CEO Interview: Permuto's Shaukat Shamim on The Premature Death of Display Ads
By Leslie Grandy
With the demise of printed newspapers, advertisers who used the Sunday circulars to attract customers have gone in search of online technologies that can offer the same visual merchandising power. Many of these advertisers compete against the Top 100 search advertisers for paid placement. Online display advertising has had a mixed reputation since the 90’s as an effective tool for converting eyeballs to buyers. That started to change mid last year when Comscore and the Online Publishers Association published updated research. Their report revealed that 20% of consumers exposed to online display ads searched on the advertised brand and 25% visited the advertisers’ site.
As good as those results are, there is still room for improvement, believes Shaukat Shamim, CEO of Permuto, a Silicon Valley company that has developed an online display advertising network called ShopperConnect™. Super-segmentation can further improve performance, he says. That’s because Permuto’s advertising platform was created to enable display advertisers to design pages to respond “more like search, by calculating people’s intent.”
Permuto uses semantic modeling and invisible pixels on publishers’ sites to predict shopping behavior, and then dynamically generates visual ads that match products to shoppers. Shamim notes that over 180 values are analyzed by Permuto’s advertising servers, which enable super-targeted ads that can help merchants effectively convert browsers to buyers. Semantic modeling analyzes data about past behavior, relationships and attributes to create a dimensional picture of a concept or topic. In this case, Shamim maintains this insight enables Permuto to select a product to promote that may be interesting to a consumer browsing a web store or a comparison shopping site.
Google has used semantic modeling successfully with its search platform to supports its advertising product, AdSense, but to date that product has treated display advertising as a static visual unit. Shamim argues by dynamically generating a graphical ad that optimizes for the product category and the store or content publisher, Permuto’s technology is more effective than AdSense for display advertisers. He adds that the ability to customize the right combination of product and display unit layout, offers the most visually effective ad units for customers, publishers and advertisers.
Many people still predict the demise of the Internet display ad, suggesting that video, social networking and search effectively killed the banner ad. But Shamim and his investors are banking on the fact that the reports of its death are premature. Companies just need to apply the lessons from paid search to display advertising, he suggests. “The better your data,” Shamim says, “the more effective your ad is at connecting with its target. Ads that are relevant to a consumer create value for everyone.”
So what kind of consumer is Shamim? Read how he describes his experiences loving, hating and buying consumer products.
How would you describe yourself as a consumer?
I am an impulse buyer, there are some categories where my impulses are stronger, but as a whole, I buy things that are high in technology and high in fashion.
Speaking as that consumer… What is the last app you downloaded for your personal use?
Zagat app, it is a fantastic place to find good restaurants and impress people in whichever city you might be traveling to.
What product is sitting in a “saved shopping cart” to buy soon?
Lenses. Particularly a Canon 35mm 1.2L lens. It is an amazing piece of art.
What product or service have you bought recently that most disappointed you?
A Windows-based PC.
What one piece of technology innovation would you say changed your life the most?
Web browser. It fundamentally changed how I moved from Desktop software world to Web world.
What product did your family or friends have before you, that you eventually had to buy, too?
A Canon 5D Mark II camera.
What was your most unusual job?
Being a computer science programming teacher in my second semester in college. It was for high school teachers, but unusual indeed.
What is your favorite place to shop?
Rome, Italy.
Are you a Mac or PC?
Mac all the way.
What phone are you carrying now?
iPhone and Blackberry.
Twitter, Facebook or LinkedIn?
All of the above.