Toronto company finds way to increase ad clicks 400% on social networks

A re-branded Toronto-based company is finalizing its choice for a CEO and recruited an industry heavyweight to its board, as its seeks $5-7 million in second round financing for a new technology that can increase ad hits on Facebook and other social media sites by more than 400%.Peerset Inc. – which just recently changed its name from Ontogenix – is live beta testing a patent-pending software platform that data-mines the interest profiles of millions of social networking users to identify where advertisers can get the biggest bang. One product, the Interest Correlation Engine, collects information from social media sites and groups interests together to better understand where to post ads.The technology was developed by co-founder Amit Kanigsberg, along with childhood friends Josh Mozersky, a philosophy professor and Canada Research Chair at Queen’s University, and Daniel Veidlinger, a linguistics professor at California State University.“The holy grail of the Internet over the past year or so has been the monetization of social media phenomena with hundreds of millions of unique visitors a month. The big problem is that advertisers are throwing billions of dollars at online advertising but not realizing the benefit they would like. It’s an even bigger problem with social media advertising,” says Chetan Mathur, a serial tech entrepreneur who chairs Peerset and is acting CEO.Peerset has created what it calls a “neuromat” – a large database of correlation indexes drawn from millions of records and pages on publicly available sources, including social networks, blogs and video sharing sites. This information forms the basis for a predictive engine that can tell advertisers which ads will have high relevance to different types of users.“It’s anywhere people have expressed interest about themselves. On a wine connoisseurs’ blog, for example, we would try to extract out other interests such as fine dining and cigars. On another site you may find that women who like the show Sex in the City, also indicate an interest in sushi and massages – things that aren’t part of a normal ontology,” explains Mathur, who stresses that the technology does not collect personal information about individuals – only their interests.Social media advertising has yet to hit its stride, with click rates well below advertiser expectations. The top 25 social media networks delivered over 155 million unique visitors in February 2008 with 70% coming from MySpace, Facebook and Classmates.com. YouTube and Flickr contributed another 60 million. Peerset says it can increase these numbers by at least 400%, with beta trials showing increases of between 200-900%.“There are other companies in this space, mostly start-up companies still in the technology development phase, whereas Peerset is live and in production and in pilots,” adds Mathur. “The technology is working and proving to yield some fantastic returns.”The main customers for Peerset’s technology will be social networking publishers and Internet advertising companies like Doubleclick, Right Media and AOL. “These types of companies have lots of personal information that they’re struggling to monetize. Through a partnership or revenue sharing arrangement, we will work with these companies to deploy our technology such that the ads that their customers are putting in are dramatically increased,” says Mathur. Peerset expects to begin generating revenue before the end of the year.Jordan Banks joins boardMathur, who is also CEO of IP convergence company Next Pathway Inc., got involved with Ontogenix in March 2007 as an angel investor. Since then, the three-year-old company has managed to secure $900,000 in venture capital from Growthworks and $550,000 from Pareto Corp., a Toronto-based marketing services company. (Peerset’s co-founder and CTO, Amit Kanigsberg, is Perato’s former CTO). Over the coming months, Peerset hopes to secure an additional $5-7 million in financing to boost sales and marketing over the next three years.On Tuesday the three-year-old company announced that digital media executive Jordan Banks would be joining its board., which includes digital marketing executive Marc Ruxin and Roger Chabra from Growthworks. Banks is the former CEO of Internet broadcaster Jump TV, and previously was managing director of eBay Canada. Peerset has also appointed former AOL executive Greg Keegstra as VP business development, who will head up the company’s new San Francisco sales office. Peerset has 10 employees in Toronto.“We need to be close to the action and San Francisco is where the big social media sites like the Facebooks and the MySpaces are, and the VC companies. It’s the epicenter of social media today,” says Mathur. The company expects to have a permanent CEO in place by early December.

Toronto company finds way to increase ad clicks 400% on social networks

Broadcast | November 13, 2008

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