Digital Element Finding Demand For Granular IP Targeting Says Co-Founder Friedman

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Digital ElementRob Friedman is Co-founder and EVP of Digital Element.

AdExchanger.com: Can you layout the basic ways your clients are using Digital Element's IP detection services?

RF: Digital Element's customers use our IP Intelligence solutions in a variety of ways such as improving response and click-through rates through more accurate ad geotargeting; reducing advertiser variance issues by using an industry-standard technology; creating more impactful interactions with site visitors through content localization; creating communities—both online and off—by connecting visitors with similar interests in similar geographic regions; improving online marketing through audience geo-segmentation; offering geo-based content distribution with geographic rights management; and more.

In the online advertising space, the largest ad networks, servers, exchanges, and portals such as DoubleClick, ValueClick, The Rubicon Project, Microsoft Advertising, Facebook, Yahoo, Blue Kai, AOL and many others use our technology to deliver real-time, highly targeted and optimized ad messaging. Armed with Digital Element's industry-standard technology, ads can be geotargeted down to a zip code or town level based solely on a visitor's IP address. Furthermore, companies can target based on other IP Intelligence data factors including company name, domain, connection type, home or business user, and more. In a nutshell, Digital Element's IP intelligence targeting data allows for increased ad relevance, which improves ROI and delivers more revenue for our ad customers.

What trends has Digital Element seen in 2009? Any areas of momentum for the business that you can share?

The biggest trend we're seeing right now is the demand for more granular IP targeting data. When we first introduced IP Intelligence to the advertising and marketing community in 1999, clients rarely requested anything more than country-level targeting. As the years have gone by, advertisers and marketers have demanded increasingly deeper targeting capabilities. Now, quite possibly due to the recent success of mobile targeting using GPS and the rising sophistication of advertisers, our ad network customers are looking to target customers down to the town or zip code level with the highest degree of accuracy in order to present a more hyperlocal and relevant user experience.

To meet these client requests, we leveraged our 10 years of experience in IP targeting and developed NetAcuity Edge™, our newest solution which greatly increases the granularity and precision of targeting based on a user's IP address. By leveraging opt-in participants from our customer and partner base, we are able to deliver zip code-level targeting data that is highly accurate to four or five digits— bypassing the traditional limitations associated with targeting based on IP addresses.

Another trend we have seen is the request for richer demographic data that will allow marketers and advertisers to target based on an individual's propensity to buy. In a partnership with Equifax, Digital Element is leveraging its NetAcuity Edge data along with Equifax's demographic data to link offline behavioral data with online data at a zip level. The solution, called the Consumer Insight Engine, allows marketers to deliver highly targeted and more personalized messages and offerings while maintaining user privacy.

What's your view on ad exchanges? How does Digital Element work with exchanges?

Ad exchanges are all about removing inefficiencies, and Digital Element's NetAcuity IP Intelligence data plays a key role by delivering real-time information so that users can be presented with the most relevant information and messaging. By improving message reach and relevance, users are more likely to engage with online content, which leads to better monetization of site traffic. Also, IP Intelligence data allows ad exchanges to analyze online audiences and impressions in real time, ensuring that each impression is efficiently targeted.

Could you clarify your corporate structure and discuss its synergies?

Digital Element is a business unit of Digital Envoy, part of the Landmark Interactive division of Landmark Media Enterprises. Founded in 1999, Digital Envoy invented and introduced geotargeting to the market as a way to better target online users while at the same time respecting user privacy. In 2005, Digital Envoy created two new business units, Digital Element and Digital Resolve, to address the various needs of different market segments. Digital Element is focused on Digital Envoy's legacy business of providing IP Intelligence data as a tool to increase the reach and relevance of online content. Digital Resolve was created to supply online authentication solutions built on Digital Envoy's IP Intelligence data, thus allowing companies to protect online users from fraud.

In 2007, Landmark purchased Digital Envoy and has been very supportive of the company's continued innovation. This acquisition has given Digital Envoy and its operating units access to almost unlimited resources, allowing each unit to focus on creating new value for clients. For Digital Element, this has allowed us to answer our clients' demands for deeper data reach and granularity with the introduction of our new NetAcuity Edge technology. Furthermore, being part of the Landmark family has helped us to uncover many data synergies through its ownership of several media and emerging technology companies and allowed us to supercharge our business development, sales and marketing efforts.

