The Internet has forever changed the advertising space. For decades, the same ads were blasted to millions of people, in the hope that at least some portion of the audience would have some interest in the product. Is the majority of the audience young men? Then show everyone ads for Old Spice, never mind that none of the women, or probably anyone over 35, watching would have any interest.
Now advertisers can know exactly what each person watching wants, and can target them specifically. Some people might find that to be a little creepy, but at least now we don't have to sit through ads for totally irrelevant stuff, right? It's all personalized and extremely targeted.
Getting the right ads in front of the right people is big business, and there are now a slew of companies dedicated to doing just that. Once such advertising technology company, ChoiceStream, has now raised $7.5 million in Series B funding, it was announced on Monday.
The round was led by New York-based Fred Alger Management, with participation of the Steve Johnson Family Trust.. This round marks ChoiceStream’s first new-investor-led financing since the company’s 2011 transformation into a pure-play demand-side advertising platform.
The company had an $8.7 million recapitalization round in late 2011, with Investors included AT&T, Sutter Hill Ventures and the Steve Johnson Family Trust. In all, since beginning that transformation, the company has raised $16.2 million.
ChoiceStream is a full-service media-buying company that focuses on programmatic ad buying, which allows advertisers to use software to buy and sell digital media, in real time, which gives them much more control over where, and how, their ads run. It’s easy to see why publishers would like this: they want their ads getting to the right people at the right time.
The industry is quickly trending in the direction of programmatic advertising. A study from Adap.tv back in October found that 60% of both brands and agencies plan to apply programmatic buying to their cross-screen planning and buying, including both mobile and linear TV, in the next year.
The company's primary format are display ads and banner ads, though it can also apply its targeting capabilities to banner video ads as well.
"Our goal is to make our clients smarter buyers in order to help them achieve their campaign objectives," Eric Bosco, CEO of ChoiceStream, told me in an interview. He outlined for me four ways that ChoiceStream separates itself from others in the space.
First, the company uses survey based targeting, to find out user opinions and brand preferences, so that it can apply those data sets to targeting.
'That makes it easier to target a hard to find audience," said Bosco.
Second, it has the capability to personalize the ad unit by going one step further, and making sure that the message, and images are tailored to that consumer. Third, the company uses a "robust system of machine learning" to go deeper into targeting when it buys media on its clients behalf.
And finally, it offers in depth analytic insights, giving precise detail as to who engaged with the ad unit and who converted.
"Three out of four of those are visible products, they are tangible," Bosco said. "With the last one, machine learning, we been able to achieve a 85% retention rate of brands that want to keep running ads with us."
The new funding will be used to help grow the team, particularly the sales team, as well as the tech and engineering teams. Right now ChoiceStream employs around 75 people, and that number will be closer to 100 by the end of the year.
"My mission is to make the Internet a better place with more relevant advertising. I think the ability to debungle consumers, to allow advertisers to choose the ad for each individual consumer, makes the experience better for everybody," Bosco said. "In five years time, we’ll have gone there, and the average advertising on the Internet will be 10,000 times more times relevant."
ChoiceStream serves more than 150 brands and agencies, in verticals such as retail, e-commerce, shopping, travel, financial services and restaurants. Some of its clients include like Zappos, Dunkin’ Donuts, and AAA.