Mpire Makes Strategic Shift, Unveils Ad-Optimizing Service

Seattle-based Mpire is rolling out a new online-ad optimizing service today, aimed at letting advertisers, marketers, and publishers more accurately assess how well their ads are working. Matt Hulett, Mpire’s CEO, is announcing the technology, called AdXpose (Xconomy loves names with “X” in them), at the AdTech San Francisco conference this morning. But this isn’t just a prominent software startup launching a new product. This looks to be a strategic move in a new direction, one that promises to shake things up for Web advertisers and publishers alike.

It’s a big step for Mpire, and “a bit of a shift,” Hulett admits. “As a young company, you have to be careful about doing too many things. We’re not known for being advertiser-focused,” he says. “It has my Spidey-sense tingling in a good way.”

Mpire made the switch from an eBay seller-tool business to an ad network in 2006, when Hulett took the helm as chief executive. Its flagship product, Widgetbucks, now serves up 1.5 billion monthly ad impressions via the websites of some 26,000 publishers. But just over a year ago, Hulett and his team noticed a big problem with online ads. If you use an ad network to market your brand, you don’t know where your ads are being placed, how they’re performing, or how customers are behaving on those pages. Hulett says that according to a PricewaterhouseCoopers report last year, 30 percent of the ad market consists of ads that are never seen—which translates into a wasted $3 billion.

So Hulett’s team got to work building sophisticated ad-tracking technologies using a technique called “asynchronous event logging” (which had the unfortunate internal acronym of “ASEL”)—originally to make better ads for their own ad network. Basically what the software does is track the placement and distribution of ads, as well as where customers click, and even where they hover their mouse. “It helps identify where ads are being placed and what consumer behavior is going on inside those ads,” Hulett says. “A lot of that data is generally not available…At the end of it, I thought this would be really interesting for agencies, ad networks, and publishers. People want it to better optimize their campaign.”

And what’s the payoff to Mpire? “If you can build smart optimization technology, between ad networks and publishers, there’s a lot of value to be captured there. You don’t need a big sales team to go build a big ad network. It’s a big opportunity there. It’s a way to grow volume without huge capital expenditure.”

In terms of new competitors, Hulett wasn’t specific, but he mentioned there are a handful of startups working on similar technologies—but none of them have yet rolled out a product. Mpire’s new area of focus did make me think of Yieldex, the New York-based inventory management and analytics firm backed locally by Madrona Venture Group and Amazon, but it’s not clear whether the two startups will compete in the same advertiser space.

So far, AdXpose has been tested in private beta trials with about 300 million impressions, in partnership with advertisers like Jones Soda and Keen Shoes, ad server and exchange operator OpenX, and publishers (a division of MTV) and Seattle-based Wetpaint. “It’s been a while since I launched something that made me a little nervous,” Hulett says. “This hasn’t been introduced before. It’s a big topic now—more accountability and transparency. People have a strong opinion about this technology.”

This morning, Hulett says, he’ll probably show a test account, like the MTV site, to a room full of publishers to introduce the new service. High risk, high reward. “I love live demos, with real data,” he quips.

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