How is Digital Element's IP services important for social media targeting?

The key to unlocking the value of social media is to understand each member of the online community and to deliver content and ads that resonant with them. By providing social networks with a means to target advertising with precision, we aid in the overall monetization of this medium. Using Digital Element's IP technology, social media companies can effectively deliver highly targeted ads and content without leveraging a user's personal information. Because social networks can deliver highly concentrated audiences, the ability to provide potential advertisers with precision targeting of users gives them the ability to increase revenue and offer more sophisticated services to their members.

How does Digital Element make creative more effective?

One-size-fits-all creative is a thing of the past as users simply ignore advertising that is irrelevant to them as an individual. Digital Element's technology is a key tool in allowing creative to be customized and delivered to specific audiences. By incorporating more relevant creative, ads will deliver better performance and ROI. For example, if you're in Atlanta, why would you want to see a deal on tickets to a Dallas Cowboys game at the Cowboys Stadium in Arlington, Texas—even if they happen to be your favorite team? Now, if the offer was for a Cowboy's game against the Falcons in Atlanta, you might actually click.

Any early results you can share regarding your partnership with Tumri?

Digital Element's IP Intelligence has been incorporated into Tumri's dynamic ad construction and optimization capabilities to enable advertisers to deliver highly targeted display ads to online consumers. Through its proprietary technology platform, Tumri provides integrated brand and performance marketing tools that marry advanced targeting capabilities with a dynamic, interactive presentation layer. This unique approach allows Tumri's customers to seamlessly adjust marketing messages to consumers based on the behavioral, contextual and location information gained through Tumri's ad delivery platform. For example, ads can automatically be deployed with different headlines, products, pricing, images, etc., depending on who is viewing the ad online.

Tumri has found that, on average, the targeted ads served on the Tumri platform have performed 100 percent to 400 percent better than standard ads. Additionally, Tumri has created significant efficiencies for advertisers because targeted variations of ads are generated dynamically versus each variation being created separately.

Who's your target client? Please describe your revenue model.

Truthfully, any company that is interested in improving how it targets online users is on our radar. This ranges from mainstream and vertical ad networks and servers, publishers, social and behavioral networks to search engines, online video advertisers, and emerging technology companies.

We pride ourselves in working with customers of all sizes, from small start-ups to the largest networks and portals online. Our fees scale with the size of our customer deployments, based on overall site or network traffic as well as the data elements that our customers license. Typically, our customers pay a flat, recurring monthly fee, with a one-year commitment that is based on those factors.

From where do you pull your data sets?

All of our data is developed via our patented and proprietary methods. Our traditional NetAcuity data is derived from our "spidering" technology that develops a rich map of Internet connectivity, determining where routers and end-user equipment are located and distilling that down to a workable database for our customers. As there are billions of active IP addresses on the Internet and new IP addresses are allocated, de-allocated and re-allocated constantly, we stay on top of these changes 24x7 so that we can ensure our customers have the most accurate and reliable data available. The expertise that we've gathered through our 10+ years of Internet analysis is unsurpassed and allows us to provide our customers with the best data possible. Our data has been independently verified to be more than 99.99 percent accurate at a country level and 95 percent accurate at a city level worldwide.

Our NetAcuity Edge data takes our granularity one step further. It allows us to marry our infrastructure-based targeting, which works from the "inside out," with user generated, "outside-in" targeting, supplied by our growing Edge partner network. This enables Digital Element to augment its industry-leading IP Intelligence data with the most granular IP targeting data on the market.

How can publishers benefit from Digital Element's services?

Publishers benefit from our services in a number of ways such as delivering highly targeted and relevant content to users in real time, without requiring user interaction. Also, in a push to build brand recognition and loyalty, many publishers are using our technology to connect users with similar interests and within close geographic proximity to create online, local communities. By serving content that is relevant to users where they live, they feel a deeper connection and loyalty to a publisher, resulting in increased frequency on a site and more opportunities for recurring revenue generation.

Also of note, many publishers are realizing the value of their audiences and are bringing ad serving in house, thus allowing them to monetize their own audiences without relying on third-party ad servers.

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