Start-Up Watch COD: Compass Labs uses real-time social comments to pinpoint user interests and deliver targeted ads

How do data companies and targeting engines determine your interests? Most of them use cookies to determine the sorts of content you’re consuming and the sites you’re visiting. It’s been proven effective, But if we get real for a minute, we need to admit to ourselves that Display response rates tend to be so microscopic that even small improvements in targeting make a difference. I’m not diminishing the power of BT to improve results but rather pointing out that the standard approaches and algorithms needn’t be perfect to have an impact.

But what if we could be CERTAIN about what a consumer was interested in. More specifically, interested in buying?

Compass Labs is an interesting new company that thinks it has a way to do just that. Rather than inferring user passions and needs, it analyzes what people actually tell the world they are interested in through their social media activity.

Put it this way: Would you rather put a Cadillac banner up in front of:

A consumer that has visited a lot of luxury auto content?
Someone who just typed “I am interested in buying a Cadillac” in their Twitter status?
Of course it’s not quite as simple as that; based on what I read from my friends and connections, comments are rarely THAT obvious. But the basic principle behind Compass Labs is that more effective targeting is possible when we interpret people's comments than when we read the tea leaves of their Internet travels.

Theirs is a real-time ad targeting and serving platform that puts ads into social environments precisely when users identify their interests. These ads appear in Facebook, Twitter, social media apps, and thousands of community posting boards across the web. In total, the company says it can reach 200,000,000 web users in any given month with highly targeted messages that offer stronger response and conversion rates.

Publicly available social media information enables Compass Labs to offer a broad range of targeting options, including users’ current interests, lifestyles, purchase intent, demographics, location and other factors.

Here’s their pitch vid from last year’s Under the Radar:

http://www.ustream.tv/recorded/10810222

As is often the case with advanced targeting, the benefits to DR marketers are obvious. But brand-side advertisers can also benefit by impacting brand perceptions among people who in earlier stages of the buying funnel.

Flipping the coin over for a sec, there are some significant benefits to the pub side as well. Obviously Facebook and Twitter benefit from more ads, and higher value impressions. But for pubs that offer forums, this stream of advertising revenue can be almost 100% incremental because it has traditionally been so hard to convince advertisers to place messages in UGC environments. Advertisers tend to fear the unknown, and forums may as well be renamed “Unknown Zone” as far as content goes.

With this new dimension of precision targeting, millions more page views can get monetized – and at strong rates.

I haven’t worked on any programs using them, but I think the concept is rather compelling, and warrants a serious look from DR and Brand advertisers.

Thanks to ad:tech for publishing this first.