SAN FRANCISCO--The world of Web 2.0 has been criticized for being too much about the nifty ideas and not enough about raking in the dough. So there were likely more than a few sets of ears in the audience on Monday at TechCrunch50 that perked up at the start of the third batch of start-ups presenting: "New Advertising & Monetization Platforms."
The judges included such Silicon Valley marquee names as Google executive Marissa Mayer, industry veteran Marc Andreessen, Sequoia Capital's Roelof Botha, YCombinator founder and investor Paul Graham, and Zappos CEO Tony Hsieh, who sold his company to Amazon this summer.
The first company to present was 5to1, an advertising technology company that tackles the seemingly unsolvable problem of filling up remnant advertising inventory that can't be filled up by premium or direct sales--and which often ends up getting filled by ads that are cheap and irrelevant. 5to1's model lets site owners and publishers fill up their ad inventory as though it's a music playlist.
"What we're talking about here is total control by the publisher," founder and CEO James Heckman said. "No ad is going to show up that you don't like." (He described typical remnant ads as "the dancing fat bellies and the punch-the-monkey ads.")
But some judges were lukewarm on 5to1.
"I think it's a really slick interface but I would just be worried," Tony Hsieh said. "It just seems like a lot of work to have to go through and decide which ads (to run)...my question is how does it scale as a publisher grows."
The next start-up was another advertising platform, DataXu. The focus of DataXu's product is a data dashboard where publishers can buy ads through ad exchanges like Google's and Yahoo's with a highly refined algorithm that promises to show the right ads to the right people at the right time--for example, that news- and sports-related ads get more reception in the morning--and then tracks the success of an ad campaign with all sorts of analytics.
President and CEO Mike Baker called DataXu's offering "rocket science," adding that the underlying technology was actually used by NASA for a Mars mission plan. "What we're doing is actually using machine-learning techniques to take vast amounts of data with a small positive-action subset, which is very consistent with the Internet advertising problem: there are very few clicks and even fewer actions," Baker said, while declining to provide any real trade secrets. "We're applying on top of that the concept of control systems."
Up next was something much more consumer-focused, and that left the audience pretty impressed: SeatGeek, which forecasts concert and sports ticket prices, much like airline price applications like Microsoft's Bing Travel do. Co-founders Jack Groetzinger and Russ D'Souza explained that sometimes ticket prices can drop unexpectedly at the last minute--and sometimes they don't.
The secondary ticket market is around $15 billion, Groetzinger said.
SeatGeek pulls in ticket prices from secondary sellers such as StubHub or Craigslist and then forecasts where they might go based on an algorithm. "We have a system that every day crawls the Internet and pulls in thousands of actual ticket sales," Groetzinger explained. "We're also pulling in other external factors that we know to drive ticket prices." For a baseball game, for example, it can come down to the weather, the starting pitcher, and whether there are popular concerts in town. "Right now we're testing at about 75 to 80 percent accuracy, and that's going up every day as our system learns."
SeatGeek, which says it's already profitable… Read more