TruSignal Grading Client Data For Online Ad Targeting - CEO Meyer And Prez Dowhan Discuss

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TruSignalGordon Meyer is CEO and David Dowhan is President of TruSignal, an online advertising targeting company. TruSignal is a sister company to eBureau, from which it was spun out in January. Read the release.

AdExchanger: When was it that you recognized that eBureau needed to add something that focused on digital media?

GORDON MEYER: It was two to three years ago when it became apparent that we had to position ourselves to apply our skills and capabilities into the digital arena. So, we started incubating what ultimately became TruSignal.

I came out of Fingerhut and direct marketing is in my DNA.  Nevertheless, digital technology and how to move and port data around so that you can use it to target was certainly new to us. And we had to spend a lot of time getting familiar with the ecosystem – the terminology, the players and how data moves from one place to another.

So, what are the triggers, specifically, for eBureau getting into digital?

GORDON MEYER: Well, it's obvious that the market opportunity is there and people are transitioning dollars in a big way from traditional to digital channels. And then we know our skills, which is taking data and turning that into useful targeting tools. We know we have that skill. So it was an obvious opportunity, but what wasn't obvious was how exactly we were going to execute on it.

DAVID DOWHAN: I would also add that our clients pushed us in that direction, too, by saying, "Well, how do you help us solve digital advertising in the display problem? Can you move it further up the funnel, the same technique?"

Regarding the sell side of these data sources, if you will, are they seeing a digital opportunity that you're meeting as well, or is it more about you guys enabling these traditional data sources that don't understand digital, and you're opening their eyes to that side of things?

GORDON MEYER: It's more of the last thing you mentioned. We're using more traditional, third‑party offline data to build our audiences. We've had these data sets for many years, and been using it for different applications so it was just re-purposing that same data. Some of those companies where we source ‑‑ we're a data aggregator. Some of them have a good idea on how to leverage their data online, and some of them don't. We don't get involved in that part of it with them. We leverage the data for multiple purposes and this is just one of them.

DAVID DOWHAN: We don't think about ourselves as reselling or on-boarding anyone's data. We use that as raw materials. And at TruSignal, we're audience‑providers. We actually don't port any raw data online; it's all about finding the signal on the data and then porting specific audiences for specific clients online. A lot of the heavy lifting happens offline. That's the sell-side of the equation.

On the buy side and from a sales perspective, we interact heavily with direct clients and their agencies as well. Typically, the problems that they want us to focus on or that we're being asked to pursue are ones of quality. In my view, much of the innovation in the digital, ad targeting ecosystem has been about finding responders or hand‑raisers in the space. The trend that we're seeing now – and the problem we're trying to solve, quite frankly - is finding higher value prospects early in the process - so high lifetime value and people that are likely to sign up for your service.

Is there a brand awareness opportunity with the kind of data that you guys offer? eBureau might usually be thought of as a bottom‑of‑the‑funnel, lead generation data source.

DAVID DOWHAN: Yes. There's a huge awareness opportunity for brands. But, we're not all things to all people. At TruSignal, we've made a conscious decision to focus on those market verticals where we know our data is valuable and productive. For example, financial services, you generally have different product mixes for different kinds of customer profiles. You have your classic example of platinum cards versus your standard credit card. So our systems and our data have the ability to create a gradation or segmentation across an entire spectrum. If you're going to spend money as a brand on the top of the funnel, it is absolutely critical to focus on the highest‑value prospect early in the process. So the precision of the targeting becomes important.

That's also because from a branding perspective, typically those units are expensive. Pre‑rolled video's running at $10 to $14 CPMs - if you're going to spend that kind of money, you have to focus on the highest‑value prospects early. In an interesting twist, the kind of capability that allows us to lock into the highest‑value prospects at the bottom of the funnel, is extremely powerful at the top of the funnel when the dollars are big.

Can you walk through a typical use case of the best application of your data?

DAVID DOWHAN: Let's take a more complex customer use case where we have someone that's interested in both the top and bottom of the funnel.  So, taking you through a typical engagement with a hypothetical customer, online education, for example - we would start the process by developing a custom audience for them, and that's typically done with an offline process so the school would provide us with a listing of their historical leads, as well as which ones actually end up enrolling. We have leads and enrollment. This can be done with synchronization to a DMP with a pixel, or it can be done with a basic file. What we then do is in an offline process and go through and append data from 40 different sources - a massive data append to every single record. Then, we're just looking for patterns in the data. What is it about the enrollments that make them different from the average Internet population?

Essentially, we're building a predictive model, and the objective there is to find all the factors ‑‑ what are the collection of factors that together predict a high‑value prospect for this school? What we end up with is an audience formula for that particular client which is going to have demographics, past purchase behavior, financial information, geography, hobbies and interests. Since we're not actually data sellers, we don't have a vested interest in selling one data source. We combine all those sources together into a single model, and that's where we find the most predictive power. It's not about one, it’s usually the combination.

With that audience formula, then, we use that audience formula to profile. We have a match pool of about 100 million U.S. adults that we're able to profile every month, and we use that in an anonymous, privacy‑safe fashion. What ends up in a targeting cookie is a single targeting attribute, and it's actually a grayscale, so we go from zero to nine. Nine is the best fit. In other words, this particular user looks like an ideal customer for this university, and zero is the worst fit - and then everywhere in‑between. We essentially score the entire addressable universe with that client's score, and at that point, it's in a targeted cookie. One of our DMPs that we work with is BlueKai where we widely distribute the audience in a privacy‑safe way to just about any media source.

