Media6Degrees Looks To Video, Profitability In 2011 Says COO Pancer

media6degreesAd network Media6Degrees announced last week a new round of funding led by Menlo Ventures as the company “will use the new capital to invest in staff and technology to further develop offerings based on the company’s Social Targeting technology.” Read the release.

Media6Degrees COO Andrew Pancer discussed the company’s momentum and plans. Why do you think there is such strong revenue momentum? And, what about profit

AP: From a systems design standpoint, we offer an end-to-end solution that gives us a feedback loop between our algorithms and the actual delivery of the ads using those algorithms. There is a huge piece of the puzzle missing when you are not able to utilize the performance of one to influence the other. The feedback loop is a unique value proposition for Media6Degrees, as most companies build either data sets or advertising platforms, but not both.

We have also kept user privacy as a top priority. Our company was built with privacy in mind, and every iteration of our data science since 2008 has maintained this stance of knowing nothing about the individual. Clients have responded well to this industry-leading approach.

Bottom line, Social Targeting works and consistently outperforms all other forms of targeting by a wide margin.

Finally, one of the main reasons for our success is our team. Our sales and sales support teams are phenomenal, and they are backed by a technology operation that allows them to deliver on the promises we make to clients. That’s why we have a client renewal rate of over 80 percent.

With regard to profitability, due to the growth of the company, we have been investing every penny back into our team and our technology. We run the company against specific investment plans, and plan to be profitable in 2011.

Please share “next steps” with that $17 million. Is it all about building a sales team in the U.S. and globally, for example?

The $17M will be used to invest in our infrastructure, our team and marketing. We process over a billion data points a day. Modeling all of these points to find the best audiences for our advertisers, and then making a decision in milliseconds on what to bid for a cookie, requires significant data processing and ad serving capabilities. We recently launched a new West Coast data center and saw a significant spike in the volume of bids we were able to win due to these improvements.

We are also hiring! We are hiring sales people in all territories, engineers and data scientists.

Our first product that launched in 2008 is an ad network based on driving online transactions. Since then, we have been developing additional products that are in various stages of testing. We will bring them to market in the first half of 2011 and will utilize some of this investment to roll them out.

How is your media buying evolving for your ad network? Do you see direct-to-publisher relationships becoming increasingly important or will ad exchanges be enough?

We do not have any direct-to-publisher relationships. All of our business runs through the bidding platforms. I do anticipate working directly with publishers in 2011, and we have started some of those conversations. We could conceivably build our business entirely on exchange inventory, but we see an opportunity to utilize our technology to help publishers by working directly with them.

Numerous people on our team come from a publishing background, and we understand the challenges publishers face regarding yield, data leakage and channel conflict with networks. We have developed a set of tools to help publishers sell their inventory more effectively. This is one of our new offerings that will go live in 2011. In addition we have been helping publishers increase their overall yield through our current offering. We charge a premium CPM and pay high rates to acquire the best possible inventory for our clients.

As Peter Kafka said in his article about your raise, Media6Degrees is not about leveraging Facebook or Twitter profiles for ad targeting.  But, what is the impact of Facebook and Twitter on your business? How do you see this playing out?

We do not have relationships with Facebook or Twitter, and we do not collect data from either of them. And this has no effect on our business. We do not target “friends,” so the most obvious Facebook data would not actually help us.

We do believe that Facebook could launch a Social Targeting network, and have great success. By doing so, they would help drive the overall Social Targeting category, which would be great for us.

Are you thinking beyond the display channel for Media6Degrees? Where to next after display?

We are always testing new solutions for publishers as well as marketers. Most recently, we announced our new video product, which we expect to grow nicely in 2011. In addition we see potential for Social Targeting wherever there is an opportunity for addressable media. Some of these new initiatives will launch in the first half of 2011. Others are still very experimental. Stay tuned!

By John Ebbert

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