OptiMine Software is a Chanhassen-based data mining and intelligence startup applied in the advertising and media optimization space.
The company’s current product, OptiMine Paid Search Bid Management, forecasts the daily performance of online paid search ad placement and automatically sets optimal future bids. “Everyday the software fires up, it pulls in all the data through yesterday and basically simulates tomorrow,” says CTO & Co-founder Rob Cooley.
The patent-pending method first uses automated data mining to develop individual performance models for each ad placement, and then optimization techniques to set bids to meet an advertiser’s lead generation or customer acquisition goals. All this happens while satisfying pre-established business constraints such as minimum ROAS or maximum spend. Ideal for companies that have an existing paid search program in the tens of thousands to millions of keywords, this startup’s early customers include a diversity of orgs like Wells Fargo, Overstock and Scottrade — amongst others. The technology can be implemented in-house, hosted, or as software-as-a-service (SaaS) and is priced either based on the volume of keywords or as a percentage of adspend.
One “finance customer in the loan business” reported 30% more approvals and lowered cost per approval by 38%; another, referred to as “a lead generator in the travel space”, drove 63% more bookings and netted 30% greater profitability through OptiMine. Sounds impressive.
While Paid Search Bid Management is the go-to-market, OptiMine has ambitious plans. “The technology is all about media buying. As we grow, we will expand across multiple channels and flesh out the optimization capability.Display advertising for internet is obvious and beyond that — television, radio, even outdoor…all these channels are adding in better data collection mechanisms,” Cooley explains.
“For us, the interesting part about getting funded is we that we had [fully functional] software, obtained customers, have been generating break-even revenue, and received great testimonials. Even with that, finding the right VC was a challenge for the better part of this year. If that doesn’t describe the current funding climate…but, we didn’t want just money — there’s more to it than that. The issue we ran into on Sand Hill Road is that we didn’t need $20m. We were literally told ‘this is fantastic, do you think you could come up with a business plan that needs more money?’ Then we were introduced to Calumet and it was just a good fit as they really met what we wanted in a venture capitalist.”
“A great resource for us has been the University of Minnesota and I think that it’s the best thing about being [a tech company] in the Twin Cities, is this talent pool,” says Cooley, who holds a PhD in computer science from the U of M (in addition to degrees in civil and nuclear engineering). Prior to OptiMine Software, he was the VP of Technical Operations for data mining software company KXEN where he worked alongside OptiMin Co-founder Doug Bryan (Bill Ferguson is also a Co-founder). Before KXEN, he was the Director of Data Mining for Outride Inc., a Xerox PARC spin-off specializing in personalized search technologies that was sold to Google in 2001.
“The hard work is par for the course…the biggest challenge for us has been our business need of selling software in the face of other companies that have [much larger marketing budgets] yet far inferior technology. With our recent funding, we are hiring a CEO and expanding our sales and marketing staff to take it to the next level.” — OptiMine Software CTO and Co-founder Rob Cooley.
Tune in to the podcast for all the details! To meet Rob in person and hear firsthand what it’s like working as a software engineer for a startup, come to the U of M Master of Science in Software Engineering (MSSE) Event on December 11.