This is Part 6 of my continuing series on the most important digital advances and most interesting emerging companies. This report focuses on the growing retargeting business, led by Criteo and 14 other companies described below. Prior reports focused on the Cloud; Google Glasses; Crowdfunding; Airtime (Facebook video chat); credit card linked offers (Linkable Networks); trending social companies Wendr, ShopSocially, and Karma. Next week's report will feature more trending companies. To read the full series, visit http://www.jackmyers.com/media-business-report
With the Internet at the center of technology advancement, coupled with the growth of mobile, consumers are more inclined than ever to shop online. This means more opportunities for online retailers and a growing market for web-based advertising. However, while consumers are shopping more online, there is still a staggering percentage of shopping cart abandonment. That is, a consumer will visit an e-commerce site with the intent of making a purchase, but will not follow through with their purchase. According to the Baymard Institute, the average online shopping cart abandonment rate is 65.23%. As a result, marketers and advertisers have found targeted ads, using behavioral targeting methods, to be crucial to their success. Retargeting, or remarketing, displays an ad to users who previously showed an interest in a specific product or service.
It can be a very powerful tool: imagine a consumer on a website checking out a little black dress. She doesn't purchase it, but as she continues to surf the net, she sees banner ads displaying that very same little black dress she just looked at moments ago. In essence, the little black dress keeps following her, keeping it in the forefront of her mind, ever coaxing her to buy it.
Retargeting companies, such as market leader Criteo, are using retargeted ads to improve the success and effectiveness of online sales. Because of its proven ability to improve return-on-investment, retargeting is becoming an increasingly prominent strategy for improving online sales effectiveness. To meet the rising demand for retargeting or re-engaging customers, more retargeting companies are debuting, but Criteo is the largest of the retargeting companies and is having the most success. Whether through banner ad retargeting, social retargeting, intent retargeting, site retargeting, or search retargeted, these companies are revolutionizing the way online shopping is being filled and checked-out.
Criteo is the leading retargeting company and helps a variety of online businesses use display ads to more effectively attract customers back to their e-commerce site when they have visited but not made a purchase. Based in Paris and doing business in 32 countries, Criteo's "pure CPC (cost-per-click) model and technology make our ads perform like search," says company president Greg Coleman, former senior Yahoo executive and Huffington Post president.
Consumers can opt-out of targeting advertising from Criteo through the National Advertising Initiative. Web surfers in Europe can opt-out directly on the banner ad itself. "We put a direct opt-out link on all retargeting display banners in Europe, and hope to bring this feature into the U.S. market," said Criteo founder and CEO JB Rudelle. Profitable since 2008, Criteo has the financial wherewithal to go public, according to Coleman, who adds, "Criteo will generate more than $300 million in revenue in 2012. We have our heads down looking to build a more than $1 billion revenue business within the next few years." Criteo has received funding from Elaia Partners, Index Ventures, AGF Private Equity, and Bessemer Venture Partners. The company was founded in 2005
Criteo has thousands of high-profile advertising clients including One Stop Plus, Zappos, Shoes.com, Expedia, Lamp Plus, Tigetdirect.com, CompUSA, Guardian Online, and Boden. As of the first quarter of 2012, Criteo had over 4,000 publishers in a direct relationship. "We selected Criteo as our retargeting partner because the company's sophisticated technology produces real, substantial results for us, while delivering highly relevant interactive ads for our customers, tailored specifically to their preferences," commented Oliver Elliot, Online Acquisition Manager of Boden.
ReTargeter helps to provide data for advertisers according to behavioral retargeting solutions based on recent consumer search results and trends. This includes consumers who have browsed through e-commerce websites but have not purchased. Some of ReTargeter's clients include SmileyCookie.com, Zendesk, Tim Ferriss, Crowdcast, and Gist. ReTargeter was founded in 2009 by CEO Arjun Dev Arora in San Francisco. Prior to ReTargeter, Arora served as the head of Business Development of Yahoo! According to a recent interview with Arora, "ReTargeting is an awesome tool for getting your brand in front of the people you care about, but its value as a driver of conversions is very dependent on the advertiser's conversion funnel. We strongly encourage advertisers to test creative with us, as well as A/B test landing pages on their end." The company is funded by various angel investors.
