Chitika Offering Local Ad Exchange And Ad Network Models To Marketers Says CEO Kolluri

ChitikaVenkat Kolluri is CEO of Chitika, an advertising technology company. A bit of history first – what pivots has Chitika made in its strategy since it was founded?

VK: There was one major, defining moment in Chitika’s history – that’s when we decided that knowing when NOT to show an ad is the most valuable asset in our inventory.  Since then, we’ve been refining and evolving our understanding of when not to show ads.  We’ve begun incorporating ideas like technographic segmentation to create something of a click oracle that will tell us whether or not someone is likely to take action on an ad.

Chitika just launched a local ad exchange. Why?

As we evolved our prediction technologies, we found one particular area that we saw as a huge opportunity for advertisers, publishers, and users – the intersection of search, mobile, and local.  We found this intersection to have some of the highest intent that we couldn’t serve.  Over 100 million monthly local search mobile impressions, and we needed something special that would make everyone involved happy.  That’s LAX.

How is the local ad exchange different than the search retargeting you offer across your display ad network? What transparency do you offer through the exchange that the network does not have, for example?

Our existing ad network is our bread and butter, but there’s always a way to make key segments convert better.  Since we recognized a key, growing segment that was performing below what we thought its potential was, we devised a way to target that traffic specifically and make it work better.  The exchange model allows us to be more open-ended in this sector.  We set it up this way because it allows us to explore and optimize across a wide variety of models and options.  So our local ad exchange, LAX, is really a part – albeit a different-looking part – of our program.  Both advertisers and publishers can choose how and where ads are shown, with the ability to choose the cost model – pay per click, CPM, pay per call, etc.  Our revenue reports detail which model works best for the individual publisher/advertiser.

Please provide a typical use case of how marketers use Chitika today.

Chitika concentrates on the who, not the where.  We want to help marketers find individuals.  Rather than approaching this like a traditional ad network, where marketers come in and request users on X site who have searched for keyword Y, we offer them users with a known intent.  No matter where they are or what they’re doing, we know intent, and can provide marketers with individual users.

Do you offer search retargeting data – i.e. cookies associated with search keywords input by consumers – to demand-side platforms, ad network and/or data exchanges? Any plans here?

We’re not in the business of directly selling our data.  However, we absolutely will and do collaborate with companies and agencies who want to use our data to make their campaigns that much more effective.  We’re very flexible and creative when it comes to coming up with a solution that, utilizing our unique data set and our experience in utilizing it, makes for a winning partnership

What types of publishers and inventory does Chitika provide access to? Do you worry that Google can steal them away someday?

We don’t worry about that at all.  In fact, most of our publishers also run AdSense – we simply step in and diversify their revenue streams.  We’ve never billed ourselves as an AdSense replacement.  In fact, internally, we have always held to the mathematical belief that Google + Chitika > Google (or Chitika) alone.

In response to the first part of that question, our publisher base is huge and diverse.  We love our publishers, but in terms of inventory, we are working to build an audience bank.  I mentioned earlier that we don’t target the where, but rather the who, and every publisher who comes on board helps us build our audience bank of users.  The users are the most important thing to Chitika, and we’re well on our way to building up one of the biggest audience banks – that is, collection of Internet users – available anywhere on the Web, over 200 million individuals in North America alone.  We know what America is searching for.

Are you seeing the audience buying trend with your clients? Or do they want to know where their ads are going to run?

Absolutely.  Our clients love the fact that we can find an individual with a known, targetable intent, anywhere in our network, and that they don’t have to worry about the brand impact of the sites in our network thanks to our proprietary ad-safe technology.  They love the fact that they’re really grabbing on to the long tail of Internet traffic – and they’ve seen the results of targeting the who and the what (they want) rather than the where.

Do views and view-throughs matter to Chitika and its clients?  Is it possible to run a brand awareness campaign through Chitika?

In a word, no.  We focus on measurable, tangible results.  We work with people who have clear, explicit goals that we can focus on.

How many employees is Chitika today? Are you profitable?

After bootstrapping this company in 2003, we’ve grown past 40 employees and continue climbing.  We’re absolutely profitable – we have been since 2005, and have done so without any VC funding.

What one key trend do you expect to see a year from now that isn’t happening today?

Mlocal: Mobile plus local

Follow Venkat Kolluri (@venkatkolluri), Chitika (@Chitika) and (@adexchanger) on Twitter.

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