Mpire Drops Widgetbucks, Switches Strategy to Be All About Optimizing and Verifying Online Ads

2/3/10Follow @gthuang

It has certainly been a busy week in the online advertising sector. On Monday, Bellevue, WA-based BlueKai announced it had raised $21 million in Series C funding in its effort to help transform how companies use customer data to design ad campaigns. And Seattle-based ad technology startup AdReady has formed a partnership with Internet radio service Pandora, based in Oakland, CA, to help the company design and sell advertising to small and medium sized businesses.

Not to be outdone, Seattle-based Mpire is announcing today a major update to its relatively new ad-optimization technology, called AdXpose. The basic idea is to make online ad campaigns perform more effectively, while protecting brands from fraud and from appearing next to inappropriate content such as porn. The latest features of AdXpose include the ability to set smart, real-time alerts for when ads don’t appear where they should (geographically or demographically, say), and preemptive “blocking” that stops ads from being served when the placement violates the terms of the advertising contract.

But Mpire is about more than just its latest product offering. It has bigger ambitions beyond AdXpose, and has reinvented itself as of late. I recently got an in-depth tour of the company’s new focus and strategy. In the process, I learned a lot about the online advertising world—and where Mpire’s real opportunities are.

When I spoke with Mpire last April, then-CEO Matt Hulett had just begun to sell AdXpose to online publishers and advertisers. Back then, Mpire was known for its flagship advertising network, Widgetbucks. Hulett left the company in August to become an executive at RealGames. Since then, Mpire has focused solely on technology for optimizing ads and helping its customers—ad agencies, ad networks, publishers—monitor how their ads are performing.

Mpire’s chief revenue officer, Kirby Winfield, sums it up pretty succinctly. “We are AdXpose. Widgetbucks is on life support,” he says. “Now it’s about [ad] verification and optimization. We want to be the Omniture for advertising and online, specifically within display.”

Lest anyone wonder if Widgetbucks might still make a comeback, Greg Harrison, Mpire’s co-founder and chief technical officer, says ad networks now lie in the “commoditized portion of the ecosystem.” “It’s not a very high-value business to be in,” he says, in part because there are “too many of them.”

To understand the online advertising world—it’s gotten quite a bit more convoluted in the past year or two—requires being familiar with ad networks, ad exchanges, ad agencies, demand side platforms, and a lot of other nebulous terms. The diagram of the advertising ecosystem that Winfield drew on a whiteboard for me was one of the more complex flowcharts I’ve ever seen, with interconnections like so many strands of spaghetti. Suffice to say, ads get recycled up and down the chain until the people running the campaigns can no longer track how they’re performing; there’s little accountability; and brands sometimes have to shut down entire campaigns without knowing why. It’s the kind of thing that can cost ad agencies tens of thousands of dollars a day.

And that’s Mpire’s real opportunity. If its technology can monitor how ads are doing in real-time—and where the problem spots are in campaigns (and who’s to blame)—then it stands to get a steady flow of business from big-name brands and ad agencies. The challenge, of course, lies in making the technology very easy to use, and—crucially—always fair and accurate.

“There is a mission here,” Harrison says. “It’s about cleaning this mess up and making it safer for advertisers to bring their spend up online… It’s about growing the pie, by bringing safety, accountability, and transparency to this segment, to promote migration of online dollars.” He adds, “My personal passion is cleaning the mess up. There are so many bad actors. Every day one of them dies, and I celebrate.”

Mpire is backed by venture firms Ignition Partners and Draper Fisher Jurvetson. The company currently has 18 employees—15 in Seattle—and small offices in New York and San Francisco. The Seattle team is planning to move from its current digs on Westlake Avenue to 3rd and Union in downtown as of March 1. That will help the company be closer to ad agencies, and key customers like Razorfish.

“We are solely focused on servicing Fortune 500 brands and major agencies,” Winfield says.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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