Amiad Solomon is CEO of Peer39, an online semantic advertising technology company.
AdExchanger.com: Please describe momentum in 2009 for Peer39.
AS: This has been a breakout year for us as we have been recognized as the leading innovator in the field of semantic advertising and targeting. Early in 2009 we started working primarily with publishers that have a bulk of unclassified content – mainly news and general interest – enabling them to classify the content and sell it at higher CPMs. We found a sweet spot here in helping publishers to capitalize on a secondary premium class of inventory. Now, as our business has grown, we see a huge emergence in the role ad exchanges are playing in the buying and selling of non-guaranteed inventory. That has pushed our market expansion beyond just publishers, with a trend toward deals with buying platforms, where we are able to provide semantic attributes to assess and increase the value of each impression.
In that there is a shift toward buying audience and addressable media by buyers, how can semantic/contextual targeting remain relevant?
We’re also seeing a heightened trend toward transparency and providing a safe environment for advertisers. Semantics unlocks a huge opportunity for brands to make sure their ads are running in content that is first of all not objectionable, but even more interesting, in content that is most favorable to the brand message and campaign goals. This is an exciting area for us, and we are seeing more and more interest from advertisers in using semantics to ensure that their ads are running where the content best supports their campaign objectives.
Why did you decide to abandon the semantic ad network business? What were the challenges?
We made a strategic decision to focus on our core business, which is our semantic advertising platform. As we all know, the ad network space is pretty crowded, and there are a lot of great networks out there already. Semantic classification is one attribute that a network can leverage to optimize performance, and we think that the networks that will succeed are the ones who will be able leverage many data attributes. We concluded that it makes the most sense for us to focus on our core capability, which is to understand the meaning and sentiment of any piece of content, and we focused all our efforts to do this better than anyone else. We see enormous opportunities with our partners to leverage our data in all sorts of creative ways. We can play in the network and exchange space where it makes sense, with the right partners, as we continue to grow our publisher/advertiser footprint and work with demand-side platforms.
Talk about your initiative regarding the sale of white-label solutions of your semantic targeting technology to publishers. How is it being received? What is the optimal target of your sales efforts?
We’ve had some top notch results from this initiative. We’ve seen the most traction with publishers who have large amounts of unclassified or diverse content. We’re able to find valuable content that publishers just can't access easily – for example, business content in the news section. It's very easy for publishers to incorporate the new “semantic business” inventory into their current slate of products and packages.
As we work more with publishers, we also see the opportunities to find “new” categories, like Parenting or Green Technology. While many publishers have content in these categories, they don’t have an effective way to aggregate it. This is also the case with different types of hot topics, around an event or a happening, where the site content strategy and tools may not support building a whole section, but advertisers would be interested in buying those impressions.We can do that dynamically. Essentially, we see the obvious low-hanging fruit opportunities beginning to grow into more strategic selling strategies.
Down the road, we see the opportunity to link semantic classifications to the value of any content. With the way content is consumed and approached today, it is simply not effective to only look at packaging and pricing content based on sections. We see a movement toward every impression being an informed impression. From our perspective, semantic attributes can have a direct impact on the value of a particular piece of content, and in turn on the CPM it commands.
Is the increasing focus on privacy concerns around behavioral targeting and cookies an opportunity for semantic technology in that it is cookie-less?
Any plans to combine your tech with behavioral targeting?
Actually, the two technologies make a very effective, complementary team. Partners with an existing behavioral targeting system should also use semantic targeting to target ads based on content meaning, improve consistency and make segment creation more granular.
For example, a behavioral system will identify a visitor to a news site as a “news intender,” which is not of value in an audience play. Semantic technology identifies the user based on the specific URL, and defines interest based on the specific content of that article – so instead of a news intender, we can make it possible to identify that user as a technology enthusiast.
Why is semantic targeting an important tool for brand marketers?
It comes down to enabling an ad to be placed in the most favorable content for the brand. Whether it is an issue of avoiding negative and objectionable content, or simply finding the best content match, semantics allows a level of understanding of content that has not been available before. Brand advertisers are very concerned with the uncertainty of content on the Internet. We’ve seen advertising contracts that specifically prohibit the display of ads alongside content that is potentially damaging. Failure to meet those standards results in a penalty or voiding of the contract, so publishers and advertisers both lose out. Social networks in particular are feeling the effects of advertiser trepidation.
Semantic targeting is able to detect content that is best for brand image and even identify Web pages that attack a specific brand. Once a threatening environment is detected, a semantic system gives various options to the publisher, allowing them to change the ad or remove it automatically and on the fly. By contrast, using old contextual systems, if a consumer blog mentions a brand name, it might trigger the serving and placement of an advertisement for that brand, even if the blog is trashing the product. We have all seen this phenomenon and it is no wonder that some major advertisers are delaying full entry into the Web until these problems are solved.
What's your view on ad exchanges?
We believe the ad exchanges will play an increasingly essential role in the industry. Exchanges have introduced an extremely efficient way to buy and sell media, and as the platforms become more and more sophisticated, they are providing greater value to the buyers and the sellers. We think the exchanges will be the platform for buying unguaranteed inventory.
Obviously, there will always be a market for the direct selling of premium guaranteed media to advertisers. There is a huge value in that, in the specific campaigns running on specific sites over particular timeframes.
That said, most content sites have large volumes of inventory that can't be sold in this way. Exchanges will allow media companies to sell their non-guaranteed inventory more efficiently and with greater control than ever before. And as companies like ours get integrated into these platforms, there can be greater transparency into what an advertiser is actually buying than ever before. This is good for content companies as well as advertisers.
Will real-time bidding (RTB) and demand-side optimization be an important new feature for exchanges? Or, is it all hype? Could Peer39's semantic technology work in a real-time bidding environment?
We’re talking a lot about real time bidding these days. Clearly, you have to be cognizant of market trends, and the ideal situation has you anticipating what is coming next. RTB is a huge opportunity for exchanges and for us at Peer39. Part of our core capability is providing semantic classifications dynamically – which makes us perfectly positioned to add tremendous value to the RTB process.
As far as demand-side optimization, we see a big opportunity here as well. We are fortunate in that we made the decision to laser-focus on our core capabilities and our core technology. We integrate with the new demand side platforms, to provide the value of semantics as part of their strategies. As these platforms proliferate, we see only upside for our business and the value we can provide in the total ecosystem.
What is the biggest challenge when building a technology company? Finding talent, funding, shifting markets, or another?
First, the key thing is having a solid product that provides value to the market today, and can be part of evolving that market as it grows and changes. We are fortunate to have that kind of technology, and to have made some hard decisions to stay disciplined and focused on making sure that we are the best at what we do – understanding meaning and sentiment of any piece of content out there. This is what has made us attractive to investors, and we’ve succeeded in securing good funding in a tough market as a result.
The challenges really grow out of that premise – maintaining the discipline to make the right choices and stay focused on a plan and execute that plan. Clearly, talent is key to that strategy. You want committed people, people who understand the business and can evolve as the market changes and the company grows. We’ve also been fortunate to have some incredible industry advisors that provide vital insights that increase the brain-trust exponentially.
It’s also really important to choose the right partners. In the early stages, it helps tremendously to have clients who are collaborative and forward thinking, who want to try new things and who share a vision of where the market is going. This way, you know you’re building the right capabilities to scale the business. That’s why we are proud of what we’ve been able to accomplish this year, and see 2010 as another huge growth year for us.
I think if you do those things – stay focused, work well to deliver for collaborative clients – then you can build a successful profitable company that attracts the right talent and great clients.
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