Jonathan Mendez's Blog

Yieldbot is Born to Run

 Two years ago after Omniture purchased Offermatica and I started Relevance AMPlified (RAMP)  I stated three core principles of what I was doing next:

1.    Intent & affinity are the root segmentation strategies

2.    Achieve success w/ the most advanced technology

3.    Testing, targeting & optimization is our DNA

These ideals are also evident in everything that Yieldbot is and will become. Now after a year of work it is time to share Yieldbot with the world.

Yieldbot really started to come together last April when I decided to pivot from building ad side technology to having it be publisher technology. Simply put, there is so little publisher technology and such a crushing need for it. I had a pretty clear vision of what I wanted to create but I knew I needed help from people smarter than me. Also, I knew that even though we were building a display technology the problems that needed to be solved were not ones that legacy “display” people would be right for.

Fortunately Scott Rafer introduced me to Donna Romer and her background in pattern recognition and semantic search was (no pun intended) a perfect match. Donna and I spent almost everyday from May to September last year whiteboarding exactly what we needed to build. This groundwork was crucial. With all the start-up advice around the web you don't hear about this approach but we couldn't have built such a great product without clearly mapping the vision first.

Looking for an engineer to actually build it in New York proved difficult. I was already picking David Cancel’s brain on the project and he connected me with an amazing engineer in the Boston area that was another perfect fit. In early November Richard Shea started building Yieldbot. Richard is my favorite type of engineer  - one that uses code in a way as creative as any art. We’re going to keep running engineering from Boston and with the bounty of analytics, CDN and other relevant engineering talent up there I think it’s a great decision.

The most enjoyable part of this has been the literally hundreds of people I’ve met and talked with over the past couple of years as this idea has taken shape. Publishers, Advertisers, Engineers, Founders, Angels, VC. I’ve chatted up Yieldbot everywhere from the nicest executive offices of the world’s top media companies to the hood of a beat up old Subaru. At the end of the day technology is essential but people and relationships are what makes things happen.

So, my “Crusade for Relevance” in the digital medium continues with a new chapter. As always I’ll continue to blog my thoughts on it here. If you want to follow Yieldbot he’s on twitter @yieldbot and if you are interested as a publisher visit our site here. Rave on!

Display’s Matching Problem

Simply put, advertising is a matching problem.

It is a puzzle of people and needs, demand and awareness, creativity and messaging, and most of importantly, timing and context. It works best when the shape of the consumer fits perfectly with the shape of the advertiser. While conceptually this idea is not new  - advertisers have long been armed with reams of information on all these data points - matching in the legacy of advertising was at best a fishing excursion and at worst a waste of buckets of cash.

The web changed everything. All of a sudden we had the other piece of the puzzle. As the first medium that was actually controlled by the people consuming it, that very control became available to advertisers to match against. People were raising their hands and announcing what they were interested in doing and discovering. This of course made the matching pretty easy. Search grew the tool sets to take advantage of this. Amazingly, publishers with their loads of site analytic data did not.

The inevitable result when all media is accountable and the puzzle pieces fit together is that all the wasted dollars dwindle and the dollars not being wasted end up on a matching platform. And if the platform is free, real disruption occurs.

By 2003 with Craigslist available in 32 US cities publishers were feeling the first effects of easier matching. Classifieds are the original matching advertisements so in hindsight it was logical that they would be the first revenue to get disintermediated by better digital matching systems. In this era of realtime it sometimes gets forgotten that not only the immediacy of digital publishing caused old media’s demise. More than anything else the ability to efficiently facilitate consumer-to-advertiser matching killed old media.

Fast-forward and now it is display advertising that is old media.

The first thing to remember is that display was born as old media/old advertising’s solution. The idea was started by a print magazine and embraced as an easy way to lure ad dollars into an emergent channel. Not much has changed with display since that time. That’s because the way its technology has been built makes it incredibly difficult to match consumers with relevant ads. There are some verticals where appending data may be helpful but as mentioned earlier, timing and context are critical in shaping a match.

This gets to the root of display’s matching problem. The temporal value of data is fleeting and context is frequently not discernable. If we look to Search for matching guidance context is exactly what Google’s algos are trying to understand. It’s why they take in-session query history into account. It’s why they look at temporal factors from time-on-page to time-to-click. It’s why they take landing page bounce rates and copy into account. It’s why they’ve added social factors to SERPs. It’s why 25% of all SERPs (and growing) are being personalized. Context, the weaving together of interrelated conditions that brings meaning to why a person is doing something, is the key to delivering relevance.

Amazingly context is a word I rarely hear anymore in display. In fact I’ve read quite a few people dismiss its value. That’s bullshit. I understand, display was not built to deliver context but I’m afraid I see too few people working on solving this problem – a problem that fundamentally addresses the value of the media. The rise of audience buying is exacerbating this problem. It’s a red herring to get media dollars into the channel because no one is clicking the ads. Why, because they are not relevant. There is poor matching.

The lessons to be learned from the rise of Search extend far beyond the way media is priced, bought and sold. Without new methods and technology to deliver relevance all those buying & bidding platforms and exchanges will be short lived. Sure, there might be some nice exits as there has been in the past, but display ads will still suck, real value will not have been added to the medium and Search will only become more dominant.

This may be the final bell. As with the rise of Craigslist & Google the real losers in this matching game will not be the advertisers. The real losers with display’s matching problem will be publishers. The only thing of true value in a user-controlled medium is relevance. As all media is becoming searchable, time is running out to deliver it.

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