ChoiceStream CEO Johnson Says New Platform Targets Agencies And Brands With Data As Differentiator

ChoiceStreamSteve Johnson is CEO of ChoiceStream, a personalized marketing and advertising solutions provider.

Yesterday, the company announced its custom audience targeting platform, CRUNCH. Read the release. Johnson discussed the announcement and his company. Can you talk a little bit about ChoiceStream’s beginnings and how it has evolved? And – where did the name come from?

SJ: I created ChoiceStream 10 years ago when I realized that the volume of accessible content would quickly frustrate consumers if there were no intelligent way to help find what was relevant to them.   We started working with major media brands to present relevant TV show and movie recommendations to consumers based on what they were watching, rating and purchasing.  ChoiceStream’s ability to predict future intent based on actual behavior has transformed how people watch TV on the U-Verse and DISH services;  how they purchase apparel, books, and electronics at Zappos, Borders and Tesco; and how they discover upcoming concerts and events at Ticketmaster/LiveNation.

The name ChoiceStream came from the term ‘clickstream,’ but recognizes that a ‘click’ is only one kind of choice a consumer makes.  Buying a product, sharing a video, or using an iPhone app, for example, are other kinds of choices a consumer makes.  ChoiceStream learns from them all.

What problem is ChoiceStream solving today?

Today, consumers interact with their favorite brands (meaning brands in the broadest sense:  stores, services, or manufacturers) a number of ways.  Let’s use as an example, shoe shopping.  A consumer may check out the season’s latest sneakers online, try a pair on in the store, share a link or photo with friends using mobile device, they might even ‘friend’ their favorite shoe brand on Facebook.  Consumers have an expectation that brands can keep track, and keep up, with all these expressions of interest but the truth is that it’s very difficult and most brands cannot.

ChoiceStream’s core personalized recommendations business helps brands capture all of a consumer’s interactions and harness them into one living profile that helps the brand personalize the experience every time that consumer engages with the brand, in any media, whether online, direct mail, mobile, or TV.  Our new CRUNCH business solves a similar problem for advertisers:  just as our technology helps assure consumers of the most relevant experience, CRUNCH helps assure brands of advertising to the most appropriate  audience.

Why launch the new ad platform?

We’ve learned from the high conversion rates of our recommendation business that brands would have much more success if they did a better job of finding prospects higher up the funnel.  Bringing well-qualified traffic – what CRUNCH thinks of as the advertiser’s most relevant audience – to the top of the funnel helps ensure high conversion rates at each successive marketing step, all the way to capturing the loyal, repeat-purchase customer. We think ChoiceStream is better suited than anyone to find an advertiser’s most relevant audience:  we have the highest quality data, but more importantly we have ten years of experience applying data to matching products and people.   While lots of ad platforms exist, we think none has ChoiceStream’s unique combination of data quality and predictive power.  Plus, because CRUNCH is fully automated, we can manage it all for agencies and brands practically hands-free.

What does the competitive set look like for CRUNCH? How do you differentiate?

CRUNCH uses real-time information about millions of consumers to find an advertiser’s best audience:  the most likely and most cost-effective responders to an ad campaign.  We do this in a practically turn key way for our agency and advertising clients – relieving them from scouring lengthy, arcane segmentation taxonomies.  CRUNCH automatically finds audience at scale, even in some of the most unexpected places.

Because we manage a campaign from completed creative to delivery of final results, one might call CRUNCH a “managed audience targeting platform.”   Unlike DSPs, we have our own algorithms that allow us to optimize audiences for our client’s specific campaigns (which learn and improve as our client keeps using our platform); we also use our own proprietary intent and conversion data in addition to third party data from DMPs like eXelate and AlmondNet.  We provide detailed audience analysis (what types of people saw and responded to the campaign) at the end of each campaign as part of the quid pro quo for asking our clients to trust us with the entire audience selection job. 

Should we think of your personalized advertising as similar to retargeting offerings from Dotomi, Criteo and others?

The simple distinction is that retargeting campaigns are aimed exclusively at existing customers; CRUNCH is aimed at both existing and prospective customers.  CRUNCH serves ads to anyone deemed, according to our predictive technology, to be a good prospect for the brand’s particular message.  We’ve found during our beta testing that we’re very complimentary to lower funnel tactics like retargeting and paid search – because as we expose a brand’s message to the right audience, those qualified prospects visit the site and convert.

What is the target market for ChoiceStream’s new ad platform?

We are working with all brands and digital ad agencies who value display advertising.  We are a performance-based service (we always optimize to the advertiser’s desired outcome).  Our initial go-to-market is focused primarily on brand advertisers, but mainly because we think they are the most underserved part of the market:  brand advertisers are the most frustrated with the difficulty of using audience data and measuring its precise return.   At launch, CRUNCH is prepared to assure brand advertisers that a) we can find a larger, more relevant display advertising audience more efficiently than they can working with DSPs, directly with DMPs, or with any other available service; and b) we will prove it to them by measuring their preferred back-end performance metric (e.g., cost per click, engagement, Vizu survey results, etc) and reporting our results at the end of each campaign.

What part of the purchase funnel does ChoiceStream address?

Since we’ve been harnessing intent and conversion data for 10 years, CRUNCH can run campaigns to help brands find prospects at nearly every buying stage.   We believe, however, that further down the funnel –the re-circulation and re-targeting stages – call for specialized services (such as dynamic creative) that CRUNCH does not provide and where retargeting companies can do a better job than we can today.   CRUNCH helps brands find qualified audiences at the influence and consideration stages in order to grow their customer base.  And when a CRUNCH audience enters the funnel, our clients see a notable increase in the effectiveness of down-funnel campaign efforts.  We like to think that CRUNCH-qualified traffic lifts all marketing boats.

Do you use exchanges today? Has real-time bidding impacted your business?

We are integrated with the AppNexus platform and take full advantage of real-time bidding so that we can find qualified prospects at scale and at a reasonable cost.

Are you profitable? How many employees? 

Since we are a small, private company, we do not disclose financial information. We are about 50 people today, and growing. 

A year from now, what milestones would you like to have accomplished?

We would like to have been tested by all of the major agencies and brands.  We know anyone trying CRUNCH will like the results and want to buy more; and word will spread that CRUNCH works as promised. 

Follow (@ChoiceStream) and (@adexchanger) on Twitter.

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