• by Laurie Sullivan  @lauriesullivan, March 22, 2010

Ad retargeting typically conjures up images of display ads, but one seasoned ad executive has developed a retargeting platform based on search.

Magnetic Founder Josh Shatkin-Margolis will launch Monday a retargeting platform that relies on search data to determine intent. The former DoubleClick and Yahoo lead architect designed the platform to more accurately retarget ads for display, video, and more.

The platform relies on a semantic Web design to generate keywords that map to related words. Each have been assigned a "unit weight" to aid in determining intent and targeting precision. For example, the words "car insurance" might have a unit weight of 80 and map to the words "automobile insurance."

Think BlueKai and eXelate to understand the retargeting model. Magnetic has been testing the platform by selling search data to about 40 ad networks, publishers and ad exchanges that provide target criteria. Each provide Magnetic with a retargeting pixel.

Shatkin-Margolis believes Magnetic could aid publishers in getting a higher CPM for ad inventory. He explains that publishers can create retargeting strategies for display ads based on site search data by simply requesting a retargeting tag from the trafficker, setting the parameters in the Magnetic platform and embedding the pixel tag in the Web site.

The platform compiles data from search engines and Web site partners that serve search ads and applies the campaign data to Web sites. It ties these search terms to the terms people use on sites to target display, video and other types of ads. "We find that with search retargeting, which is different from search engine marketing, you can cast a wider net," Shatkin-Margolis says.

That "wider net" enables marketers to build ads that attract people searching for credit reports, as well as information on bankruptcy and home loans, a tactic that is not feasible in SEM.

For example, if Experian runs a credit report search campaign on Google, the company would only buy keywords specific to the words "credit report," although marketers would want to buy words that reach people searching for home loans, car leases or bankruptcy.

Shatkin-Margolis says it cost too much, and Google requires marketers only to purchase keywords relevant to the person's search.

Building the platform did not come without challenges. Merging the two forms of advertising proved difficult, Shatkin-Margolis says. Search focuses on keyword lists. Display relies on creative pieces. Search targeting serves ads to the person searching based on keywords at the moment they search. Retargeting expands the reach to people who have searched on specific keywords in the past. All these factors led to tests, trial and errors while developing the platform.

Magnetic also plans to announce today a seed funding round of $1.25 million led by venture capital firms NYC Seed, and IA Capital Partners.