Home  News & Press News Coverage ADOTAS Conversations: Yoav Shaham, Founder and CEO, Kontera
ADOTAS Conversations: Yoav Shaham, Founder and CEO, Kontera
August 25, 2006 - ADOTAS
Search engine marketers bank on the fact that when you search for an item or topic, their site or ad will catch your eye. In reality, though, how much of their overall online time do users actually spend searching? Studies revealed that the answer is not much. Searches, even if frequent, are quick, and the remainder of the online visit demands greater advertiser attention.
Since users spend so much time looking at content, there was clearly an advantage in utilizing content pages for advertisements, but banner and text ads were easy to avoid, while other mediums could be intrusive. Yoav Shaham saw an opportunity to do something different with the content pages to include advertising that not only refrained from invading the online experience, but more importantly, was relevant.
Already fond of working with numbers, Shaham summoned his experience with computers, business, and contextual advertising at eZula to launch Kontera, an in-text advertising solution. In short, Kontera developed a system that finds contextually relevant keywords on a publisher’s web page in real-time and automatically matches them to relevant ads presented as in-text sponsored keyword links. Users view the ads only when they mouse-over, making it an extension of the content, and the degree of relevancy makes the user more likely to click on a link and act on the offer.
Early last month, Sequoia Capital and Lehman Brothers took notice of Kontera’s highly technological approach in light of scarce advertising real estate and the high demand for online advertising inventory. The companies entered into a deal to provide Kontera with $7 million in funding, reflecting a growing investor interest in the online advertising space. Shaham recently spoke with ADOTAS to give us a rundown of just how Kontera began quietly inserting relevant ads, what he feels about in-text competitors, and why relevancy is king.
So, to start off, how did you get into online advertising?We got into online advertising when we saw that the problem with search is that users are only using search 5% of the time when they are online. The other 95% [spent engaging with content] was not utilized well enough for advertising. So we decided that there is a huge opportunity here to get into a new market and it started with in-text advertising.
What were you doing prior to Kontera?I was on the management team of eZula [a contextual advertising solutions provider for online advertisers and publishers]. Prior to that, I studied computers and business at university.
So what would you say in-text advertising brings that is different from other advertising approaches? How does it have a greater appeal?That’s a great question. In-text advertising basically answers a need for the three types of players that we see in our market, whether it is the advertisers that are having a short of supply for their needs, or whether it is the publishers that are looking to make incremental dollars, which means making more dollars on their pages. We allow them to make additional revenue from the webpage because in-text advertising can reside together with the Adsense of Google, with the banners of other players, and just provide additional dollars. Then there are the users, of course, to which we allow to see relevant information, relevant advertising while they’re browsing the Web, when the companies provide them with an additional way of interrupting the content online.
There are a couple of other in-text advertisers out there, like Vibrant Media’s IntelliTXT. What makes Kontera stand apart from these competitors?First of all, it’s always good to have competition and we welcome any competition. In our market there are rivals as you mentioned like IntelliTXT. There are also some new companies that are claiming that they are able to do something new with their in-text. What makes us different is that we have been developing in the last seven years state-of-the-art algorithms pulled from internal engineers with great skill in natural language processing. We are also using professors from the best universities in the world to allow us to apply natural language processing algorithms into in-text advertising.
Combining this theoretical knowledge with our market knowledge of running with thousands of advertisers, thousands of publishers, basically allows us to architect our technology in a way that would answer the specific needs of the market, and there is no other company in our market that can claim to have such a huge technological advantage. It’s good that you are mentioning IntelliTXT, but we are not so much concerned with them. We are concerned with Google and with these types of players, and what will happen when they get into our market.
So, how did this huge agreement with Sequoia and Lehman Brothers come about?First of all, it’s good to have partners like Sequoia and Lehman, Sequoia having invested in the two biggest names in our industry, Yahoo and Google. They saw the potential that we had in this new emerging market, and having them as partners opens a lot of doors for all of the different types of business relationships that one may think about. So it’s just nice to have them on board.
Do you see certain industries or markets that tend to integrate in-text advertising more than others?First of all, in terms of advertisers, it is all the advertisers because we allow users who are reading all different types of content, which means that it opens an opportunity for advertisers to reach all of the different interests that users are having.
For publishers, one may look at different publishers. Some of them have different characteristics and while we are penetrating into the market, there are clear advantages within the user-generated content areas, there are advantages with the publishers that have more content, and we’re using our real-time capabilities that are advantages for the new type of publishers. So, I would say that while we can augment the different publisher market, for each one of them it’s about tailoring our algorithms in a slightly different way to maximize earnings
Where do you see Kontera and its tools like Content Link heading in the future? Any new things in particular that you’re working on right now?We’re working on many things. Our engineers do not remember seeing the light of day. We are constantly working on the key thing for success in our industry, which is making relevant information for the different types of players. So, we are constantly improving our algorithms, getting more capabilities to them so that the results that the users are seeing are going to be better. They are focusing on the strategy which is relevancy in our industry rather than focusing on the fantastic ways of showing different types of in-text.
Any negative feedback or criticism regarding in-text ads?We’re really just hearing good things from our advertisers and publishers and our user groups. Publishers are looking to bring us more pages. Advertisers are asking when they can have more links from us. Users apparently are interacting with it in such a great way for the advertisers to ask for more inventory. So I would say, bottom line, people are just asking for more and this is our job.
There’s a huge trend right now in mobile marketing and the wireless realm. Any possibility that you might move in that direction?Mobile is the future in terms of interactive content in many areas of the world, and not necessarily in the US. For example, in China, there are more mobile phones than certain computers. So, what we did is basically we have applied for some patenting in the mobile area and we believe that gradually, we’ll also get into this market. However, in order to achieve results is the most important thing so while we see ahead of us, right now we are focusing on making sure we are in the Internet market.
So what would you say is the guiding principle behind Kontera?
I just want to reiterate that relevancy is the king and the one who will make the best relevant results with the users, advertisers, and publishers will be the one to win in our market.
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