitely are seeing a large growth in this area.

On top of our direct model, and learning and education for the retailers, we're also seeing other factors play into retailers adoption of on-site monetization. One is that brand spend is continuing to increase, and there is a demand to be closer to consumer at the transaction point.

More large retailers continue to adopt on‑site monetization, largely led by Amazon, which is still the clear winner that every large retailer looks to.  Amazon's growth in this area has been tremendous within the past year, with more units, more advertisers and a larger team. So a lot of large retailers are looking at that, "How can we go ahead and replicate this?"

Thirdly, there's more and more e‑commerce transactions happening for brick‑and‑mortar stores. For example, JCPenney just came recently - for the third or fourth time - saying that their growth in online is continuing to trump catalog sales as well as in‑store sales. Consequently, they're moving resources that way.

You look at every major retailer that we've ever talked to this trend is continuing. So where it used to be three to five percent of sales, it's now looking upwards of 18 to 30 percent. As a result, they're looking at their in‑store development funds, their co‑op funds, their marketing development funds and realizing that they have a larger potential now than they had three years ago to take advantage of those opportunities.

What ad formats do you offer advertisers? Is it standard IAB display ad sizes, for example?

We do a couple of different things. There the consistent demand for standard IAB units, of course. But, we do almost 45 percent of our overall revenue devoted to custom units or programs. Those include sponsorships, promotions, product launches - a lot of custom creative, especially around large retailers.

When you work with large retailers, you're allowed to get a little bit more creative, so sweepstakes promotions, free shipping and more custom products like that.

That's really where you get the three‑way win: users are incented to use a retailer. It's a value‑add for that brand as far as adoption. And then, it’s a value‑add for the retailer, not just in terms of monetization metric, but in terms of [elevating the brand].

Do you have a data strategy?

Yes.  Ad networks just buy data from an exchange or buy data from somebody else. We actually have direct site data that's very recent.

Part of our core fundamentals at Longboard is that we're publisher-centric. Meaning that, we feel that the content, the experience, the usage, all three wrapped together is the most relevant form of brand advertising. And then, just using data is a derivative of that.

So we're seeing ways to actually use that data on our network and then, also, outside of it.

Are you able to tie in offline conversions?

That's one of the next sources that we're looking at. There's a few data partners out that we're looking at to do cookie matching or usage matching. Also, as we work with more brick‑and‑mortar retailers, we're starting to match in their data as well. That's probably the next space for us.

Is the demand‑side platform world relevant to what you're doing?

We think it is a little bit. We’ve focused on brand advertising and noticed that DSPs funnel a lot of direct response, or engagement‑based campaigns. That being said, we have started working with DSPs. And, we are working directly with agencies and advertisers directly.

But, running an ad network through media across our publisher base is not the best use of that inventory. Meaning, there's cannibalization metrics that tend to increase when you can't control the advertiser base or the creative.

So we work with a small number of agencies through a DSP platform. We know what the creative looks like and that they're merely trying to buy their own audience segments across our publisher base. Right now, it's been a very, very small part of our overall fulfillment.

But, if this is an area that agencies are going to start working with, then it's something that we're already set up to integrate with.

So, related to this is the evolving world of retargeting. I'm thinking specifically of companies like Criteo, Fetchback, Dotomi, TellApart, etc. Is this model of interest to you? And, do you see those companies as competitive or potentially partners?

We see them as potentially partners to tell you the truth. We think they serve a very niche market. For example, Criteo and TellApart tend to work with retailers and look at display media as another traffic source in order to retain a user base. We primarily focus on bringing external brand spend or budget to a retailer.

That being said, we do offer re‑targeting campaigns across our network, just not with the cookie based on‑site technology.

The latest revenue figures I saw about Longboard Media was an article in TechCrunch back in November ("$8-9 million in projected 2010 revenue"). Any update to those numbers?

We're on pace for two‑and‑a‑half, three times last year. Our growth has already more than doubled last year. We've had a great Q1.

Industry question –looking ahead, what's going to be the impact of Amazon.com on the commerce world that you're a part of?

That's an interesting question that could span multiple categories such as brand spend and advertising programs. And we're seeing Amazon ramp their efforts. We think, as retailers start to adopt on‑site advertising, they need to also look at Amazon being the largest competitor, and how to compete with them in the near term. And if they haven't adopted on‑site ads programs, how can they ramp up to scale faster -and sooner than later.

We look at some of the things that Amazon is doing across the board and without a doubt retailers take notice in every change that happens on Amazon.

They could make more strategic efforts towards increasing margins. Clearly Amazon's been winning the technology game as well as through fulfillment and usage programs.

Do you see Google playing in this “game?”

I wouldn't doubt it. Google product search is something that we've always looked at as something that would be really fun to work on and we feel it is underutilized. But I wouldn't doubt that they will make a more concerted effort in this area. Google's core product is still search. And Google product search might be a somewhat ignored derivative of that – for now.

I'm curious to see when that's going to happen. I don't think Google will create a pure e‑commerce site. I don't think it will be a private sale or anything even that close. I think it would be more a distributed offer play, meaning, like product search or localized offers or a mobile offering.

Back to Longboard - how do you plan on growing in the next year or two? Do you plan to build your own proprietary technology?

We look at our growth areas, near term. in three different areas.

First off it starts with team. We've grown our team substantially and doubled in the last six months. And we're looking to add another ten to fifteen people by the end of this year at least.

The second thing we look at is the market and growing our retailer program. We want to take advantage of this opportunity and help them scale faster.  We're also working with our existing publisher base and helping to extend them across multiple mediums.

Finally - technology growth. We are looking at, as I mentioned before, the use of our data. We're looking at how we can extend that and create a more proprietary data set and targeting platform on top of our current model. And those are programs that we are actually already started on. As far as when they're going to be finished - it might be the end of this year.

Follow Longboard Media (@LongboardMedia) and AdExchanger.com (@adexchanger) on Twitter.

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