ReTargeter: A Game-Changer for Online Advertising

Retargeting, the use of cookies to track website visitors and provide customized ads for them on different sites, has the potential to completely upend the way we think about and valuate online display ads. We sat down with ReTargeter president and CEO Arjun Dev Arora to find out more about this growing–and controversial–field of online marketing technology.

What was the inspiration behind ReTargeter? Was there a particular business need at the time that you saw wasn’t being met?

I think that retargeting technology has been around for many years actually. Maybe around 14 years or so, but it was only available to very large companies, so it wasn’t a democratized technology. It was available only to a small network of Fortune 500 companies.

What we are able to do is democratize the technology and make something that was only available to large companies open to small-to-medium-size businesses, and really expand the scope of the technology as well. We kind of changed the product by introducing it to a different market. That was what was most interesting and inspiring about starting the organization.

How competitive is the retargeting segment? Are you racing to innovate against a lot of competitors or are you still going into unexplored waters?

When we started out we were super focused on the SMB market and since then we have kind of moved up market. I think we are in a place right now where there’s a lot of treading unknown waters. We are really doing a lot to help educate the market on what’s possible with display [advertising], but in addition to that there are certain segments of the market where things are now highly based on both innovation and service, and those are two things that we pride ourselves on.

Particularly with medium-to-larger internet retailer companies, the vast majority of them are familiar with the concept of retargeting, so that’s where our commitment to service and innovation is especially helpful in winning those accounts. But with the vast majority of other types of companies that are not in that segment, whether it be B2B software or entertainment or human resources or the financial sphere it’s totally blue ocean.

Is retargeting a service a lot of your potential clients already know about, or is there still an educational element to your sales pitch?

I would say for the vast majority of our pitches there is definitely educational component. We are still doing a lot of educational marketing, definitely.

One of the stereotypes about behavioral marketing in general, which retargeting ties into, is that its tracking techniques are invasive or just creepy. What’s your take on that point of view and how is your approach at ReTargeter addressing those concerns?

That’s a great question. First of all, probably most important thing is that there is just still a lot of education to be done around how the technology works and what is being recorded and how the targeting is done. One thing that we do in regards to the creepiness factor is we institute a lot of frequency caps so we are not showing more than a couple of ads per day in order to ensure that it is not overbearing and it is not annoying. But I think the bigger issue is around how the technology actually works.

All of the cookies we use are non-personally identifiable. So when a visitor comes to a particular site we are actually just placing the cookie on that browser. We don’t know anything about the user. We don’t know you know where they are surfing, where they are going next. The way we actually purchase the media is when a certain browser shows up on a particular site, the browser will search or the ad tag will search for that particular cookie, and if that cookie exists, we will buy the ad in real time.

So it is not as if we are tracking that user and saying “we know that this person is now on this site and so we are going to buy the ad,” it is just that in real time when that user appears on the particular site, we will buy the ad right then. There’s a lot of misconceptions, and it is just like information that is not factual around how the technology actually works and what sort of information folks like I will have, and I think that is where we are doing a lot of work to educate people.

Are you noticing any strong trends in the kinds of businesses that make use of ReTargeter?

I definitely think retail is a big player, software is huge, and, of course, B2B across a lot of different verticals. Entertainment has been taking off. Travel-oriented businesses too, things like the Hard Rock Cafe and various luxury and boutique hotels. We have also done a lot in the real estate space, companies like Zillow, Truly Ab, Cal Finder and others in the financial space; Smart 401(k) and ING and others. A lot in education as well. Human resources, automotive, transportation. It’s really all over the board–political, medical–it is everything.

There’s a still disparity between the amount of eyeball share turning towards online media and where the majority of advertising budgets are allocated. Will retargeting shift that balance at all?

It’s absolutely on our radar. I have spent a lot of time this fall going to various conferences from Chicago to Miami to New York and everywhere, and this conversation has come up quite often.

I think we are a big part in that coming shift because, I think, often times people don’t know what their digital spending budget is–how is it going to work, is it going to be valuable, am I going to see an ROI, is it easy to work with? I don’t want it to be complicated, and how can I make sure that it is working? We answer a lot of those questions and we solve a lot of those problems, and that allows us to be in a place where folks who have traditionally done print or television or other mediums can feel comfortable at least testing it out. Once they start to get excited by what is possible with digital it only continues to roll from there. So I think that is definitely very important to us, and it is something that we are, in 2013 especially, super excited about.

How did you previous experience working in the investment banking sector and Yahoo Real Estate affect what you’re doing with ReTargeter, if at all?

With investment banking it was a lot of raw financial analysis and really, really hard work. You know, working 90-plus hours a week is a great training grounds for entrepreneurship. Working with all kinds of different personalities was super important as well. The workload also forces you to get really good at relaxation, so you find ways to get maximum enjoyment from the few precious moments you have. That’s a really important skill when you’re working 100 hours a week building your startup.

At Yahoo I had the great opportunity to meet a lot of people in the Valley, to start building some relationships, and I got a really good sense for business development. Plus I think it adds an aura of credibility, which in the Valley and outside is important as you build the company and say “hey, I’ve come from a large internet company. I know how the web works.” Being able to speak honestly and truthfully in that capacity is really helpful.

What’s the biggest challenge you guys are facing right now either business or technology-wise and how are you addressing it?

Our biggest challenge right now is figuring out how we scale gracefully. We started out this year with around 12 people. We are now 40, so we’ve grown pretty quickly. With that in mind we want to make sure that are continuing to hone processes. Focus on our employees, make sure people are happy, make sure we continue to stay innovative and don’t get bogged down too much in process to the point that we’re not innovative, but at the same time not flying off the cuffs. Finding that balance can be challenging, but once you get it right it allows you to scale quickly.

Where do you see your segment in the next five years? What sort of challenges and opportunities do you see on the horizon?

We want to get the space to continue to go forward, especially in terms of, as you mentioned earlier, a lot of those advertising dollars that are offline coming online. That’s going to be a big piece. I think social is going to continue to play a bigger part in regards to some of the work we’re doing with Facebook Exchange, and just leveraging social data to retarget.

We’re trying lead the charge in making display advertising easy. It’s traditionally been a very convoluted and complicated process to buy digital media, and our goal is to make it as simple as possible. That is something we are very much going to be focused on for the next five, ten years, whatever it is.

What makes you most excited to be working at ReTargeter?

I think what is most exciting is some of the work we have done in the social space leveraging other data sources to be able to retarget. That has been really cool. We’ve done stuff with email, with CRM, databases, social, and we are still very early. WE’re probably a couple years ahead of the market with some of the stuff we’re working on, so it’s really exciting as the market catches up and we get to sell and engage with our clients on these sorts of solutions. That’s going to be super, super exciting, and the other thing is that, again, it comes back to the same point that the offline dollars are going to be moving online.

Other than yourselves, who are some of the most interesting individuals or companies working in your space or business software in general?

I have a lot of respect for the folks at Salesforce. I think they have done some great work in terms of the way they’ve built their team culture their large vision. Also, Buddy Media, I’m just a big fan of their story; how they build their product and their focus on relationships and having such a clear brand message. In terms of individuals I just continue to be inspired by Richard Branson, but he’s kind of in a different world.

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