Solariat's plan to fix Facebook's ads
Beyond demographics and psychographics, Solariat CEO says he knows the perfect time to send ad messages to social-network users.
Facebook knows who you are, who your friends are, what you like, and where you live. And still the ads suck. Google, on the other hand, gives you ads based only on what you're searching on, and its ads rock.
Can Google's ad performance be brought to Facebook and other social sites? Jeffrey Davitz is trying to do that with his startup, Solariat. The idea, he says, "is to take the Google model of responding to intention and place it in the context of social networks."
Davitz confirms that Facebook can help an advertiser find very specific people. It is great at demographic targeting. But while targeting demographics is good for making broadbrand impressions, which is what television ads are best at, it's not the best way to get people to act on ads that appear in front of them.
Facebook also knows what people "like," but using that data doesn't resonate with users, because what people once said they liked may not be what they're in the mood to know more about at a given moment. It gets creepy, and "inherently, those ads don't work," says Davitz.
Solariat technology, which currently works on Twitter, is used to detect long-range intent or need. For example, Davitz illustrates, on Twitter if you "state a need, like wanting a new laptop bag," you'll get a sponsored @ reply back from a laptop bag manufacturer.
Davitz says that the messages aren't pure buy-me-now pitches. It's when a person is in the early stages of product consideration that they're most open to influence, he says. That's when you want to send them messages. Once someone decides they want a certain product, they move to price shopping, and seeing messages from competing brands is less influential.
Davitz says that the messages his product sends generate big, double-digit percentage response rates with no opt-out requests. That's his validation.
Solariat works with Twitter now -- carefully, to not upset users or Twitter policies. He says that his ads are definitely not spammy. There's a big difference between getting a message from a company that's useful, which Solariat's algorithms can supposedly determine, and getting a junk message from a spammer just because you had the word "iPad" in a tweet.
Davitz wants to provide his technology to Facebook. But that will be even touchier. "Facebook tends to want to stay out of the user's business," he says, "but the reality is they have to get involved in the user's life, if they want to message in a more active way." He speaks of "breaking the right rail," where Facebook ads currently reside.
"Social networks have to break down that they are passive platforms." Obviously, Davitz recognizes that users are sensitive to being barraged with ads, but he insists that the social platforms, "have to resolve the conflict in a way that users are comfortable with." It'd be a waste to not try. "Outside the window of focus," he says, "ads perform abysmally."
Solariat has been in business since 2010. It has revenues from three customers (a bank, a publishing company, and cloud services company) but is not cashflow positive. The 8-person company has raised $2.5 million, primarily from KPG Ventures.