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ADOTAS Conversations: Matt Wise, CEO & President, Q Interactive

Written on
Sep 15, 2006 
Author
Kiran Aditham  |
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ADOTAS Conversations: Matt Wise, CEO & President, Q Interactive

What really makes Q Interactive stand out?

What has led to our success through ’04-’05 and ’06, is really our approach to lead generation. You know, it’s resonated and reinforced on every one of our business cards. On the back of every business card is printed “privacy, permission, and relevancy.” The concept being that what we do is, we make sure advertising is extremely relevant, and that pretty much the mathematic algorithm logic is, very similar to what Google does. We’re all trying to find a match at a relevant manner.

How does your contextual matching work differently than Google’s? What does the rest of your model consist of?

What Google does is use mathematics on keyword searches or in context for AdSense. We use mathematics made off of demographics and other intensive data to create predictive models of what kind of advertisers people are interested in.

So that’s the relevancy aspect, and then we get into permission. And really, that’s really our business model, gaining permission. 90% of our revenue comes from consumers saying, “Yes. I’m interested in some advertiser talking to me.” Whether that be JCPenney, or Sears, or a mortgage company. They say, “Yes, I would like to give permission to them to speak to me.” And that drives our ability to present the right offers that consumers are interested in listening to, the right messaging that consumers really do want that. We’re not tricking people into it. What we’re doing is making sure they truly understand this is how they’re accessing information.

And the last is privacy, our approach to privacy is not necessarily unique, but I think it is a clear cut manner that a lot of people don’t follow when you look at recent things that have brought privacy issues to light. And that is, when we take hold of consumer information, we are always very upfront about what information we are taking, and we never pass on information without being extremely explicit about what information we are passing on.

Something like 98% of our offers are at least what we call “double permission-based”, which means you enter information. For example, “I’m Matt Wise, I live in Chicago, here’s my postal address.” Then we make you confirm and say, “Yes, I want to send this off to Sears’ website.” But then, we’ll ask you again. “Here’s all the information you want to send onto Sears, and through the information do you understand that you’re granting Sears the permission to contact you?”

About 6 months ago, we introduced the technology response to triple confirm, that asks, “Are you absolutely positive you want to send this stuff on?” Again, it’s all about disclosure to the consumer about exactly what they’re doing, exactly what they’re getting into, where they’re passing that information. So we all hold the mantra of “Permission, Privacy, Relevancy” very close to our hearts and it’s influence is in how we do everything, how we do data gathering, how we do marketing, etc.

In terms of permission-based marketing and lead generation, what are the challenges that you guys face in terms of getting permission? Is there still a lot of customer reservation about this? Are you seeing more of a rise in people that are willing to participate?

We are seeing a relatively steady acceptance of the platform, the concept of providing information. What disturbs us is there are a lot of different players in the segment and they don’t all follow good privacy and permission approaches, and so we constantly are concerned that the actions of other players will hurt our industry segment in its entirety.

I’ll give you an example. When a consumer goes through a registration path that we happen to be in, we are putting our lead generation in there, we never take ownership of the data to remarket to them without the consumer expressly giving permission. The common practice amongst other players in our segment, is to, behind the scenes, when a person registers on a newspaper site and then says “yes, I’m interested in a Sears offer, is to simultaneously take advantage of that, take advantage of that registration information and use it for marketing purposes.”

Now, the consumer has never expressly given permission. When they’re marketed to, they will have no idea how that firm got their data to market to it. I’m sure, in some terms and conditions, in an eight-point box at the bottom of the page visible for about 2 seconds, is a privacy policy which says you agreed on page 7 for the right to do that.

So it’s one of the things that we call explicit permission. We always acquire explicit permission from the consumer to use their data. We always leave it under the brand to which that permission is acquired. We are not the only ones who follow such strict rules, but there are a lot of big players who do not follow these rules and that’s what the biggest challenge for us is. There is a concern that eventually consumers will not be able to distinguish, and advertisers will not be able to distinguish, between players like ourselves and less upstanding players, and it will ruin the entire market.

