Michael Ho thinks offline sales goals can be driven online. That’s why his company, Bering Media, which he founded in 2008, is working with Internet service providers to create what Ho believes is an accurate, scalable way to target consumers online, based on geography, CRM data, and custom offline data models.
“We didn't want to reinvent the wheel. Basically we are talking about taking the same targeting you can do through the post office, and bringing it online through our double-blind privacy platform,” says CEO Ho.
AdExchanger spoke to Ho recently about his company.
AdExchanger: What problem are you solving for your target market?
MICHAEL HO: The problem is there isn’t reliable offline targeting data on the Internet. And, agencies and advertisers are starting to question the accuracy and reliability of the underlying data that exists out there today. Internet service providers are in a position to bring transparent data to the industry.
They're the most accurate, scalable data source for online targeting, because they're the physical network operators. ISPs already have the data that can reliably connect the offline world to the online word, because they know the postal address that's associated with every IP address on their network. The interesting thing is if you add the footprints of all the ISPs together, you get a perfect scale, in terms of targeting data online.
So, ISPs are one part of your target market. How are you selling or distributing the data?
Ultimately ISPs are our partners, and agencies and advertisers are the end clients.
There are a number of use cases for this data. We're creating a foundation so that local advertisers can reach consumers who live in a neighborhood around a particular store, for example. Also, people who have local franchises or dealerships spread across the country and want to localize the creative to drive in-store sales.
Every time you engage with a brand, you're engaging locally. Other use cases are agencies and Fortune 1000 companies who want to leverage their own CRM data or their existing offline data models based on zipcode data for, say, high-value customers.
Another customer channel we see is that offline data providers exist in the direct-mail world. They've been doing demographic data and audience segmentation for years, and it's been a reliable source of targeting for advertisers. Why reinvent the wheel? We want to provide a solid foundation to bring those segments to the Internet. In the offline world it's the post office, and in the online world we feel that that's the Internet service providers.
Does this mean Bering Media has a huge sales force, or are you distributing through demand-side partners?
The majority of our business had been through local channel partners that we've been working with to date. A lot of the ISPs have local and regional sales channels or sales forces, so we've been partnering with them. We're now seeing a shift in our business where we're partnering more with media buyers and agencies and offline data providers, who we see as a great buy-side partner or channel for Bering. They allows us to bring our solution, our ISP data, to a larger group of clients and advertisers. In order to make our data optional in the industry, we connect up to data management platforms (DMPs).
Does Bering Media sell media?
We provide a platform for some of our local or regional sales channel partners that allows them to purchase media.
Is it a big part of your business? How do you see it evolving?
Where we're going with our business is about the data and then coupling the two.
Talking about the privacy compliance side to this and “double-blind privacy protection” - what does that mean, and how do you answer the question around protecting PII, given some of the challenges in the past regarding ISP data?
The logic in our technology is the double-blind privacy form, and the fact that we're working with ISPs. What that means is that all the data matching happens securely behind the ISP firewall, so that none of the subscriber information ever leaves the ISP's network. It never has to be disclosed to a third party, and that includes to Bering Media.
We have devices that sit behind the firewall at the ISP’s network. With our technology, we're letting the ISPs act like the phone operator at a hotel. When you call the front desk, and you ask for a friend in the hotel and you're staying in a hotel, the hotel operator will connect you without ever disclosing their room number to you.
Our double-blind works basically on the exact same principles. We're just using geography instead of names.
Can the user easily opt out of Bering Media data?
We provide an interesting persistent opt-out choice. We work with all of our ISP partners to ensure that they provide proper notice and choice to their subscribers, or their customers. Our persistent opt-out, through the ISP's network, ensures that the user’s choice is always maintained, even if you clear your cookies or change your IP address. It's not a cookie-based opt-out. It's a network-based opt-out. Additionally when we work with demand side platforms and ad platforms, we make sure that they are providing notice and choice to their customers as well, so that we're providing a dual ability for customers to be able to opt-out.
In regards to the data sets that come from ISPs and that advertisers can use to target, certainly location appears to be one unique data set. Are there others?
What we're focusing on is the ability to target based on postal address. As I said, we liken it to the offline world -- the post office.
Where the ISPs are differentiated is in three ways: accuracy, scale and transparency. The transparency is that you know exactly where the data comes from. It's not that we're firing pixels on websites or pulling registration data, or inferring the data from an unknown algorithm. It's that we're working from an underlying data source, so that creates transparency. Agencies can be confident in data sets.
And that leads into accuracy, because the ISP is the authority on the location, or the billing address of every IP address on their network. Again advertisers can be confident in the data that they're using, so that when they're layering on census data, or offline data models, they're laying it on top of a validated data source.
The third thing is scale. It's interesting that if you add all of the footprints to all of the ISP addresses together, you have “perfect scale” on the Internet. You can reach any audience, or segmentation on the Internet. That increases reach and frequency for advertisers.
What's the revenue model for ISPs? How does that work?
We charge advertisers for the data - typically on a CPM or revenue-share basis similar to other data providers. And then we revenue-share that data back with our ISP person.
Is Bering Media self-funded, or do you have plans around funding in the future?
We're venture backed and we're just about to go for a new round of financing.
What milestone would you like to achieve in the next 12 to 18 months?
We want to make sure that ISP targeting is readily available throughout the ecosystem – I’d say that's number one. Number two, we want to fill in the rest of our coverage map and continue to work with additional Internet service providers and grow our coverage map so we can bring the most scalable solution to advertisers. Three, we're in the process of launching our mobile solution. We want to launch it, and then focus on expanding into new product areas, like audience verification and closed-loop attribution, where ISPs can also improve accuracy and scale.
Fourth, on a personal level I'd like to say that we've successfully taken the first steps of fundamentally changing the ISP's business models for the better. Something that we often forget is that it costs billions of dollars to maintain and build these next-generation networks. As consumers, we really do want the ISP to add value to the ecosystem, so we can continue to enjoy all the Internet has to offer.
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