ADOTAS – Search retargeting company Magnetic announced today its plans for continued expansion in addition to figures around its growth to date. Specifically, the company claims an approximately 500 percent revenue growth (year over year) in 2011, and while it just augmented its original New York City base by opening offices in Los Angeles and Buffalo, NY in January, it’s also planning to open a Chicago office this spring.
Magnetic, founded in 2008, was an early leader in search retargeting — the company lays claim to being the first company to focus solely on that aspect of the industry. According to Magnetic CEO James Green, as he explained the company’s growth and future plans in a phone conversation last week, that specific focus means they’ve given a lot of thought to discerning what a search term might mean, depending on who’s entering it and under what circumstances. “People use strings of words they put together and it’s not always obvious what that string means,” he said. “Say you type, ‘I’m going to grill a steak on a sunny day.’ Are you looking to buy a steak? Are you looking to buy a grill? Are you looking for a weather report?” In other words, in order to deliver the right ad, a search retargeting algorithm would have to understand something about the elements of that statement and put them back together holistically. To help paint that picture, Magnetic’s software is “looking at historical data from pages around the internet,” Green said. From there, it can “take search data — the hand-raisers — and actually use it to power advertising elsewhere.” The “elsewhere” is a big part of the point for Magnetic, he explained — while “two-thirds of the dollars goes to search advertising,” he said, time spent on search sites constitutes “5 percent of your time on the web.”
The results have proven quite popular. “Last year, for example, we doubled revenue every quarter — a little more than doubled in Q4,” Green said. “We’re having a ridiculously good time selling our product.” He points out they managed this rapid growth throughout 2011 with only a New York-based sales team. And now, in addition to establishing local sales teams in Los Angeles and Chicago, Magnetic is also “closing international campaigns,” Green said. “That’s just a strange thing I’ve never seen before. It’s mostly people in the U.K. calling us and asking to run campaigns.” By the end of 2012, he said, he expects Magnetic will be making moves toward opening overseas bureaus.
While Magnetic’s growth over 2011 is impressive, Green suggested it might be indicative of new attention being drawn to display advertising. “I don’t think we’re the only ones in the industry,” he said. “Display is the fastest growing part of the industry. All we’re doing is putting feet on the street so we can soak up the demand with media buyers.”