In a release last week, Permuto, a CPC, display ad retargeting company, announced that through its ad platform, the company had shown return-on-ad-spend results “within three percent of SEM” for e-tailer Heels.com. Read more.
Shaukat Shamim, Co-Founder and CEO of Permuto, discussed the company’s services and shared observations about the e-commerce landscape.
AdExchanger.com: When working with Permuto, what can a marketer/publisher, such as a company like Heels.com, do to help drive performance?
SS: We use a very “search-like” mechanism in display advertising through our Buyer Channel where retailers can target buyers with certain intent and get a return on ad spend on par with Search. They provide us with product feed (images, prices, etc for all of the products they want to sell through our channel), pixel their site and set their budget for the campaign. Participants in our channel are able to collectively benefit from shared, anonymous and blind intent data that is extremely granular and timely. Our channel helps clients reach new buyers with high buying intent.
Can you discuss Permuto’s pricing model and how it evolves in a relationship? Are viewthrough conversions ever involved?
Our pricing model is primarily based on cost-per-click (CPC). We found that the traditional display advertising pricing model, CPM, was cost-prohibitive for many of the retailers we’ve worked with/spoken to. That’s because CPM leaves all the risk with the retailer – they pay every time the ad is displayed, regardless of how that impression performed. With CPC, we take all the risk. We are driven to maximize the performance and relevance of each ad through our channel, because if that ad doesn’t get a response, we don’t get paid. We do not believe in view through conversions, it is a hoax that is used by some when return on ad spend is harder to prove.
Retailers are limited in two of their highest performing channels. Today, retailers are using SEM and comparison shopping sites almost exclusively to acquire new active buyers for their online storefronts. Although highly effective, SEM and comparison shopping sites are severely limited in reach (less than 8% of online population) and impact (text-based, word-limit restricted ads). Online display advertising is of great interest to merchants because it offers the greatest reach (80%+) of any online distribution mechanism. Historically, it’s been limited due to poor performance, with declining click rates and return on advertising spend. But several companies, us included, are starting up and/or gaining momentum because they are solving the various challenges of traditional display to help open up the channel for retailers.
Is real-time feedback critical to optimization and driving clicks?
Yes, extremely important– accurate, timely and granular knowledge of consumers’ real-time buying intent is an essential piece of the solution we offer to retailers. Today, we are successfully customizing ads and scoring the real-time purchase intent of approximately 40 percent of the U.S. online shopping population. We understand a buyer’s purchase intent for millions of products and provide insight into their current activity and past browsing and shopping history. However, just having this knowledge is invaluable unless you are able to connect retailers with buyers on a wide-spread scale and deliver relevant, personalized ad creative in a timely fashion. Providing these three key pieces – knowledge, the automated marketplace to facilitate connections and the real-time ad server – is how Permuto drives unparalleled return on ad spend for retailers.
How do you scale Permuto’s business model? For example, is there an opportunity through video?
Given the high demand for the solution, we are selectively adding well known merchants and eCommerce vendors to our channel. We will also be adding more categories in our channel. Video is a very desired distribution channel, and we definitely have plans to test the performance metrics of that shortly.
By John Ebbert