Yieldbot CEO Mendez Talks About Funding And Future For Publisher-Side Platform

YieldbotJonathan Mendez, founder of Yieldbot, a publisher-side analytics and targeting platform, discussed his company’s new funding and next steps.

AdExchanger.com: Who invested, how much – and what were you looking for with investors beyond the money?

JM: We did a $1.2M Seed round from an amazing team of investors. RRE & Betaworks lead the round. Our Angels are Jerry Neumann, who is also joining the Board, David Tisch, and some great Angel Funds including Boston’s Common Angels, Lindzon Capital and one soon to be announced new fund that we’re incredibly excited about being their first investment.

We were looking for investors that shared our core beliefs that 1) the current methods of matching in display advertising are ineffectual 2) there is opportunity to increase the value of digital media to publishers, advertisers and consumers by an order of magnitude with real-time intent data 3) A solution to the relevance problem in display requires new thinking and technology that more closely resembles Search and Site Optimization than the current Display stack.

What does Yieldbot’s competitive set look like? Any changes here since last we spoke in March 2010?

As I just blogged, Yieldbot is the digital advertising equivalent of a greenfield network. The opportunity we’re after is nothing short of building a brand new revenue channel for publishers. Ground up we are building new and improved matching technology, creating new and improved media, using new and improved valuations and delivering new and improved buying mechanics – all using first party data in realtime. Our only interface with legacy Display architecture is the ad server. Our competition is anyplace advertisers are spending money to match their ads with interest or intent. Fortunately, most of those budgets are unlimited as long as you can deliver quality traffic. All indications are that the intent Yieldbot harvests accomplishes that.

Is the product in-market today?  Who are Yieldbot’s clients?

Yieldbot has been in beta since April of last year. In that time we’ve collected data on approximately 150 million referred visits and 750 million referred page views into the platform and served about 10 million ads with an overall CTR of 3.82%.

Our publisher base includes a cross section of everyone from well-known large sites to smaller blogs. Our product focus has been on how we capture, store and organize all the metadata attached to those visits and click-streams to make Yieldbot’s data mining and matching algorithms effective and actionable in realtime. As we continue to improve the technology and add more publishers into the platform we will scale up the amount of advertising running through Yieldbot.

How does Yieldbot use cookies? How does this address concerns around consumer privacy?

Our targeting is pixelless, so we address concerns about consumer privacy by acknowledging and agreeing with the vast majority of consumers that behavioral targeting is creepy, intrusive, violates personal privacy and doesn’t deliver a more relevant or helpful web experience. This is a user-controlled medium. We weren’t going to build a technology that was on the wrong side of that equation. In fact, we specifically built Yieldbot to optimize itself off realtime user activity in a similar way that Search Advertising does.

Yieldbot cookies are domain specific and session based. We capture referrer and click stream data and update our anonymous visitor intent profiles in realtime with every landing, pageview and exit. We also capture temporal and geo data to slice across our data sets. I’ve made my position on Privacy very clear and we’ve made it a point to have it clear on our website as well.

Where do you see the publisher ad server going from here?

Publisher ad servers are their monetization OS. Not only do they hold the key to unlocking higher media value but they are the bridge connecting the publisher’s media and data – both of which they need to take ownership of. While they’re at it they should take ownership of the ad server too.

The Publisher opportunity is that the buy side has gone as far as they can go in Display. VCs have thrown $6B at the channel and the past few years have been spent building new companies, new pipes and pushing the edges of media with data. However, if you look at channel performance or speak with publishers, advertisers and consumers you quickly understand that true media value continues to drop. That stands in stark contrast to Search where there has been consistent 20% YoY growth in top line and bottom line revenue directly attributable to more advertisers, better performance, higher media prices and increased distribution. With new channels like Facebook and Twitter fighting hard for digital ad dollars over the next few years I see the publisher ad-server is the last chance to make Display a truly relevant channel over the long-haul.

A year from now, what milestones would you like the company to have achieved?

Like parents of any young bot we want Yieldbot to grow and learn. Specifically I’d like us to better understand media discovery and consumption patterns to better match the various stages of product consideration lifecycles in verticals like Auto, Finance, Technology, Telecom & Health. We look at Search and see one company that has gathered an amazing amount of knowledge on those patterns and has used them to power the greatest ad matching capability the world has ever known. But Search is only one half of the intent puzzle.

The other half – where all those people go to fulfill interest and intentions from Search and Social  – are publishers. Remarkably no one has ever built a technology to understand, capture, organize and make actionable those intent patterns once people are on the Publisher side. So only half the ad-matching problem is solved. Hopefully a year from now we’ll be much further on our way to solving the other half and powering our own great ad-matching channel with intent.

By John Ebbert

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1 Comment

  1. Alex White

    Very interesting stuff. I’m not sure I am understanding the distinction between not targeting on cookies, but using them to collect anonymous data on the behaviors of users and using that information for targeting. Is it because its session specific and you don’t connect the data back to the user on subsequent sessions?