Spotlight: Andrew Pancer
by: Julien Sharp | June 1, 2009 | No Comments
Digital Mindshare Spotlight: Andrew Pancer, COO of Media6° (http://media6degrees.com)
Digital Mindshare is pleased to present Andrew Pancer in this week’s Spotlight. Andrew is the COO at Media6° (http://media6degrees.com). The firm is based in New York and funded by Contour Venture Partners, Coriolis Ventures, and several prominent angel investors.
Andrew started his career as a CPA, but was quickly drawn to marketing, going to Ticketmaster and then USA Networks, where he set up their eCommerce division. He then became CFO of About.com, and the firm experienced a powerful growth trajectory after the tech bubble burst. Andrew then moved to the New York Times, where he was enlisted to lead the media giant’s digital strategy and M&A efforts. In 2007, he became acquainted with the founders of social media and online ad company Media6°. He maintained an informal relationship with the company, providing guidance in the early stages of the startup. After seeing the exciting results of the company’s beta tests, he accepted their offer to join the team.
DM: Can you give us an overview of “Media Six Degrees?”
AP: Media6° provides major brand marketers with custom targeted audiences using the power of social graph data, to help serve ads to them. The familiar phrase “birds of a feather flock together” best describes our audience creation technology.
We provide major marketers with transformative analytics, marketing insight and massive media scale by applying neural network discovery within campaign data to dramatically lift response rates to marketing efforts across the Web.
As we mention in our website, our patent pending algorithms and methods connect a brand’s existing customers with user segments composed entirely of consumers who are interwoven via the social graph.
DM: Tell us about homophily, the concept that drives Media6° business.
AP: Well, the term isn’t exactly in the public domain. It’s used primarily in sociological studies. It basically means that people’s social networks are homogenous; people who are friends share common interests, beliefs…and common brand affinities. In other words, people stay together in tribes.
One of the members of our advisory board is Foster Provost, PhD. He is an Associate Professor, NEC Faculty Fellow, and Paduano Fellow of Business Ethics at NYU’s Stern School of Business. He has studied the concept of homophily in much depth, finding that it crosses many boundaries, including sociological borders, and it replicates in a variety of matters. For example, these patterns of “flocking together” exist in weight loss: If a friend goes on a diet, you are more likely to do so. The same holds true for smoking cessation.
This concept has been utilized in the offline worlds of telemarketing and direct marketing for some time. For example, consider a study done by AT&T Research Labs. Telemarketers make countless calls, with many people refusing the offer before a person says the magic words “I’ll buy.” Research showed that if the telemarketer then targeted the people who the buyer had contacted in the past 60 days, sales were increased by 3-5 times! The same thing proved to be true in direct mail campaigns.
So, the founders of Media6° were intrigued. If we think of the telephone as a social graph, then online is a connection also. Whether via blogs, social networking connections, or photo sharing, people are contacting and connecting based on shared affinities.
DM: What’s your approach when preaching about relatively new concepts like social graphing and homophily to the marketplace?
AP: How we make the social graph actionable is using the old concept of re-targeting, or re-marketing. If I am a retargeting firm, I go to a marketer or their agencies. I can place a pixel on the publisher’s website. If a user visits that website and has a cookie that identifies that user as having seen an ad for, let’s say Nikon cameras, then based on that cookie info, the user can be shown a Nikon ad again. That’s standard re-targeting.
It’s very, very effective, but there is one big problem: it doesn’t scale. This is because it only targets those who have it the website, but it doesn’t pull in anyone new.
But we have solved that problem at Media6°. We can grow retarget audience by at least 10 percent by taking the retargeting concept and scaling it providing a whole new group of people who are just like the original target audience, but new to the advertiser.
We partner with social networks, but just to drop the cookie. We then collect two pieces of info – the referring URL on that page and the browser ID. These two pieces of data are data that are collected in ad serving logs. We simply grab info that’s been collected in web server log files for years (it’s nothing proprietary or new). We do not collect personally identifiable information about the user. We drop cookies on users’ machines when they visit the profile pages and that’s how we can build the social graphs for our clients.
