Shaukat Shamim is CEO & Co-Founder of Permuto.
SS: We are a company comprised of online advertising junkies, all of the founders been involved in online advertising from the formation days of Internet. We had our hands on building ad servers and other core technologies that eventually became backends of Yahoo! and DoubleClick. Naturally, we looked at online display advertising and we saw large inefficiencies.
Everyone knows that "search" has revolutionized online advertising. When we dug into search, we made a surprising discovery where a large majority of the top 100 advertisers of search are ecommerce shopping, travel and auto retailers. That was a light bulb moment. We decided to build a company that will make display advertising "effective", as effective as search, and to be very much focused on bringing search-style economics in display advertising.
Permuto means "Total transformation" in Latin. During the early days, as we were scrambling for a name with deep correlation with our business, Navdeep Saini, our CTO, pointed out the name, and lucky us, it was available.
What's your view on ad exchanges? And how will they play a part of Permuto's plans?
We work with a number of ad exchanges, and we will continue to do so. Ad Exchanges enable us to get access to a large number of users quickly. Our plan is to continue to work with ad exchanges and even expand that coverage.
Do you do a rev share with publishers? Any plans to buy and/or resell user cookies from publishers?
We work with publishers on a variety of financial models – revenue share, media purchases, etc. Because we want to make it as easy as possible for publishers to work with us, we have experimented with different compensation structures.
No, we do not plan to sell any data that we collect to anyone else. Our purpose in collecting anonymous data is solely to serve ads to shoppers. Period.
On the advertiser side for Permuto, how is data important for targeting? What data sets do you use?
Data is very important to us. The better the data about consumer shopping habits, the better our advertisements can be and the more value we bring to consumers. We have found that the more granular and specific we can get about a user’s purchase intent, the better opportunity we have of featuring a relevant ad. We use a variety of data sets, some from third parties, some from our own network and all collected in a privacy friendly way without any Personally Identifiable Information (Non-PII).
What is ShopperConnect?
ShopperConnect is the name of our offering. It is an all-inclusive advertising platform and network that integrates shopping data, dynamically-optimized creative, media buying, backend reporting and ROI calculation – all in one solution.
We have three products lines:
- ShopperConnect Engage - a first-of-its-kind solution that helps merchants acquire and connect with new customers that they have never seen. Participation is almost that of SEM, the platform lets retailers target shoppers who are in market for shopping for particular product and then automatically generating thousands of dynamic ad campaigns based on their product catalog and shoppers’ specific interest.
- ShopperConnect ReEngage - Serves personalized, product-level dynamic ads to customers who were shopping on a merchant’s site, but left before the transaction was completed.
- ShopperConnect Reach - Delivers brand marketers a high-quality, brand-safe and carefully selected network of themed shopping-oriented websites to reach ActiveShoppers. The network includes online retailers, comparison-shopping engines, review sites, sale & bargain sites, and product-oriented blogs.
Beyond the tag line, how is Permuto "Reinventing Online Display Advertising" as you say on your website?
As most of us know, the graphical advertising market hit a big bump in the road in 2008. From Q4 of 2007 to Q4 of 2008, the average price of remnant inventory for all sites declined from an eCPM of $0.50 to $0.26. That is a decline of almost 50%! In one year! There are several factors for this decline – the recession, an increase in supply of pages – but the essential reason is the same: display advertising does not work. That is, to say, it is not as effective as, say, search in driving direct return on ad spend. We are looking to correct that.
To do this, we have created a system that does two things: (i) serves ads only to users who are interested in the content of the ad and (ii) makes it easy for advertisers to buy. To accomplish the first, we identify users by their purchase intent and serve an ad that matches that intent. To accomplish the second, we have a platform that:
- Eliminates the need for a merchant to spend time and effort making ad creative;
- Eliminates the risk to merchants that their ads will not provide new leads; and
- Monitors performance of our ads to ensure that our network is delivering good quality leads to merchants.
Imagine the influx of thousands of new merchants into the advertising pool – paying for, and getting performance from, display ads in the same way that they are paying for search. That is revolutionary!
Where's the sweet spot in terms of your target market?
Our target market is really any merchant selling product online. Because we are focused on the online shopping space, we do not currently work in any other verticals (i.e., travel or real estate). As for the shopping space itself, we welcome almost any merchant. While we would love to work with any product, we have found that there is a minimum CPC below which we cannot make the payouts work for most publishers. As a result, we do not usually feature the very low CPC products, like books. Otherwise, anyone selling products online is squarely within our purview.
Where does optimization fit in with Permuto's products?
Optimization is core to what we do. In fact, without it, we will not survive. Because in our model we take on the risk that the ads we feature will click and ultimately convert into sales, our ads must work. As a result, we are constantly optimizing the performance, based on a variety of factors: product, ad creative, publisher, comparison product, size of brand, color, font – you name it.
Will real-time bidding (RTB) impact Permuto's display advertising product?
Yes. We believe that over time real-time bidding will eventually make our whole model even more efficient.
Will agency buying platforms provide an opportunity for to Permuto?
We certainly hope so. Anything that makes it easier for advertisers to purchase from us is certainly welcome by us.
How does your experience at Rhythm NewMedia, a firm that specializes in individually targeted mobile ads, inform the development of Permuto?
At the time I founded Rhythm NewMedia, I was very intrigued by the lack of monetization and efficiencies in the mobile industry. But we had to take on multiple tasks of educating the market, creating forward-looking services and selling to brands only.
That experience played a big part in founding Permuto as we got an early conviction that an open performance-based marketplace is the big opportunity to have.