Right. Obviously you can’t call out anybody, but it seems like consumers are smarter now in terms of gauging who’s practicing the fairest. We report all the time, in news especially, the whole opt-in, opt-out issue. It seems like at least you guys are abiding by a tangible best practices strategy.

We are, and I think the challenging part is that there are opportunities, unfortunately, where all you have to do is give consumers the option to opt-out and not address how you get the permission in the first place. So, many of these companies are not violating any laws, neither in spirit nor the letter of the law, but we think the code is not in the best interest of the consumers. I can’t pick on these companies, not that I would call them out, but it’s even hard for me to challenge them because in following legal business practices, we’re following practices that we think will eventually disenfranchise consumers. And, they’re making a lot more money off of it than we do.

Some people want the quick bucks. So in terms of clients, can you name any off the bat that utilize Q Interactive services?

We have a large number of Fortune 500 clients and top advertisers, and for some of them we have non-disclosures or more conservative policies about it because they don’t want everybody to know about their “secret sauce.” I can tell you that 50 of the top 100 advertisers in Advertising Age use us.

So what’s on the horizon for Q Interactive?

We have a whole bunch of stuff on the horizon. We’re doing things not only to continue to pursue what we we’ve got in lead generation, which is the next generation in profiling and matching consumers to offers.

We have this whole length that we call the true conversion engine, and that’s like how Google uses a whole bunch of mathematics and algorithms to match up consumers to offers. What we’re constantly doing is enhancing that with third-party present data. At this point, we can predict the likelihood of a person to take a magazine and pay for it over time. We can predict the likelihood of consumers to acquire music CDs and we can build models of how many music CDs they will take over time.

What we constantly are doing is pushing the envelope on what are the initial things that we can predict to build that when a consumer arrives for the very first time on a site. Instead of having to sift through piles and piles of advertisers to make sure we’re picking things of interest to them, and not only of interest to them, but also that the advertisers want to acquire that consumer because they’re going to be a high spender with them in that particular niche. Those are the buzzwords that we have heard for the past decade of online marketing.

I think the areas we are specializing in are somewhat different from other players in that we are not basing our technology on keywords or context or attributes that we use. Much more of our predictive modeling comes from direct response data and feedback from our advertiser clientele on, the consumer not only clicked, but they also came back and acted to buy. So we now we need to find more people who look just like that consumer from the demographic profile. You’d think that after 10 years, everyone has made all of the advancements necessary. You know, we have a laundry list of additional data and mathematic models that we are continually adding. So that’s one area just in lead generation that we continue to pursue.

What else is under development?

We are also developing anti-fraud tools and quality scripting tools to figure out who’s really putting real data in. We have a laundry list of those. Literally every month, we come out with either a minor hint or a major hint. And then as we look forward, most of our time is spent on how we can apply all of this work that we have done to other mediums.

Lead generation is being used in the registration path as one medium. Right now, we’re starting to apply it to email as opposed to emails just flying out billions of times. We no longer send these bulk “Wal-mart has the best offer of the day.” We’re trying to match the consumer and the specific day. What are they likely to want? The moniker that we’ve said for so many years, one to one marketing, we’re not quite there yet. I don’t think anybody’s there, but we are at the stage well beyond bulk mail. Everyday we’re making choices on various audience and what they should get control of.

It’s very specified.

Yep, and the advertisers that work with us, because before they would use what I would call a traditional direct mail approach. They take a small file, mail it, creative works with that, and then you do a rollout across a large space of that creative. It doesn’t really allow advertisers every single day to change their email because they’re being mailed every single day. So, it’s closer to the interactive advertiser, the advertiser that you can change on the fly.

So it’s a really neat algorithm that mathematically brings a marketing approach to a different medium. We have our eye on letting that work start to leverage all of the rich demographic transaction data that we have in a display format, whether that be in text or banner or rich media. We look at where we’re going in the future and all of the things that we’ve got our eye on.





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