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Kiosked: turning news sites into shopping malls

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Kiosked embeds ads in a publisher's own content. Is this the future of the ad format?

Micke-Paqvalen-682x1024If you like shoes then a good place to see ads for shoes would be inside an article about…shoes. This simple idea has made Kiosked one of adtech’s most talked-about firms. Hot Topics mets Kiosked’s co-founder and CEO Micke Paqvalén…kiosked online advertising

The author Jim Thompson said: “A weed is just a plant out of place”. You could say the same about online ads, which many people see as the digital equivalent of bindweed.

But ads are only unwelcome and intrusive when they’re irrelevant.

If you are looking for a new camera and an ad appears offering just the one you want at a great price, well, that’s no weed.

Hence the race to solve the relevancy problem of online advertising. Google made billions out of search-related ads, which directly correlate interests with commercial listings.

But display? Well, it’s still wide open.

Finland’s Kiosked has its own approach, which is based on linking ads to publisher content itself. So when a consumer is reading an article about, say, running, she can click on the text or image and be served an ad for running shoes.

However, the Kiosked platform doesn’t just gather information about the content. It also understands its users. Which is why another running enthusiast reading the same article will be shown a different campaign.

What’s more, the ad will not appear in the traditional banner placeholders, but in and around the content itself. It will be much more visible.

Brands seem to like the idea. Kiosked was founded in 2010 and currently works with 10,000 clients including Nike, Asos, Zalando and eBay.

VCs like it too. The firm has raised $12.65m in two rounds of funding.

Hot Topics spoke to Kiosked’s co-founder and CEO Micke Paqvalén…

What was the reason for starting Kiosked?

We looked at the online ad market and we saw two problems we wanted to solve. The first was viewability. Advertisers are paying for non-performing views because ads are placed in special ad slots that have just become invisible to most consumers. Our idea was to use the content itself as a placeholder.

Now, that’s not easy because you have all these different CMSs, and different video players and images that are cropped into different sizes and so on. A publisher site is very dynamic environment and we had to create something that could cope with that.

The second problem was relevancy. It’s a bit more complex. We wanted to build a platform where the consumer is served relevant ads at just the right place and time.

So started off by enabling the platform for curated products, then we built the front-end architecture and then we built the algorithms that control the contextual matching. It took us three years to build but now we have an end-to-end service that no one else can match.

Which customers did you target first?

Online-only publishers whose bread and butter is online. They can see their ad revenue declining, but they have premium inventory that they know is valuable.

How much work do they have to do to link their content to ads?

That’s the beauty of the system: you add one script to the site. That’s it. All publishers  have to do is make decisions about the frequency of the ads and so on. So, they could decide they want to add a contextual ad to every image they display. Or maybe one in five. It’s their choice. Ultimately, they just focus on producing great content and the platform does the rest.

What kind of results are you getting?

The click-through rates are 80 to 200 per cent better than industry average.

How are you planning to develop the platform?

One of the next steps is to white label it so that bigger publishers can create private exchanges. We know we have customers who have their own sales teams and advertisers . We want to give them the platform so they can fill the inventory themselves, and set their own prices.

And what about moving beyond advertising?

Well, this is where it gets really interesting. We always had a vision that ours was a solution that could be about not just advertising but content and commerce too. What does that mean? Well, the platform matches relevant content to relevant users in real time. It just happens to serve ads at the moment. But it can easily serve a video or a blog post or an e-commerce checkout.

In fact, we think our platform will do a fantastic job of this because of the meta data we can collect to make what we serve relevant. So, for example, we won’t show a product listing to someone who we know can’t get that product shipped in their country.

It’s enormously complex, all of this. That’s why it took three years. But it was the whole idea from the beginning.

So why ads first?

It’s where the money is. And the business model is so scalable. We’re adding 1bn new impressions a month to our network and that matters to advertisers.

Why would advertisers want to serve content rather than ads?

Lots of brands are creating their own content now – videos and the like. So, Nike, for example might release a video of Ronaldo’s top ten goals and then use our platform to distribute it to consumers that they know are interested in Ronaldo. They could embed ads or other links inside that video. It’s up to them.

When it comes to e-commerce is there an issue with payment friction? You might be serving relevant listings, but if the checkout is cumbersome surely that will depress sales…

I agree it’s a problem. But it is solvable. We have an e-commerce system, but we’re looking at partnerships so we can get to a single secure one-click checkout that works all over the world.

And I assume there’s a revenue share for you there. Is that a bigger opportunity than ads?

Definitely. We’re just at the beginning of a huge boom in e-commerce.

So what’s the split now?

90/10 ads. There’s no doubt ads are where the money is at the moment

Do you ever get push back from publishers who are concerned about keeping advertising and editorial separate?

Sometimes. It depends on the market. In the US and Asia, it’s less of a question than in Europe where they are still a bit more traditional.

One of the big trends in online publishing now is for native ads – sponsored content that looks and feels like regular editorial. If this really takes off, does it threaten Kiosked?

Actually, you can view what we do as an automatic native platform. We’re helping publishers serve highly relevant ads that genuinely complements their editorial output. The difference is that native content is very manual. It takes a lot of work to produce. What we do is automated and scalable yet still contextual.

Who’s trying to buy Kiosked?

We’re not interested in selling! We are profitable, we control and own all the IP, so why should we? That said, we are always interested in partnerships that can help us do things better.