MediaFORGE, based in Salt Lake City, is an emerging retargeting company that uses advanced advertising technology for improving the ad placement of many large brands and retailers. It's run by a heavy-hitting executive and advisory team, including CEO Tony Tizo, who co-founded ezADit.com and Precision Data Link. Tizo commented, "We were confident about our business right from the start. We knew what we were doing was extremely innovative and had the potential to shake up the industry. Our instinct was validated as soon as we saw how excited our clients were about the results." MediaFORGE has received funding from Venture Funding, Gazelle Investments, and Prospector Equity Capital.
Founded in 2008 in Phoenix, FetchBack is a behavioral retargeting advertising company that specializes in helping consumers find products and services based on their Internet usage trends. Through its FIDO™ technology, FetchBack provides detailed analytics for retargeting, helping advertisers achieve improved results from their campaigns. "There has been a persistent myth in our business that paid search is the holy grail of online advertising," says Chad Little, FetchBack's President and CEO, "but we can prove that in most cases FetchBack Retargeting delivers a higher value for advertisers. No one in their right mind would suggest that advertisers stop paid search; what we are stating by sharing this data is that advertisers need to look more carefully at the competitive ROI that Retargeting delivers. If they are running a paid search campaign, they should also be running a Retargeting campaign." FetchBack's investors include Metamorphic Ventures, Gersh Venture partners and angel investors.
Ad Roll is a retargeting platform company that has more than 5,000 brand advertisers in the world, with the majority of them in the US. Brands using Ad Roll include Microsoft, TiVo, Hipmunk, Groupon, Red Vines and Cooking.com. Ad Roll was founded in 2007 by CEO Aaron Bell, president Adam Berke, and COO Peter Krivkovich. The Company has received funding from Foundation Capital, Merus Capital, and Accel Partners.
Founded in 2006 by CEO David Jakubowski, Aggregate Knowledge uses Software as a Service (SaaS) technology for increased success targeting ads for major advertisers around the world. "We designed the media mix modeling capability so that marketers can easily model changes to their media mix based on specific metrics they want to optimize for, without the need to download and aggregate disparate reports," said Yosha Ulrich-Sturmat, VP of Product and Marketing. Investors of Aggregate Knowledge include DAG Ventures, First Round Capital, OVP Venture Partners, and Foundation Capital.
Magnetic is a search retargeting company located in New York that was founded in 2008. The company uses consumer search history to target appropriate ads for advertisers, marketers, and big name brands. It's the first company to focus 100% on search retargeting, Magnetic self-proclaims. Executives include CEO James Green, who worked at The Walt Disney Company and Pixar Animation Studios, and CFO Matthew Novick. Magnetic is funded by Charles Rivers Ventures, NYC Seed, IA Capital Partners, New York City Investment Fund, Ron Conway, Founder Collective, and multiple angels. To date, Magnetic has raised $5.25 million in venture capital.
Simpli.fi has taken basic retargeting one step further by using a demand side platform (DSP) for optimum success. This means more targeting capabilities for brands and advertisers. Executives of Simpli.fi include Frost Prioleau, the CEO, and Paul Harrison, the CTO. Simpli.fi has benefits for a variety of advertisers, including search marketers, brand marketers, networks, and trading desks.
Founded in 2008 by CEO George John and VP of Engineering Abhinav Gupta, Rocket Fuel is a provider of advanced advertising retargeting based on search engine results. "We have had a number of advertisers scaling us up all at once. For the ones with specific performance objectives, it's only rational for them to keep giving us more of their business," said CEO George John of his rapidly growing business. Clients include Pizza Hut, Allstate, Nissan, Cox Communications, and General Mills. By combining purchase intent, social and intelligent demographic data with its own platform of targeting algorithms and expert analysis, Rock Fuel goes beyond behavioral analysis. Rocket Fuel's investors include Cross Creek Capital, Summit Partners, Northgate Capital, Labrador Ventures, Nokia Growth Partners, and Mohr Davidow.
