The ad tech startup factory is alive and pulsing in Silicon Valley!
Yesterday, tech incubation company and fund, Y Combinator, produced its Ad Innovation Conference in Mountain View, California. 19 ad tech startups presented themselves in various stages of development. A few companies kept their presentation off-the-record, but most “opened the kimono” in 4-minute, company presentations.
Y Combinator chief Paul Graham began the conference by identifying the big trends impacting the digital economy beginning with the world of the tablet and Apple.
He stated unequivocally, “Apple is going to take over the world” as he believed that Apple is in a position to continue to take market share with superior technology and user experience – and at some point it could drop its price points to complete the world domination. For Graham, the only question is what happens to Apple CEO Steve Jobs.
Continuing his “trend list,” Graham identified “the cloud”: “All the data is going to live in the cloud.” Yes, the computer hardware you have in your home or sitting on your desk will no longer be necessary as you’ll have an internet connection to some big, beefy data center that has sliced a little piece of cloud computing pie for your digital needs.
Big trend #3: Peer-to-peer. This buzztrend has been around for a while -especially with Bit Torrent and the like. But, Graham’s point is that the ability to communicate with each other, peer-to-peer – “things that were hardwired issues in the past are no longer.”
Trend #4 – Good News! – there will be more startups! Graham said that the world of business is going to change such that it isn’t big megacorps getting the job done, it’s tiny companies that are interconnected. Startups! And more and more of the brains of the world will float from colleges and universities to the world of the startups.
Trend #6 – Ad targeting will get even more precise. He suggested to the audience that it should think about what ads would look like if they were micro-targeted to “you.” Assume if you could read the user’s mind. When thinking about the gobs of data available today and its ability to predict when effectively analyzed, targeting will inevitably continue to improve.
Trend #7 – Measurement has a long way to go – meaning, there will be startups focused on unlocking the way the Internet and its functions, users, commerce are measured.
Trend #8 – Creative will fuse with generated. “Ads will become the user.” Mwa ha ha ha.
Graham concluded his opening statement by saying that no one should take for granted the spread of information. Data is on the loose and breaking down barriers.
And then, the start-up deluge began a each company had 4 minutes to present. The following is intended to give a hint of what each company offers.
Y Combinator Description:
“An analytics platform that helps advertiser and agencies optimize SEO performance at global scale.”
AdExchanger thoughts:
“Great name… let’s chop up some data Ginza-style. The problem getting solved here is that content is not getting optimized today in order to get promoted across multiple channels – especially for large scale publishers who need to solve search engine optimization.. which then leads to better yield. The company emphasizes their ability to measure the impact of content.”
Y Combinator Description:
“NFC platform that makes it easy for developers and businesses to incorporate near field communication into their apps.”
AdExchanger thoughts:
“Acronyms! Yes – NFC or Near Field Communication – “a way for two devices to communicate with each other over a short range.” Tagstand sees NFC tags as being important way of identifying products and effecting commerce or commercial messaging. It’s all about tapping the phone to an NFC-enabled item.. not about reading a QR code. NFC-enabled ad campaigns will need to have thousands if not millions of tags managed says the company. Tagstand offers micro-location analytics (nice buzzphrase) – basically fine, location-based information. This has out-of-home applications as marketers could be able to tell which display in the mall works best.”
Y Combinator Description:
“YouTube For Business”
AdExchanger thoughts:
“If you’re on YouTube and you want to control your branded content, Vidyard aims to solve for this. The company is targeting agencies in part as they are targeting videos for business. Vidyard says it manages the product, hosting, analytics and the “YouTube push and pull”. It reminds me of AdWords editor for video. There are no standard ads here per se. The content is the ad.”
Y Combinator Description:
“The first intelligent social media dashboard.”
AdExchanger thoughts:
“230 million tweets per day through Twitter – and Crowdbooster wants to suck the insights out of those tweets as well as other social channels. This is about managing a social media presence and recommending content and influencers to followers. This is a cool idea that is likely being echoed in its own way by companies like Buddy Media and its competitive set.”
Y Combinator Description:
“Website A/B testing and personalization software you’ll actually use.”
AdExchanger thoughts:
“Co-founder and CEO Dan Siroker gave the presentation and said that his work on the Obama campaign was the inspiration for his company. His company has created a website A/B testing tool. Optimizely claims some key difference and benefits from similar tools based on the product’s ease of use and measurement. More marketing automation here.”
Y Combinator Description:
“See and share fun, mini-reviews of places; nearby friends on the map and save money with deal alerts.”
