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Company Enables Ad Monetization of Transactional Emails, Newsletters

3/18/14

By Ken Magill

A new company is enabling the monetization of email newsletters and transactional messages with cost-per-click contextual advertising.

Dubbed ReachDynamics, the company was co-founded a year ago by Eric Castelli, formerly a co-founder at LashBack, and Johnathan Barnes, formerly with AdKnowledge.

According to Castelli and Barnes, ReachDynamics works with multiple demand-side platforms to automatically serve contextually relevant advertising into clients’ newsletters and transactional emails.

What is a demand-side platform? Digital media and marketing reporter Jack Marshall recently published a nice, clear explanation on Digiday: “DSPs allow advertisers to buy impressions across a range of publisher sites, but targeted to specific users based on information such as their location and their previous browsing behavior. Publishers make their ad impressions available through marketplaces called ad exchanges, and DSPs automatically decide which of those impressions it makes the most sense for an advertiser to buy. Often the price of those impressions is determined by a real-time auction, through a process known as real-time bidding. That means there’s no need for human salespeople to negotiate prices with buyers, because impressions are simply auctioned off to the highest bidder.”

ReachDynamics serves ads based on keywords.

Employing ReachDynamics involves selecting an advertising category and inserting a piece of code into the email template into which the ads are to be served.

ReachDynamics then scans the content of the emails for certain keywords, serves contextually relevant ads automatically and takes a cut of the resulting cost-per-click revenue, according to Castelli and Barnes.

“We operate much like the Google AdSense model where if the advertiser is paying a dollar [per click] we’ll pay 95 cents,” said Castelli. “This works out really well for the publisher because it motivates us to earn them more money. The way we earn them more money is by optimizing what’s displayed real time.”

The business model can work with any sized publisher, according to Castelli.

“We don’t put any constraints on volume,” he said. “Our target is wide open as to who we’re trying to attract, from the small guy who’s got a couple hundred people on his list to the big guys that are doing daily drops in the millions. We’ve got a fully stacked [ad] inventory so we can cover any category and any size newsletter.”

Barnes said he believes the market for serving ads into transactional emails is huge.

“Most companies view transactional as simply an extension of relationship/newsletter emails, but it is a much more powerful engagement tool,” wrote Barnes in an email exchange. “I think some companies shy away from expanding their transactional email because they only see the additional cost involved with growing their current email program. Once people learn there is a company like ReachDynamics that can easily turn their email program into a profit center I think the space will explode.”

According to the Federal Trade Commission, transactional emails, such as shipping and order confirmations, can lawfully include commercial content as long as the overall message is primarily transactional.

According to Barnes, ReachDynamics can put filters in place so a competitor’s offer doesn’t end up in a client’s transactional email.

On the surface, ReachDynamics would seem to be a competitor to LiveIntent, another third-party turnkey email-advertising solution. However, Castelli said he doesn’t view LiveIntent as a competitor so much as an alternative.

“LiveIntent versus ReachDynamics is like DoubleClick versus Google AdSense,” he said. “We have folks that have done the two in conjunction.”

ReachDynamics supports standard Internet Advertising Bureau ad sizes, said Castelli.

“[Clients] can go in and customize the colors and the look and feel of their ad units so they have a pretty large amount of control of how the ad ends up looking,” he said. “Placement depends on where the publisher is comfortable placing it.”

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Terms: Feel free to be as big a jerk as you want, but don't attack anyone other than me personally. And don't criticize people or companies other than me anonymously. Got something crappy to say? Say it under your real name. Anonymous potshots and personal attacks aimed at me, however, are fine.

Posted by: David Romerstein
Date: 2014-03-18 16:06:06
Subject: CAN-SPAM compliant? Probably. CASL... not so much

I don't think there have been test cases yet to determine how much commercial content can be in an email before it's no longer "primarily transactional" under CAN-SPAM. However, the Canadian law, CASL, is much clearer - ANY commercial content renders an email non-transactional. Companies working with ReachDynamics are going to have to think long and hard about the possibility that they may be sending to Canadian citizens (even those with 'American' email addresses, like stuff at Hotmail or Gmail) and that, if they do, they'll be violating CASL.

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