For nearly 10 years, Choice Stream has been reengaging customers and providing retargeting ads to large retailers and leading brands based on previous browsing history and online shopping habits. Choice Stream was founded in 2001 by CEO Eric Bosco, who also founded Johnson-Grace Company. Advertising clients include Tesco, Ticketmaster, MTV, AT&T, and Zappos. Choice Stream's funding comes from Venture Funding.
Founded in 2008 by CEO Chris Sukornyk, Chango is a search retargeting company and media buying platform. They display ads based on search results from major search engines, including Google, Bing, and Yahoo! Chango is funded by Extreme Venture Partners, iNovia Capital, Mantella Venture Partners, Metamorphic Ventures, and Rho.
AudienceScience provides detailed and accurate retargeting services for marketing and advertising firms for the purpose of e-commerce. In 2010, Wunderloop was bought out by AudienceScience. Wunderloop was originally founded by Frank Conrad and Ulrich Hegge in 1999. Jeff Pullen and Mike Peralta are the CEO and President, respectively. Frank Conrad, one of the co-founders of Wunderloop, is currently a Vice President and System Architect for the company. Advertising clients of Wunderloop have included AOL, Tradera, Tutto Gratis, while clients of Audience Science include j2 Global Communications, Sketchers, Oracle, and others. Investors include Atomico Investments and several angel investors, including Klaus Hommels and Howard Hartenbaum. Investors of Audience Science include Mayfield Fund, Mohr, Davidow Ventures, Integral Capital Partners, and Meritech Capital Partners.
RadiumOne is a social retargeting company that combines social interaction data with advanced targeting technology to deliver results to advertisers. RadiumOne was founded in 2009 by CEO Gurbaksh Chahal, who at the age of 16 started ClickAgents, his first company, and sold it for $40 million eighteen months later to ValueClick. Later -- in 2007 -- Chahal sold his BlueLithium ad network to Yahoo! for $300 million. Investors of RadiumOne include Adams Street Capital, Crosslink Capital, Trinity Ventures, DFJ Esprit, and Stanford University. As of March 2012, RadiumOne had raised $33.5 million. TechCrunch is reporting that RadiumOne may be in the process of closing a $50 million investor deal, is on a path to earn $100 million in revenue in 2012, and could have a pre-money valuation of $500 million.
LocalResponse in a social intent retargeting company that uses public posts and check-ins, such as those on Facebook and Foursquare, to determine advertising opportunities. Its clients include Coca-Cola, Kraft Foods, Walgreens, McDonalds, Pizza Hut, Microsoft, Audi, Pepsi, and many others. Nihal Mehta, the CEO of LocalResponse said "We think that being able to create much more targeted ads based on social can close the gap between mobile versus desktop ad spend." Executives include Kathy Leake, the president and co-founder; Michael Muse, the VP of Product and Operations and co-founder; and CEO Mehta. LocalResponse is funded by Venture Round, Cava Capital, Vodafone Ventures, and Progress Ventures.
Founded in 2010 by CEO Jonathan Mendez, Yieldbot is a retargeting company that captures shopping intent at various retailers in real-time, making this information available for advertisers and thus consumers. According to Jonathan Mendez, "While there has been growing search & display convergence in buying platforms I look at Yieldbot as the first ad matching technology inspired by search & dynamic landing page optimization." Yieldbot has received funding from New Atlantic Ventures, Neu Venture Capital, RRE Ventures, Common Angels, and various angel investors. AllThingsD.com reports that Yieldbot recently raised $4.2 million led by RRE Ventures and New Atlantic Ventures.
Editor's Note: Criteo is one of the portfolio companies of Media Advisory Group, parent of Jack Myers Media Business Report.
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