Online video ads are usually something people are forced to endure in order to watch the content they really want to see. But what if the celebrity in that advertisement spoke to you by name? And seemed to know personal details about your life?
That's the idea behind StarGreetz, a Los Angeles-based company selling a new breed of hyper-personalized advertisements. Advertising is broken, says founder and CEO Eric Frankel, and personalization is the solution. "Advertising is broken because my wife and I watch an hour-long drama or two from my DVR list and I don’t watch a commercial anymore," says Frankel. "Advertising is broken because I read four newspapers everyday and they get thinner and thinner."
Recent studies suggest that personalized ads do get more attention. Emails with personalized subjects are 22.2 percent more likely to be opened. And 35 percent of U.S. Internet users said they’d welcome personalized ads or recommendations online, according to a recent survey by ChoiceStream.
At StarGreetz, personalized messages can take the form of emails, Facebook posts, tweets, video ads, and more. During our interview, Frankel plays me a video featuring Reba McEntire, Nick Jonas, and Mike Tyson, who all address me by name. It grabs my attention, and not because I'm interested in what they're selling. I'm nervously wondering how they know that I live in New York, like taking long drives, and own a big cat. "This is just a brand giving you a better message," says Frankel.
As astonishing as it sounds, the technology is pretty straightforward. Say Macy's has 30 million people in its database, but only wants to reach women who like cooking in order to alert them to an upcoming sale. The company will make a commercial, but instead of using broad wording, they'll have the spokesperson tailor it to 700 or so names in their database.
Macy's will send StarGreetz the ad and then the company will upload it onto its server. Now, every time a customer clicks on a link, the appropriate ad will play. "When you click, built into that link is data about you," says Frankel. "It's a custom-made commercial that is playing for you." Put another way, StarGreetz has "bits and pieces of ads sitting in this giant editing system that recognizes who the user is and creates specific versions," he says.
StarGreetz actually started out as a personal greeting service with celebrities serving up personal ring tones, voice messages, and birthday greetings. In early 2012, Frankel decided to shift gears, after realizing that his technology could be applied to advertising--and that that's where the money was.
Now, big corporations such as General Mills to Sirius XM pay $20,000 to $100,000 per month to use Frankel's platform to make personalized ads. Frankel, who previously worked at Warner Bros. for 28 years, has already raised some $9 million in funding from Hollywood executives. Eventually, he hopes to secure more funding to launch a version of his platform for small businesses, BizGreetz.