Some e-commerce sites are so sophisticated that they treat users differently depending on who they are.
For example: A person in the middle of a workday who uses a computer with a Fortune 500 company IP address in a major metropolis to visit a travel site is served completely different options for purchase than an Apple computer user late at night logging on from a Midwestern neighborhood.
The site may assume the first person is less price-conscious with little time and provide a page with simplified flight options, while it pegs the second user as a visual person with more time and puts up a site with more graphics, vacation packages and ads.
Magnify360 Inc., an L.A.-based startup, develops technology that makes this possible. It is black-box software that can track an Internet user's behavior and characteristics, based upon 300 data points on each individual, to client Web sites. It automatically changes site content depending on everything from a user's online shopping pattern and type of computer to the time of day.
The product is sold to e-commerce companies, advertising agencies and lead generation companies.
"If we add up enough data points, we're able to tell who someone is very quickly even before we serve the home page," said Olivier Chaine, chief executive of Magnify360. "If you don't know who the person is how are you going to serve them?"
That is the driving question behind every advertising campaign seeking to snag the right customers in the online marketplace. What Magnify's technology does for e-commerce is a bit more cutting edge. It's like rearranging the layout of a store for every customer who walks through the door.
This kind of technology in e-commerce will help advertisers see better returns on the estimated $24 billion that will be spent on online advertising this year, said Suresh Vittal, analyst at Forrester Research.
Companies such as Magnify are vying for a piece of that advertising budget, which is mostly spent on search marketing and branding. Vittal said typical online advertising, based on search or media, gets people to a site but doesn't necessarily keep them there.
"The minute they come to the Web site, advertisers don't pay attention to them. These technologies are helping fix that," Vittal said.
Magnify's technology is innovative but not revolutionary, he said. There are others who do similar work. The nascent sector comprises about a dozen companies. Magnify's biggest competitors are Chicago's Amadesa; New York's X+1 Inc.; and a Omniture Inc. based in Orem, Utah.
One way to use Magnify's technology for e-commerce operations is to create a more efficient and inviting user experience.
Take TurboTax, for example.
Intuit Inc. is using Magnify's software to come up with profiles of three distinct types of users a novice tax filer intimidated by the system; a middle-manager professional familiar with the tax software looking for a fast, painless experience; and a tech-savvy filer, perhaps a banker, who wants a lot of information about deductions and exemptions.
The novice filer would get a page with photos of smiling people and words of welcome in big fonts. The familiar filer would be directed to a site with less content and more immediate buying links. The sophisticated filer may get a page with testimonials, tables and charts.
Intuit also uses this demographic information about its customers for direct-mail marketing for the TurboTax software.
Magnify charges the company for every unique visitor it profiles. For clients who simply seek to improve user experience on their sites, return on investment is less quantifiable.
It's more pronounced for companies that use Magnify for lead generation.
The company's software can clean up user data captured in lead generation campaigns by verifying phone numbers and titles, while cross-referencing them with other data points, such as IP address and shopping behavior.
This technology comes in especially handy for e-marketing services company Rhino Marketing in Canada. Magnify's software functions as a kind of filter for its global lead-generation search for high net-worth individuals as potential leads for an international financial services client. In a typical campaign, the company may see qualified leads among 25 percent of the names and contact information they gather. With Magnify's software, Rhino Marketing takes in 90 percent accurate leads of people its client is targeting, said Michael Davis, director of customer service.
For Roddan Paolucci Roddan, an advertising agency based in Palos Verdes Estates, market research is a nice by-product of Magnify's software that runs its client Web sites. Because the software adjusts in real time to user behavior, its also functions as an on-going market study for clients such as developer SunCal Cos., said Daniel Martin, managing director at Roddan.
Based on Magnify's demographic profiles of the types of people who are visiting a Web site for a new residential development, SunCal can also assume who its future residents may be.
"It has a way of affecting long-term decisions, like should they build a park where kids can play or a rec center for more of an aging population?" Martin said.
Aside from agencies, Magnify also works directly with corporations such as Citrix Systems, AutoDesk, Packet8, Bomgar and Continental Warranty.
Before launching Magnify, Chaine accumulated more than a decade of experience in Web analytics working as a consultant for the U.S. Department of Defense, Ticketmaster and Fox Sports. Most recently, he was the vice president of Web operations at LowerMyBills.com, which sold to Experian for $380 million in 2005.
He saw that despite the staggering amount of money spent on ads, conversion rate or the percentage of site visitors who respond to subtle or direct requests from marketers had dropped over the past few years.
"I saw this was because even companies with an unlimited amount of funds at their disposal were unable to create the perfect experience for each person coming to the Web site," Chaine said. "No one was doing it. This was a problem that needed to be solved."
Core Business: E-commerce marketing optimization technology
Employees in 2007: 22
Employees in 2006: 6
Goal: To create a customized online
experience for every Internet user based upon demographic profiles and to become a leading technology provider for national brands
Driving Force: E-commerce and lead
generation companies that seek better quality sales leads, higher advertising revenue and growth in Web traffic
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