Magnetic Bringing Transparency To Customer Segments In Display By Leveraging Power Of Search Says CEO Shatkin-Margolis

Josh Shatkin-Margolis is CEO of Magnetic, a search retargeting technology company. You touched on it in our interview around your recent funding. What problem is Magnetic looking to solve?

Targeting advertisements to visitors of websites without direct knowledge of user intent is difficult. Many targeting and data companies lack transparency in customer segmentation. To overcome these problems, we need to harness the power of search. Sponsored search ads are the highest converting ads on the internet, perhaps in the world. By using search as the key indicator intent, we provide better performance and transparency.

Why is search retargeting a powerful opportunity?

In addition to sponsored search ads being the highest converting ads on the internet, making them a great indicator for intent, search also sits early in the purchase cycle. Users often search for a product category, consider which product to buy and then purchase. Search re-targeting allows you to reach the user at the most crucial moment when they are picking a specific product or service.

So how does Magnetic approach it?

Magnetic helps advertisers use search data to re-target customers through all online advertising while they are in purchase mode. Advertisers can re-target customers who have searched for a set of keywords. This is very different from re-targeting companies that let you only target those who have searched and then visited your site. By using search data from the search engine itself, we allow advertisers to reach people that are in purchase mode for their product but have likely never visited their site.

Are you using keywords in referrals from organic or paid search? How do you build your datasets?

Magnetic compiles data from search engines and website partners that serve sponsored search ads. Our data comes directly from second tier search engines, toolbars and other sites where users are entering searches.

Please provide a use case. What kind of lift can someone expect from Magnetic’s technology?

For example, a large publisher like MySpace would probably want to increase the CPM they receive when selling inventory. They could do this by offering an advertiser like Verizon Wireless the ability to target their ad to people that previously searched for cell phones.
MySpace would create a re-targeting segment, and then traffic Verizon wireless’ creative at that segment at the higher CPM. MySpace would place the pixel for the re-targeting segment into the Magnetic interface with the target criteria of “cell phones.” Whenever a user searches for the term in Magnetic’s network of data providing sites and then visits MySpace, they will see a Verizon Wireless ad for which we expect to see up to 10X lift in click-through rate.

How important is service to your product? Can clients use your product without assistance?

The marketplace has an easy-to-use, self-serve interface familiar to data buyers. The advanced technology enables easy creation of custom segments in a single step. Additionally, we have context-sensitive links to help documentation throughout the interface, demonstration videos, a full help site with over one hundred help articles with screenshots and a support tracking system and team that make it easy for us to respond to all questions and feedback with either an explanation or engineering change.

Who are your key clients? When will the product be available widely?

We are currently testing the marketplace with advertisers, ad networks, publishers, and ad exchange buyers/DSPs who are running search re-targeted campaigns across a number of industries including automotive, finance, telecom, retail and CPG.

As for availability, we have a limited number of openings available today for the beta version of Magnetic’s marketplace for advertisers and publishers to apply search data to all online advertising. The product will be available widely this spring.

Should we think of Magnetic as bringing search and display together?

We don’t see it as bringing search and display together. We have a wide vision of harnessing the power of search outside the search engine. We want to use search data as the key indicator across any digital campaign on any type of online ad.

How do you manage privacy?

Magnetic leads in user privacy standards by targeting keywords, not users. Magnetic implements the best practices in privacy: human-readable privacy policies, P3P compact privacy policies, W3C policy placement standards and user opt-out.

Where does Magnetic fit with the data exchange models such as BlueKai and eXelate? Could you work with them and visa versa?

Blue Kai and eXelate compile structured data from eCommerce sites, for example the one hundred travel destinations or one hundred automobile models. Magnetic compiles millions of user-entered searches from search engines and website partners that serve sponsored search ads. Magnetic’s advanced algorithms and interfaces extract maximum value
out of search data. We could sell search data on these exchanges if we aggregated it into a finite set of categories. However, we do not because a large amount value and transparency into the keywords is lost when data is aggregated.

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