Ultimately, from a branding perspective, the success of a campaign is going to depend upon the quality of the creative itself. With any kind of metric that the brand is tracking ‑‑ the engagement metrics, the brand lift ‑‑ our job is to make sure as many of those impression dollars go in front of the highest‑value and the absolute right people.  From a branding perspective, the objective is about reach and frequency.

From a bottom funnel perspective, typically, the objective measurement there is less about engagement and reach, it's more about acquisitions. So, “How many new customers did I sign up?”  The best outcome, for direct marketing, is a combination of response and high quality

We've found that, for direct marketers in particular, we're essentially the quality filter to people out there for the marketing. The good news is, we're a good complement for a lot of the behavioral strategies that are out there. We're not a substitute. It's a piece of the strategy, in other words. We're not trying to replace what behavioral is doing because behavioral is good for in‑market signals.

What are some of the areas you will invest with TruSignal?

GORDON MEYER: It’s definitely going to be to scale the business primarily through the sales and service aspects of it. Most of the back end, we have invested a lot of money and it's very mature. Doing the modeling and deploying the audiences is pretty baked, and mature. So that isn't going to need much for investment. But certainly, there are lots of customers to go establish relationships with, and a lot to serve, so it's going to be on the people side.

Do you guys think of yourselves as a technology, data, analytics company…?

DAVID DOWHAN: On the Luma slide, we'd probably end up in the data providers box because that's the cleanest definition. But ultimately, to be successful, we have to be data, plus analytics, plus technology. The way we think about it is, from our perspective, the data is the raw materials. The analytics, for us, is all about finding signal in the data, and the processes that we develop to actually mine this vast quantity of third‑party data out there, and find what really matters for the clients. That's becoming an increasingly important problem that we're solving. People are starting to get a little disenchanted with basic demos, or just single‑targeting attributes to define their audience.

It's all three of those together to be successful. If you have any one of those components, you're not going to be successful.

Isn't there a temptation here to get in the media business?

D: We've had discussions about that. The trends that we're seeing in terms of more of the buying becoming programmatic - there's a greater transparency trend in the industry, in terms of pricing. Credibly, I don't know how much longer there is a big arbitrage opportunity on the media side of the business. We're data guys, we live and breath data, and we have made a conscious decision to focus on what we do well. While we do run campaigns, and "buy media" for some of our clients, it is a means to an end. We want to sell custom audiences to folks, and really let someone else be the expert at the media management piece. It's not a focus of our portfolio.

How does TruSignal differentiate within its competitive set?

DAVID DOWHAN: I put data into two major different buckets: behavior versus profile. BlueKai, historically, has been known for more behavioral intent data. They do more than that, but they've been historically known for that. I would say we're complimentary to behavioral and intent data. For the “profile” companies, there are a couple of differences. With profile data, you have raw materials like the atomic data. It's usually just more statements of fact. We don't sell that information at all. It's not what we do.

Then, there are companies who create pre-packaged clusters, and group people into households and these clusters can be a couple hundred thousand each in terms of the size. They're a good, standard, off-the-shelf approach for a general purpose. They're not designed to solve a particular problem but more about dividing people up in the world in a way that's scalable and easy to get at. Our approach is somewhat different in that when we create an audience with a specific goal in mind.

Where do companies like Axciom and Experian fit with TruSignal?

GORDON MEYER: Knowing those companies well from the past, I think the differentiation between us and them is that we have created technology that can develop these custom audiences at scale and quickly. They haven't. The daunting task for competitors who come into this space is that even if they have the same kind of raw materials, they still need to turn it into five hundred custom audience segments, for example, that we build for our customers.

What are you thinking about in the next year or two in terms of milestones you'd like to see for eBureau and TruSignal, in particular, achieve?

GORDON MEYER: Without getting into the specific revenues, our goal is to grow the overall core business of eBureau 50 percent year over year. That's kind of a pattern. With that certainly comes significant profitability - and then just keep scaling up that business, becoming material and significant in the few select markets that we're in.

With TruSignal, it's a different game. That's what's exciting about it. If you think about eBureau, it's a classic ASP delivery model like a traditional bureau where somebody has to connect to us and we have to deliver our products. That is a resistor to doing business. It takes longer to integrate with people and it definitely throttles an eBureau-type model from growing 200 percent year over year. With Trusignal, by having portability to a lot of different folks who can execute campaigns with massive scale and reach, we don't have that kind of friction that contains growth. So we expect TruSignal10x, year over year, or something like that. It's just got a different growth curve to it than eBureau would have.

How is the company funded? Do you live off profitability? Thoughts about going public?

GORDON MEYER: We haven't raised any capital for two and a half years now. We're cash flowing and we are profitable so, at this point, our intent is to just reinvest our cash into the business. There's certainly no intent to go public at this point, but we wouldn't rule it out either. But we're trying to organically grow with our own cash.

David, what do you think about tactical milestones for TruSignal in the next year or two?

DAVID DOWHAN: I'd say there are brand milestones for us, in particular. One of the big goals for this year is to make sure that we're in the consideration set for all the verticals that we plan: financial services, education, telecom and auto.

We've taken a lot of effort to make sure that they see that the audiences are targetable and actionable across not only real-time bidded display, but also many premium publisher sites, video, mobile, et cetera. So continuing to make sure that essentially our audiences are everywhere we want them to be. We don't want to end up being just a point targeting solution, but to be everywhere.  We’ve done a great job penetrating display and video. The big open question is mobile and that's relatively nascent. I would love to figure out how we make a larger proportion of our audiences actionable for mobile.

By John Ebbert

Follow TruSignal (@TruSignal) and AdExchanger (@adexchanger) on Twitter.

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