The idea that companies can follow consumers around the internet based on data that someone else provides doesn’t seem like the best customer experience, according to Michael Blend, co-founder and chief executive officer of System1, a first-party data company. In fact, nearly all of its ad business is based on performance.
“Google and Apple are making positive changes for the longevity of digital advertising and people, and the advertising ecosystem just needs to catch up with them,” he said.
System1, founded about eight years ago, supports omnichannel customer acquisitions, which means it helps advertisers reach consumers across Google, Reddit, Pinterest, Snapchat, TikTok and other platforms through advertising.
The company is focused on intent-based marketing, where a consumer enters a search on a publisher’s site and stops to read an article about a specific subject.
“We never really liked third-cookie advertising -- it’s just not part of our system,” he said. “It’s not the best consumer experience when companies seem to know a lot about the consumer, but the consumer doesn’t know how they got the information.”
Then in 2018, System1 pushed its way into privacy and security, acquiring companies like Netherlands-based StartPage, a privacy-focused search engine that competes with DuckDuckGo, as well as Waterfox in 2020. It was once owned by Mozilla.
System1 also made a majority investment in Total AV in 2018, and will close on the acquisition when it goes through its special-purpose acquisition company (SPAC) with Trebia to become a public company. It should close by the end of this year.
When that happens, Blend said the company "will roll out new new subscription products in the privacy and security space, and do some decent size acquisitions to increase the digital marketing space where we're growing."
Several weeks ago, System1 increased its fiscal-year 2021 guidance for adjusted revenue to $778 million, from $741 million previously.
In the preliminary Proxy Statement filed by Trebia Acquisition Corp. with the U.S. Securities and Exchange Commission on September 16, 2021, the company reported for the first six months of 2021 combined revenues of $384 million, up 46% year-over-year, adjusted revenue of $385 million, up 50% year-over-year, net income of $24 million, versus a net loss of $12 million for the first six months of 2020.
System1’s advertising business generates revenue by using its RAMP platform to send customers to advertisers it works with. Advertisers then pay System1 for each click or customer sent their way. It finds consumers in more than 50 major advertising verticals. When consumer purchasing behavior shifts to favor certain segments like travel or mortgages or car purchasing, RAMP adapts to match consumers searches.
It’s newest direct-to-advertiser business let the company established direct relationships with advertisers like ADP and Quicken and send customers directly to them.
System1 also owns a network of websites, including HowStuffWorks and MapQuest. There are thousands of articles on HowStuffWorks that match the original advertisements and enable users to make an additional connection.
Once a user clicks on an advertisement about a particular product, then enters a search or reads an article on one of the websites, and then clicks again to go to an advertiser, RAMP detects with a consumer is ready to make a purchase.
On search-based properties like Info.com or MapQuest, users express their intent by entering the actual term or product based on search terms.