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TC50: 5to1 Lets Publishers Regain Control Over Unsold Ad Inventory

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Remainder aka remnant advertising are not exactly widely known terms, but the average person browsing the web for content knows perfectly well what it is. Anyone who’s ever browsed their favorite news site and has been exposed to advertising units that seem totally off base with the publisher brand, or even completely – even if unintentionally – juxtaposed to the content that’s being viewed has been a ‘victim’ of ads that were placed just to fill up unsold ad inventory, which is what remnant advertising comes down to.

5to1, a startup with a high-profile founding team that includes former Fox Interactive execs Jim Heckman and Ross Levinsohn, has raised $4.5 million in seed funding to work on a solution that can turn remnant advertising into premium advertising. The company’s breaking out of stealth mode today at TechCrunch50 with a service that could rid both publishers and advertisers of the extremely ineffective ad campaigns that are basically only beneficial to the networks selling them.

The 5to1 system allows publishers to get in between the remnant networks and the ad inventory to give them more control over what will appear on the site, where and when. The company’s founder and CEO Jim Heckman dubs it a “Match.com meets iTunes for advertising” because it allows publishers to dynamically create ‘playlists’ of ad units of sorts and easily run both proper ads and potentially placeable remnant ads on variable places on their website(s).

Ultimately, the goal is to make it easier for content publishers to increase the quality of – and with it, the revenue that comes from – the ads that appear on unsold inventory without too much hassle. And if it takes off we’ll see a lot less of these horrible screaming ads that you’d never click on even if they held you at gunpoint.

Expert panel Q&A:

Q – Marissa Mayer: At Google, we agree that optimization can be done. However, what technology do you have for matching content to advertising, and how can you provide for larger-size networks with lots of inventory?

A – Jim Heckman: We’ve been in stealth for a year, but we’ve noticed that publishers like hearing about being able to match advertising with context and having control over it. We didn’t want to compete with the Google model, but we’re more like iTunes: you ‘play’ ads whenever you want. It’s no different than what Web 2.0 has done for content. So if you’re a tech blog on gadget, you can see what ads work for gadget news sites specifically. It’s not algorithmic, but more of a marketplace.

Q – Roelof Botha: Can you demonstrate better CPMs?

A: We can find ads so fast, even with hundreds of thousands of ads in the system, literally in seconds. You can drag and drop ads right in the rotation. We talk to publishers and they tell us that even if we get similar CPMs but just prettier ads that don’t curse with the content, they’d already be happy. But talk to us again in six months.

Q – Tony Hsieh: Does it take a lot of time for publishers to deal with your system, and what about scale?

A: We showed publishers in our beta test that it doesn’t take a lot of time to manage their advertising units on unsold inventory. They want to be involved, and they seem to be motivated with the speed of our system. The key thing is: the compiled results of the entire network shows the context of just one ad in seconds.

Q – Paul Graham: Humans can only do worse than the best optimization, right?

A: Pages are dynamic. What we found is that a vast majority of ads are not contextual, and we can fix that.

Q – Marc Andreessen: Regarding the chart, which side do you lean most to?

A: All inventory is not created equal, but I’d say just in the middle.

Video:

http://www.ustream.tv/flash/video/2162967

Pictures:

Other coverage:
TC50: 5to1 gives publishers more control over their ads VentureBeat.

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