Every month seems to bring a new company bent on cracking the code of mobile advertising. One of these is ThinkNear, which aims to bring elusive scale to hyperlocal ads. In this discussion with AdExchanger, CEO Eli Portnoy talks about the company's value proposition and challenges it has faced.
AdExchanger: What problem is ThinkNear solving?
EP: There are two fundamental problems we're solving. The first is enabling hyperlocal campaigns at scale. The trickiest thing about hyperlocal is that you're essentially filtering yourself out of an audience. To really do hyperlocal campaigns of scale, you need to start off with a very big base of impressions. In that sense we're a universal buying club when we're plugging into a bunch of different inventory sources, and providing advertisers with one access point, to go out and get that inventory.
The second thing that we're doing is, because we work in an RTB environment, we're able to offer all of the advantages to advertisers of using us to buy their media. It's more cost effective. All of the RTB advantages that you would think of in the online display space, also apply in the hyperlocal mobile media space.
Are you leveraging mobile data for display media across digital channels, or are you just using mobile data for mobile display? How do you make those differentiations?
Let me give you the history. We started the company in January 2011, and the first big hypothesis was hyperlocal mobile display is just a huge opportunity for small businesses. The closer someone is to the point of sale, the more likely they are to transact. If we can offer small businesses the opportunity to reach customers who are close by, that'll be a really unique opportunity, especially because no other digital channel can do that.
Think about search and display and social. At the very refined level, you're still talking about entire zip codes, and usually, you're talking about a 10- or 20-mile radius. To give them an opportunity to reach customers who are on-the-go very precisely [is a] really interesting opportunity. We started building a tool for SMB [that] was very data focused and algorithmic and basically looked at a whole bunch of data inputs to understand how busy your merchant was in real time.
And then, based on whether they were busy or not, we would automatically go and buy media for that. We found out that the challenge of executing these hyperlocal campaigns was a much bigger and broader problem than building the front-end tools to make it easy and efficient for SMBs.
So, we switched focus and said, we are going to focus exclusively on those pipes, enabling hyperlocal. Because of these challenges that I mentioned before around the limited nature of the hyperlocal inventory, you need to have a huge inventory pool. So, we hooked into a bunch of different players, which was about providing scale.
The second challenge is that if you want to buy hyperlocal inventory, with the very limited data that comes back in the impression request, you have to actually do it really well and you have to be really smart about it. And so, working in an RTB environment afforded us that opportunity.
We were back in the market now with this tool, this solution that basically gives advertisers scale in hyperlocal. And also, provides the sophisticated buying tools to do it meaningfully and effectively.
It's all mobile display and it's all hyperlocal.
Have you shifted completely from serving SMBs to bigger clients, and when did you make that change?
As soon as we started running campaigns for SMBs we realized there was a deep need in the market for a solution to run hyperlocal campaigns. In July we made the decision to go and build it, and in October it became clear that our focus and energies should exclusively go towards building a solution for agencies. So while we do have SMB clients and and have seen our product work well for them, our focus, resources, and time are spent building a solution that lets agencies run incredibly efficient and cost effective hyper-local campaigns.
Can you talk a little bit about where you're sourcing your mobile ad network inventory?
We want to be the largest access point to hyper-local inventory. We are currently integrated with most of the mobile ad exchanges and have several more that will be going live in the next few weeks.
What is the target market? What is the estimate on the size of that market?
For the first time, you can actually target people on the go on a device to have with them at all times. It's no longer just about driving e‑commerce, it's about driving e‑commerce, it's about driving walk in traffic, it's about driving calls, it's about driving all of the different actions that people actually take during the entire day, not just when they're in front of a computer.
It's no longer about the multi-billion dollar e‑commerce industry. It's about the trillion dollar offline industry. And that's huge, and that's all driven by location.
Do you think geotargeting alone could be a cookie of the future?
My short answer would be yes. Every channel is different in terms of what really drives it. You wouldn't try to apply the same principles of a search campaign into a display campaign. They're fundamentally different. In one you're trying to work off of the intent that's captured and in the other you're basically trying to profile people and understand their characteristics or their behavior to better target them. Mobile is different.
There's a certain comfort level when it comes to cookie based targeting because it's worked really well online and so marketers want to try to replicate that on mobile, but frankly I think the really interesting play for marketers is location. It's not just about geofencing. It's not just about showing ads to people who are within one mile of a Starbucks or a McDonalds. It goes so much further.
You can target people who are in a Walmart or you can target people who are in an airport or airports across the country and you can start thinking about buying audiences that way. It's not just because you're trying to reach travelers, it's because you're trying to reach travelers while they're actually traveling. That's incredibly powerful if you're a hotel company or you're a luggage company or you're anyone who's trying to reach a traveler.
Same thing goes if you're an electronics manufacturer. Why not try to hit them when they're at their home watching TV with a new TV ad? Yes, we can keep trying to recreate that cookie system and likely we'll see some decent results from it on mobile, but if we really want to find that driver, that contextual propeller that takes mobile to that next level, we've got to look beyond cookies. Every time I think about it it comes down to geo. Geo, by the way, I should make the point, is not just about where someone is. If you know where someone is you also know what's happening around them and that's really powerful from a messaging standpoint.
You claim that real time bidding is possible in mobile and not only that, using a real time targeting parameter that locates the user, is possible in an auction environment.
Absolutely. We're doing that every day.
How does the company make money?
The industry is a little bit young for a hyper-local technology solution, so rather than forcing agencies to learn and manage an entire new tool we currently sell them media. We offer scale and highly efficient campaigns driven by location at a highly competitive CPM that makes it easy to outperform campaign goals and still leaves margin for us.
Can you see that model evolving at all? What might be some of the triggers if you move to more of a licensing model, if you will?
I envision a world where everyone sees mobile as being fully driven by location, and when we get to that point I think it starts making a lot of sense to start thinking about what we do as selling technology and letting others use or leverage what we've built to do their mobile buys.
Where are you on funding today? How many people in the company?
We're not fundraising right now. We're just growing the company, growing the business, and really focused on delivering great value to advertisers. There are six of us.
Twelve to 18 months from now, what are some milestones that you would like the company to have accomplished?
We hope whenever anyone thinks about mobile they're thinking about location first and all the different pool campaigns we're running around location that go far and above just the standard geofence like things people are thinking about and doing. We want them to become our customer. We want to be the technology that people use to execute these campaigns.
Do you see an opportunity for yourselves in the showroom prevention space or would it be more on behalf of the online e-commerce retailer and trying to take advantage of those showroom opportunities?
Just to clarify what you mean by showroom, it's basically the idea people are window shopping offline and then buying online?
There's definitely opportunity for ecommerce players to use mobile to pick off window shoppers and convert them to ecommerce shoppers, but I think the same opportunity applies to local retailers. If you know that someone is on a mobile device shopping for a TV why not convert them into an offline shopper or real world shopper and have them an ad that tells them exactly how far away the nearest Best Buy is? I think online that's a little bit harder, but on mobile all of a sudden the local retailers, the real world, can start to have a digital presence.
Just one last thought. Privacy's a really, really important piece of what we do, obviously, because there's location involved. Our COO [David Tannenbaum] is a Yale trained Juris Doctor who spent two years before coming to us heading up privacy at the FCC.
By John Ebbert
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