• by Steve Smith , Staff Writer @popeyesm, August 5, 2013

Among the technorati, News360 has always been one of the best-liked news aggregation apps for mobile platforms. Its well-developed personalization algorithms blend user behaviors with social network activity to create a valuable custom content experience. Once the app builds an interest profile around you, it goes on to the Web and indexes material from a wide variety of sites, blogs and posts. The idea is to “have a single source with 100% signal and 0% noise, says CEO Roman Karachinsky.

But after 4 million downloads and several years on the market, the app is still looking for the right business model. The company wanted something that moves beyond the typical banners and intrusive advertising and at the same time satisfied the needs of its own business as well as the many publishing partners that it features. Following in the footsteps of so many publishers in the last year, News360 settled on a variety of “native advertising” that it calls the sponsored content platform.

The difference with this approach to native advertising is that the company uses the same personalization engine it uses to customize the news to also discover the right content from a participating sponsor to go to specific individuals. “We know a huge amount of information about the interests of users and can accurately predict whether someone will open something in advance,”  Karachinsky says. “We will partner with a large company and aggregate all the content that they have created, and we parse the text and try to understand who it is aimed at and what topics, brands and locations it talks about. We can detect more than 1 million data points. Then we can actively go out to our audience and find those people who are most likely to use that content.”

The company ran a pilot with Cincinnati-based software company CinCom, treating its content in the same way that the app treats all other news content. “As soon as we analyzed it, we just added fuel to it and made sure it showed up at the front of every feed,” Karachinsky says. The item is clearly marked as sponsored. Instead of the usual topic label for the story it is tagged as “promoted.” “The goal is to make promoted content interesting not by masking it, but by telling people it is coming from a company,” says Karachinsky.

The stories generated a 5% click-through rate on tablet devices and more than 10% click-through rates on smartphones. The reason for the higher CTRs on phones is the narrower range of content options in the scroll compared to the broader tablet version, which offers many more stories from which to choose. The average time spent with an unopened promoted story was one minute and 15 seconds, and 7% of the readers shared. “We did not get a single negative feedback,” he says.

The eventual goal is to perfect the technology and bring the personalized promoted content to publishing partners as well. “We think there is value to this technology and approach. We don’t want to keep it inside News360, but bring others into the ecosystem,” Karachinsky says. The more content the better for the company, because it is all about the data and seeing more readers so that the engine can further refine its personalization strength both for editorial content and promoted content. “We need as much consumption data as we can get,” he says.