Yieldbot Hands Publishers A New Way to Leverage Their First-Party Data

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Scott Portugal Yieldbot

Yieldbot, whose technology looks at a user’s clickstream and search data in order to determine likeliness to buy, is extending its business to give publishers a new way to monetize their first-party data.

To help with this push, it hired Scott Portugal as GM of publisher platforms to assist publishers as they add Yieldbot to their direct sales offerings.

“We are seeing strong interest from top-tier publishers that want to use it themselves,” instead of having Yieldbot bring in brands for them. “Advertisers should be able to buy performance elements of the campaign to complement their first-party sales,” Portugal said.

Yieldbot’s existing business works with a slice of publisher’s inventory that would probably end up on the open exchange and sells it at a better rate. In late September, Portugal will oversee the launch of a platform called ads.ai, a self-serve product that enables a publisher’s ad ops team to manage this process themselves. Ads.ai is designed for publishers that want to sell inventory directly and has two beta clients.

Portugal, who’s worked at IAC, AOL, Tacoda and Traffiq, has seen publishers facing down the same problems: “dealing with ad tags, flat CPMs and systems built for workflow, monetization or analytics, but not all three. A lot of the efficiencies in performance, yield and scale are in the platform, whether it’s the ad exchange, ad network or DSP, but they haven’t made it all the way to the publisher,” Portugal said.

Yieldbot had always planned to give publishers direct control of its technology. When Yieldbot launched as an analytics platform for publishers in 2010, however, publishers weren’t ready to oversee their first-party data themselves.

“Publishers didn’t have the teams that would be able to sell a new and different technology offering, and to sell to people that they’ve never sold to before:” search engine marketers (SEMs), said CEO Jonathan Mendez. “We decided that we will create our own sales force, show them it can be successful.”

So in 2012, the company got into the media game, helping advertisers and publishers buy media by “connecting to search engine marketers and other performance-based advertisers and their budgets,” Portugal said. Those Yieldbot-selected ad placements have resulted in higher fill rates for publishers and CPMs higher than those on the open exchange, ranging from $1 to north of $6 or $7. The mid-tier CPMs have attracted publishers like Meredith, BlogHer and Rodale.

Now, two years later, publishers seeing the results of the Yieldbot-sold campaigns are ready to take the reins back and sell inventory to advertisers themselves.

But it won’t mean abandoning its current model. The existing managed business is also growing fast. Yieldbot grew 700% in the past year and does CPC campaigns with eight of the top 10 SEMs, Mendez said.

Since Yieldbot has mainly worked with SEMs, publishers selling to display-focused buyers will create little overlap. One change will be applying Yieldbot’s keyword-focused technology to display campaigns.

When working with a SEM, Yieldbot takes their keyword list and does “bottom-up” matching, building a campaign from that list. For display advertisers, it may use  a “top-down” approach, starting out running across all keywords and then narrowing down on those with the best performance.

The optimization is done via machine learning. When publishers run campaigns on ads.ai, they will not need to actively manage the campaign, Mendez said. They will be able to glean insights about what pages and keywords perform best for advertisers and share those results.

Yieldbot charges advertisers on a CPC basis, and pays out publishers on a CPM basis. “We average click-through rates of .3 and 1%. If you look at search CTRs, it’s 1%. Display CTRs are between .08 and .1%, so that’s a 300% improvement,” Portugal said.

With the direct-sold model, Yieldbot will enable selling on a CPM basis, in addition to the CPC campaigns familiar to search advertisers. Publishers will pay a service fee to Yieldbot based on the volume of impressions they serve using the technology.

To fund Yieldbot as it extends its business, the company raised $18 million in Series B funding in June.

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