AdExchanger thoughts:
“About local ads/location-based ads. The company initially tested the idea a message could be sent to a user based on their current location and get the user to do something. The big idea was bringing in customers to merchants who could manage dynamic pricing according to supply and demand. It’s Foursquare with offers but the game players are the merchants. Loopt quoted some university study that said a week’s worth of location data can predict who someone is. Target now, I say!.”
Y Combinator Description:
“The most sophisticaetd real-time analytics platform that companies can use to understand how user behave.”
AdExchanger thoughts:
“Mixpanel is looking to understand retention. One of the founders came from Slide which made the mindless, but clickable Superpoke.. a popular app with little ability to engage. Mixpanel thinks network effects, user generated content and game mechanics can increase retention which Mixpanel hopes to shine a light on with its platform. Need more details on this one. “
Y Combinator Description:
“The QR Code infrastructure for business.”
AdExchanger thoughts:
“Paperlinks founder Hamilton Chen believes EVERYTHING will be connected to the Internet. The company is currently focused on using QR codes. NFC and visual recognition are coming as the company wants to provide the infrastructure for mobile commerce. A plumbing play! Chen offered QR code adoption stats showing its impressive growth on a percentage basis. This company stresses designer QR codes which they say provides much better performance in terms of likelihood to get scanned. Chen says his company has a self-serve platform that can get a QR code campaign going in 5 minutes. This company lays claim to another good buzzphrase: ‘proximity commerce.'”
Y Combinator Description:
“Analytics that help businesses be more effective on Facebook. Customers include YouTube, MTV.”
AdExchanger thoughts:
“They want to be the best analytics tool for Facebook fan pages. It’s all about leveraging the reach of the newsfeed in Facebook. This is an SEO platform for Social. Social Engine Optimization. Questions under 60 characters got the most interaction..Another tip. Post three photos not one for better news feed interaction. “
Y Combinator Description:
“Webcam-based eye tracking to accurately measure and increase display ad effectiveness.”
AdExchanger thoughts:
“Marketers want to buy brand awareness.. it’s a brand marketer solution! Impressions and CTR are not relevant to Gazehawk says the company. They use eye tracking and user webcams. This sounds similar to what Affectiva is doing and the heatmaps look like Moat’s mouse engagement maps. There is an impressive list of advertisers and agencies including Millward Brown working with Gazehawk (Millward Brown is also working with Affectiva). It’s all about accurately measuring the eyes.. the eyes have the answer for brands. Gazehawk also suggested the importance of the CPL – the Cost Per Look model will be the way to go.”
Y Combinator Description:
“Competitive intelligence for online advertising”
AdExchanger thoughts:
“This is about testing as many creatives as possible and claims to allow decision making at a rapid pace. The company claims the most successful advertisers get most of their traffic from premium, highly-targeted premium inventory – not remnant. Nevertheless, the best advertisers “transform remnant inventory into premium inventory” says the company. That’s what MixRank wants to help with. Not sure exactly how it works. Again, these are short presentations.”
Y Combinator Description:
“Live audience polling via mobile devices.”
AdExchanger thoughts:
“This is an ‘audience response system’. Straightforward enough – 10 times less the cost of the clickers that are out there today. This company already has 1/2 of the Fortune 500 as customers for live events. This is instant feedback from the crowd. Live engagement tools .. nice buzzphrase!”
Y Combinator Description:
“A new CAPTCHA-like ad type that monetizes 12x better than banners.”
AdExchanger thoughts:
“This is a Solve Media competitor and allows brand messages to be put in a CAPTCHA box and thereby Amplifying brand recall. Leveraging analytics appears to be an important component.”
Overall, it’s difficult to discern the differentiation and nuance of what each ad tech company offers without moving beyond the 4-minute format of the conference. But with 19 startups, the idea of Y Combinator’s Ad Innovation Conference is to get the conversation going between the young companies and investors – or the press, as the case may be. With themes around personalized messaging and creative, analytics, engagement and unlocking mobile with NFC and QR codes, a few of these companies may turn into larger, standalone companies while others seem like features.
Nothing wrong with being “a feature,” mind you. Large companies need features and many of the startups will likely fit nicely in a larger entity.
Y Combinator’s program appears to be an impressive force for incubating the entrepreneur. There was no shortage of interest in in the presentations as the crowd consisted of venture capital and, interestingly, a lot of well-known agencies looking for an edge in their business.
By John Ebbert
