Magnetic, a startup that uses search engine data to help advertisers reach the right audience, has raised $4 million in its first round of institutional funding.
New York City-based Magnetic, previously called Domdex, is similar to some ways to a company called BlueKai. Ad networks, ad exchanges, and “demand side platforms” (which help buyers navigate ad exchanges) can buy information from Magnetic’s data marketplace to help them better target their ads. But where BlueKai’s data comes from e-commerce sites, Magnetic’s comes from search engines. So if you search for “cell phones”, advertisers use that knowledge to deliver an ad for a cell phone when you visit another website.
Tying advertising to search terms is nothing knew — that’s the main reason Google continues to rake in cash. But Magnetic takes that concept outside of the search engine itself. Founder and chief executive Josh Shatkin-Margolis said the company’s aim is to bring the power of search data to the media-rich world of display ads.
Magnetic said it currently works with more than 90 ad agencies, networks, and DSPs. The new funding will help the company expand its services, so that it’s not just running the marketplace but also working directly with advertisers and networks to combine ads with search data, and to help manage those campaigns. For example, an insurance company like Geico might decide it wants to advertise to visitors on premium websites after they’ve searched for “car insurance.” Then Geico’s agency would create an ad for Magnetic, which delivers the ad to a network, which in turn uses Magnetic data to show the ad to visitors who are searching for insurance.
The company’s technology also works on mobile phones, Shatkin-Margolis said, but there haven’t been many mobile campaigns looking for this level of targeting yet. That will probably change as the industry matures.
The company has now raised a total of $5.25 million. The new round was led by Charles River Ventures, Ron Conway, and NYC Investment Fund, while previous investors Founder Collective and IA Capital Partners also participated.