• by Steve Smith , Staff Writer @popeyesm, October 28, 2011

Email marketing company LiveIntent CEO Matt Keiser says that he has been dreaming of the day he could serve highly targeted ads dynamically in real time into emails since he founded his previous email company Datran many years ago, but the technological limitations hampered him.

He wanted email ad units to behave with the same kind of flexibility as networked Web advertising. He learned that the absence of reliable cookies or Javascript in the platform limited his ability to do the kind of real-time ad serving that could recognize and respond to parameters like place, date and time. As a result of these limitations, most email campaigns traditionally have been targeted into email at the point of send – targeted by the user’s known place and the current time and context of sending. “If you opened it a week later or in a different location, the ad was not appropriately targeted,” he says.

With LiveIntent, however Keiser, along with fellow ex-Datran executive COO Dave Hendricks, claim to have cracked the code on delivering ads that recognize user context more precisely and can optimize campaigns on the fly based on the responsiveness of recent recipients.

The company works with publishers to place their ad tags into the email newsletters. “When the user opens the emails sent by any email service provider, the tag lights up and pings our server,” says Hendricks. “Based on where the user is, the device they are using, the newsletter they are reading, our engine places the appropriate ad in the newsletter.” In essence the company has created an exchange for in-box ad inventory.

The engine is capable of highly granular targeting, LiveIntent says. For real estate seller City Habitats, the advertiser wanted to get downloads of its iPad app and so only targed email coming into an iPad inbox. “But they also had to be in a certain DMA,” Keiser says. “We got them the same cost per install as they were seeing on search, but they had tapped out search and were looking for cost-effective acquisition.”

Real-time targeting also opens up the opportunity to make in-massage ads recognize where and when an email is opened. For one vendor of an air travel product, LiveIntent targeted only people opening their email in Denver regardless of the geolocation the publisher might have had in its profile for the user. For a liquor advertiser they segmented by day and daypart, hitting emails that people opened only on Friday afternoon.  Hendricks says that the engine can optimize on the fly as well, so it can make real-time decisions on which ads to serve based on which one has proven to make the most revenue for the publisher. “The server is looking a lot at the signals of where they are opening, which people on which device are clicking the ads -- and based on that, predicts which ad to show. It is like Dart, but it’s smarter.”

LiveIntent is also partnering with third-party data providers to synch a cookie much like a DSP, so that for the 60% of the email audience who now can handle cookies in email, the targeting can also be done against a broader range of audience segments and behaviors. “In near real time we can pass a hash of the email address to a data provider and get all of the offline data of an individual for use at the time of targeting,” says Keiser. The targeting also goes both ways, so LiveIntent can also identify characteristics and behaviors of those clicking into the ads and then retarget them for the publishers in email or on the Web.

LiveIntent’s publisher partners often are also the company’s ad clients, using the technology to drive new content offerings and tune-ins. For one TV brand, they are working on dynamic creative and targeting that will let tune-in notices in the ad show the program information for the DMA in which the recipient opens the message. Publishers like MSNBC are among the early content providers and advertiser such as Verizon have been running targeted product ads. The carrier ran a promotion for the new iPhone 4S aimed only at 18-45-year olds that showed interest in technology.

Keiser and Hendricks say their average click-through rate for the last month has been .5% across hundreds of clients and thousands of newsletters. While many publishers still sell email on a sponsorship basis, Keiser says the model is not functioning for many and is not flexible enough to handle inventory in messages like news alerts where there is no opportunity for advance planning. “The vast majority of publishers, and some of the most famous in the world, either sell none of their [email] inventory or a very small fraction of it. They sell it on very high rates and on a sponsorship basis. But in a world of targeting, the one-size-fits-all sponsorship model is going away.”