In an exclusive interview with VC Cafe, Levy Cohen, CEO and Founder of Israel/US based Collarity, provides insights into the company’s value proposition, future plans and lessons learned along the way.
Founded in 2005, Collarity has developed a comprehensive content monetization platform for web publishers. What does it mean? Collarity is basically a web service connected to a publisher’s site, providing visitors with search results, recommendations and ads based on media consumption and ad response patterns of previous visitors. This results in higher page views and optimized monetization.
To learn more about Levy Cohen and Collarity, read the conversation transcript below.
1) Levy, in a few words, can you explain what Collarity is?
LC: Collarity is the most complete content monetization platform for web publishers, including search, analytics, syndication,
behavioral ad targeting and the logged interaction of the users with the publisher’s content.
2) Would you please walk us through the business model?
LC: Installing Collarity on a website is absolutely free for the publisher. Collarity only shares the incremental revenues generated by the platform’s implementation on the website. In other words, we split the extra income generated through Collarity with our publisher partners.
I’ll give you an example: a publisher had 1M page views before collarity, and a $2 effective CPM. This site would make $2000 a month.
We (Collarity) add more page views, say 1.2M views. Keeping the same CPM he would now get $2400 a month. On top of everything the conversion goes higher through our platform. It goes from $2 to $3, so now you are talking about $3600 a month.
3) That’s really interesting. How do you track and optimize the ‘incremental revenue’ exactly?
LC: Collarity’s business model has three levels: reporting, analytics, improvements.
a. Reporting – Collarity offers a wide array of services that can be installed by the publisher such as suggested stories, related video, restricted search and more. All the interactions of the users with these widgets are logged, including conversions around the widgets (click troughs) and advertising click-troughs.
b. Analytics – Collarity provides an analytics portal to its clients. At any given moment the client is able to track the communities, areas of interest, popular pages and the keywords that attract these communities. Clients can then take these analytics and do a more efficient keyword buy, etc.
c. Optmization– Collarity optimizes for the client cause we “know” the users. Placement of the widgets is also important. Clients run A/B testing to find the best mix.
4) What are the ads being served on the client site? does Collarity have its own online ad network?
LC: It’s a very flexible model – the publisher can have his own relationship with advertisers. Collarity will show any type of ads.
i. A publisher may have relationships that they want to promote (look-smart, Overture, etc) Collarity will show it.
ii. Publisher doesn’t care in which case Collarity decides on the best solution.
* Note: The ‘advertiser’ section in Collarity’s website indicates that “Advertising is an optional service we (Collarity) provide for our website customers.”
5) As you are competing with other services on a fundamental functionality of the publisher’s site, what are the main benefits you provide the publisher?
LC: There are several dimensions of value for the publishers:
ii. Publishers don’t pay anything for the service.
iii. Everything comes from the interaction of the users with the publisher’s site. He’s making better use of his content and increases stickynes.
iv. Collarity provides better content consumption and more page views, which translates into more revenue. Collarity only splits the incremental part of the overall revenue.
6) I’m assuming that you are probably picky when it comes to choosing your publishing clients. Who’s your target market right now?
LC: Our current target audience are large publishers with more than 4-5 million unique visitors a month and approximately 50 million unique pages a month. Mainly entertainment and media domain market space. There’s a few hundreds of those so there’s enough content.
At this moment are our publishers include – All Fox Interactive TV stations including Fox on Demand, Pearson Education, Crain’s Chicago Business, V-me (a Spanish property) and Ynet News, the 2nd largest portal in Israel.
7) Looking back to the time you’ve started Collarity, what lessons have you learned along the way?
a. Positioning – If you position yourself as a keyword search company you are immediately compared to Google, Yahoo and Ask. It’s an important challenge and we are related to search, but it’s not the main point. The point is how you make the content relevant.
b. One stop shop – It was important to provide a complete solution that will fit well in the Eco System. We found a way to cover all the needs of a web publisher in one site, partnering with almost every major player in the ad inventory space. We’ve partnered with Marchex, Quigo, Looksmart and almost everybody else. When a publisher looks at us, he sees his needs covered.
c. Make publishers life easy – We saw companies who tried to go to web publishers. One of their challenges was the need for IT. Collarity does everything with no integration whatsoever. The client only needs one line of Java Script to start using our service and you can be up and running in just a few hours. Publishers can also customize the visuals that we provide.
8) You have an international team located both in the US and Israel. What are the main challenges and opportunities of this structure?
LC:We have the bulk of our engineering team in the US, with some key members in Israel. The obvious challenge is, of course, communication between distributed team members. We use the standard internet communication tools to keep dialog channels open and to facilitate collaboration. We also try to have team members spend between 1-3 weeks together physically, on one side of the globe or the other. The opportunity is to take advantage of the unique development skills in each region and the ability to maintain 18 hour tag-team development days.
9) Can you tell me about the funding of Collarity. How much was raised so far?
LC: Collarity is currently privately funded; figures not disclosed at this time.
10) Lastly, what are the five internet services you can’t live without?
LC: Email, Skype, IM, Acrobat Connect Web Conferencing and FTP
In case you need more proof that this is company has a lot of promise, Collarity was recently awarded as one of the top 17 innovators in search and also named an AO Media 100, one of the hottest 100 private high-tech companies ranked by Always On Media (see press release). If you want to see Collarity in action, Levy will be accepting the award at OnMedia NYC in the Mandarin Hotel, New York City on January 28-30.