By Terry Pender, Waterloo Region Record
During the past seven months, a local startup that helps publishers maximize ad revenues from websites has grown by 40 per cent — month over month — and wants to hire 20 engineers as it prepares to more than double in size in the coming year.
Sortable was founded by Chris Reid, a serial entrepreneur and electrical engineering graduate from the University of Waterloo. Earlier this month, Reid moved his fast-growing startup into a former restaurant behind the strip mall at 607 King St. W.
Up until then, Sortable was in the University of Waterloo’s software incubator in the Tannery — the Velocity Garage. Sortable went into Velocity with three employees. It now has 23, and is aggressively hiring more software engineers.
Reid said the idea for Sortable came out of his former startup Snapsort. It collected reviews, prices and product information for online shoppers. If you needed information about digital cameras or sports apparel, Snapsort aggregated the data for you on a series of websites.
“The goal was to aggregate the data from around the web in one spot, so they could make an informed decision and get the best price,” Reid said in an interview.
His team developed deep expertise in big data, analytics and optimization. And then Reid realized that expertise could be better used in a much more lucrative, global market. Publishers around the world struggle to increase ad revenues from their websites. And Sortable found ways to do that quickly and efficiently.
Typically, Sortable helps a publisher increase revenues by 20 to 30 per cent. Sometimes by much as 100 per cent. The ad groups within publishing companies do not have technical people on staff and, in the age of digital advertising on websites, that leaves them flat footed.
“The way you maximize revenue best, that is a big data problem, that is an optimization problem, they are not well equipped to solve for that,” Reid said.
More than 80 per cent of his clients are in the U.S., and Sortable is in discussions with some of the biggest and most recognizable names in publishing. All of them, Reid said, underpriced what they charged for online ads.
Sortable built the capability to track online shoppers in real time, and decide what kind of customized ad should be put in front of them. It does this in less than a thousandth of a second.
As shoppers move around the web, they are tracked in real time. If shopper goes to a website of a Sortable client, the deep analytics decide what to put on the site in front of that shopper — content marketing, a video or an actual product.
That ad may be tailored to that specific shopper, saying something like: “Hey, you left that sports apparel company’s site without buying anything, so it is now offering you a 20 per cent discount.”
If that ad is successful on the Sortable client’s website, the sports apparel company should pay a lot more for the ad, Reid said. But to do that, the publisher needs the data and information to see exactly what is going on in the complex world of online advertising and shopping.
The digital trail that online consumers leave behind is collected and crunched by Sortable software. Where you are coming from, how much you have spent in the past and what people like you are worth.
“It is a data problem, and that’s why publishers are not set up well to solve for it,” Reid said. “It is actually a machine-learning, analytical, big-data problem versus the traditional ad business.”
With the rise of the commercial web, something called programmatic advertising also came along. Brands and advertising agencies push out ads to automated exchanges. They are seeking the lowest cost space on websites, and the agencies and brands have all of the data. It can take as little as 20 seconds to place the ads.
“And we come in and say: ‘No, no, no, no. Let’s give publishers the same kind of data, the same kind of protection, that same kind of insight and options that the demand side has and that advertisers have,” Reid said.
Verticalscope is the lead investor in Sortable. Verticalscope is a private, Toronto-based company with more than 600 websites specializing automotive, power sports, power equipment, pets, sports and technology.
“Given that we are only a year old, we are focused on publishers we can on-board quickly,” Reid said.
“That said we are in talks with some of the oldest publishers in the world. Things are transforming very quickly for us,” Reid said.