Steelhouse backs up ad-tech hype with real data. Reports 21% click-through rates

By Michael Carney , written on January 23, 2013

From The News Desk

It’s one thing to launch a new product and extoll its many powerful features. It’s entirely another to back those promises up with concrete results. Steelhouse got the first part right with the September launch of its A2 ad-creation platform (pronounced a-squared). Today, it’s serving up a steaming hot plate of killer metrics to address the latter.

According to figures released by the company today, brands combining A2 with its Real Time Offers (RTO) product in Q4 generated click-through rates of 21 percent, compared to just 4 percent with Real Time Offers and display ads. Conversion rates under the combined product reportedly increased 300 percent as well. Those using just the A2 adds saw click-through rates of 1.8 percent, compared to 0.3 percent for standard display ads.

So what’s the method behind this magic?

“It all comes down to smart marketing, dynamic and visual content, and data intelligence to match offers and messaging with the right customer,” says Steelhouse founder, president and CEO Mark Douglas, the former eHarmony VP of technology.

Steelhouse allows brands to create visually stunning ads – featuring branded video, custom fonts, product carousels, and countdown timers – via a drag-and-drop wysiwyg interface at a fraction of the time and cost of standard rich media content development. These creative assets are then combined with retargeting and on-site offers, which can be installed with a single JavaScript tag. The idea is that an advertiser wraps the consumer in a consistent brand message, with as many channels and touchpoints as possible.

“It’s like a boxing match,” Douglas says. “You can’t just throw one punch every 30 seconds. You have to throw a flurry of punches.”

Steelhouse works with large brands including Rosetta Stone, Figi’s, Creative Labs, Monoprice, North Face, Coffee Bean and Tea Leaf, and Toms Shoes, as well as countless others that it’s not at liberty to disclose publicly.

Rosetta Stone Digital Marketing Lead Caitlin Romig confirms the above performance metrics, saying, “As a result [of combining A2 and Real Time offers], we saw a 32 percent lift in revenue per visitor and an 18 percent click-through rate on one of our Cyber Monday promotions."

Douglas says that results using A2 have been so compelling that it’s getting to the point where it’s not optional for Steelhouse clients to use the product.

“If you want to work with us you have to touch the consumer in multiple places,” he tells me (without a hint of Sandusky humor). “I say to my customers, ‘So you’re telling me you don’t want the headlights on this car, even though you’re not going to be able to drive at night?’”

Early results, however, are just that. The challenge will be to keep up the same level of performance once online consumers begin seeing these rich media ads everywhere, both from Steelhouse clients and those of its competitors. A2 and RTO are great products today, but ad-tech moves in cycles. Also, the cost and time efficiencies created by A2 are likely to be commoditized going forward as design technology grows more powerful across the industry. The company will need to continue innovating if it hopes to maintain this lofty performance.

The next area of interest for Steelhouse is look alike targeting. In this way, the platform can drive targeted new visitors to a brand’s site by finding those consumers with common attributes to existing customers – such as where they browse, and what they read. The company is already dabbling in this area but plans to roll out a formalized product in 2013. Look-alike targeting alone is not that interesting, Douglas tells me. But when combined with A2 and RTO, the company has been seeing “really compelling results.”

Los Angeles-based Steelhouse has raised $15.8 million in outside financing, including $8.25 million from Qualcomm Ventures, Greycroft Partners, Baroda Ventures, Rincon Venture Partners, SV Angel, and Daher Capital in July 2012. The company has approximately 100 employees and recently opened a European sales office in London.

“Most customers are already sitting on a gold mine: their data,” Douglas says. “Mining that data and knowing how to convert it into revenue is our specialty.”