Retargeting Firm AdRoll Secures $15 Million in Funding

Company Was an Announced 'Facebook Exchange' Partner

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San Francisco-based retargeting firm AdRoll, which enables customers to show display ads to users who've visited their website to coax them into completing a purchase, has raised $15 million that it intends to use to scale its technology stack and staff up.

AdRoll CEO Aaron Bell
AdRoll CEO Aaron Bell

Founded in 2007 with a different business model, AdRoll switched to retargeting in 2008, according to founder and CEO Aaron Bell. It captures anonymous data from a marketer's website -- including pages viewed, time spent on the site, and what items were put in virtual shopping carts -- and buys inventory on ad exchanges in a real-time bidding environment in order to digitally tap users on the shoulder and remind them of their interest in a product or service during their wanderings across the web.

In practice, visitors to a retail site might see a shirt they had looked at in a display ad days or even weeks after the fact. The ad might even offer a discount that could grow the next time the user saw a retargeted ad for that product if he resisted the first time.

"People don't have the same banner blindness with retargeted ads," said Mr. Bell, who noted that rules for effective retargeting vary depending on the advertiser. For example, an advertiser who wants to show a hotel offer to someone who's bought a flight on their site should do so quickly when travel is still top of mind for that person, while an automaker or luxury-goods seller doesn't necessarily have to rush.

AdRoll was one of the announced launch partners last month for Facebook Exchange. The social network's real-time ad exchange will enable advertisers to target users who've visited their sites on Facebook by enabling DSPs and retargeters who work with those marketers to sync cookies they've dropped on users with a Facebook cookie. Mr. Bell declined to comment on the relationship.

Mr. Bell said that AdRoll has about 5,000 active advertisers, most of which were midsize and long-tail companies in the company's early years, but it's more recently begun to take on more major brands, such as Microsoft, Netsuite and American Apparel. The company has 85 employees and became profitable late last year, he said.

Retargeters such as AdRoll and Criteo are doubtlessly watching AdRoll client Microsoft for clues on whether it will back down from its stated intent to make do-not-track a default setting for the newest version of Internet Explorer. If the industry embraced such a standard, it would put companies that deploy ad technology based on cookie tracking out of business, though that 's still a far-fetched possibility.

"The industry's 'do-not-track' proposal is the one that 's going to prevail, and we think that 's good for everybody," said Mr. Bell.

Foundation Capital led the $15-million round, which includes funding from previous investors Merus Capital and Accel Partners. AdRoll declined to say how much funding it had previously received; it raised a $4 million seed round in 2008.

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