That cookie is a proxy for an individual – tied to an individual user. Now, if a cookie visits a client’s website, we know that the cookie is interested in that client’s product. Let’s start with somebody visiting that website – is that cookie in our database? If it is, we look at that cookie and what other cookies has that cookie overlapped with – have they been to the same blogs? Photo sites? We are able to see and document shared connections because they like the same things. We are able to retarget the individual who went to the website and serve ads to their “network neighbors.”
It’s really exciting. We are growing much faster than we even expected to. This is because we are showing incredible results in our campaigns, providing very strong, immediate ROI. For example, for dollar our larger retail marketer clients are spending, they are seeing on average an 8:1 return, and 10:1 in certain cases!
DM: How do you see the digital space changing in the next 5-10 years?
AP: Actually, I spend a tremendous amount of time thinking of this. I see the space changing from both a marketer’s perspective and a consumer’s.
For the marketer, I believe we will have a continued bifurcation in the market between direct marketing and branding. My mantra has always been about data. In fact that’s why I am at Media6°. Content is still king, but data is key.
Both branding and direct marketing issues will grow, but separately. The use of data to validate a return on investment in all its forms (direct response, engagement, improving branding) will continue to be more and more important. I believe data will be able to do deep and intelligent targeting across ad platforms and media – including TV, news, the Internet, etc., and we have the ability to help marketers string it all together.
Now, on the consumer side, we’ll likely see an evolution of social media that will follow patterns we have seen in the past, since the inception of radio, broadcast TV, etc. There is going to be more and more compartmentalization. Ning and KickApps are doing amazing things by allowing individuals to create their own social networks, allowing tribes of people to band together in meaningful ways.
Users will be able to have a universal profile, and bring it to their individual social networks. They can then truly focus on areas where they have an affinity and meaning, allowing full dialogue, rather than this broad-based mix that is currently seen on a Facebook or MySpace profile. In fact, I think that concept will overtake those platforms.
When I was at About.com, we built hundreds of sites based on people’s own affinities, and through those sites, people developed deep, emotional, personal relationships with other visitors…because of their shared affinities. Social networking tools allow this to happen in a very fascinating way. You just can’t do this with a standard design, like Facebook.
Now, I also think it is going to be hard to build businesses out of these networks, unless you are aggregating scale. That’s why I think Media6° and companies like ours are important. If you are building out a vertical of social networks about, say, people who like certain sports, movies, or botany, aggregating enough of an audience to be meaningful you will not only have to string together “like” sites. You will need to impact advertising in a meaningful way. It’s the idea of contextual adjacency for advertising, and it’s not a new concept: You have to get the right ad in front of the right person regardless of where he or she is.
DM: It’s certainly tough times in the market right now. What advice can you give to entrepreneurs looking for funding?
AP: From my window at the New York Times, I saw a lot. The main thing is to have a very strong understanding of your business model – and what it is we are trying to accomplish at Media6°. I saw some startups that had no chance. I am more conservative; I am not a fan of “build the audience and figure the monetization later.” If advertising runs the business, how will you sell it? Will you have to evangelize it? If I were going to evangelize a brand new idea, I’d just forget about it; it can be done but it’s incredibly difficult.
It’s so important to surround yourself with a great team of A-players – use your network! Also, make sure to do as much as possible before looking for funding, including building a prototype. And don’t present a plan that says you will need additional funds in 12 months – if you do that you are dead.
Finally, something very important I have been preaching lately, and we talk about it a lot at Media6°: You always put the consumer first, but you also have to put the advertiser first! If you have an ad-supported business, you have to constantly consider how what you do is going to benefit the advertiser! Just because you have an audience, it doesn’t mean that audience is going to put their money toward your advertisers. There are a lot of sites out there with really huge audiences, but they are not getting the big ad dollars because they are not showing advertisers why they should be there, why they should spend money there!
How can you show advertisers you are going to drive sales, help them build their brands? Whatever it is, you have got to be able to prove that. You need to talk about that a lot and make that a very big focus of your business.
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