MarTech Startup SegmentStream Raises $2.7M in Seed Funding to Enhance Advertising in a Cookie-Averse Internet
UK marketing technology company SegmentStream has attracted seed funding worth $2.7 million, which the company announced in January 2022. Identified as lead investors for this seed capital round were Fort Ross Ventures, a seven-year venture capital fund based in Israel and California, and the OKS Group, which is an angel investors group that includes Dynamic Yield’s Liad Agmon and Pipedrive’s Ragnar Sass, Martin Tajur, and Martin Henk. A number of SaaS entrepreneurs also contributed to the funding round.
In its official Facebook page, the OKS Group posted details of the investment, saying that the group gave $1 million to help develop SegmentStream’s technical and product team and scale up the startup’s operations in its primary foreign markets, namely the United States, United Kingdom, and Western Europe.
What makes SegmentStream different?
SegmentStream stands out among other marketing technology companies because of its emphasis on addressing the challenges of running online ads in an internet that is slowly getting rid of cookies.
Back in 2021, Firefox and Safari announced that they have already phased out third-party cookies in their web browsers. Google made its announcement earlier, in 2020, through a blog post that declared the intention to make third-party cookies obsolete with its Privacy Sandbox initiative. The phaseout has since been deferred to 2023, though, in a move viewed as Google bowing to regulatory pressures.
SegmentStream aims to address the difficulties in determining attribution and return on ad spend (ROAS) for online advertising campaigns. For several years, cookies have been the go-to method to keep track of advertising activities and accounting. With the imminent departure of conventional cookies, the web advertising industry is looking for alternative ad trackers.
“The clock is ticking for marketers to find a viable alternative to cookie-based ad tracking,” says SegmentStream Chief Executive Officer and co-founder Constantine Yurevich. “It is technologically impossible to rely on the old cookie-based approach for the proper calculation of ROAS, since most advertising clicks don’t get the credit they deserve,” Yurevich adds.
It is not only the forced obsolescence of cookies that makes ad tracking challenging. There is also a growing aversion to cookies among internet users. While Google’s Chrome browser is slated to continue allowing third-party cookies until 2023, it is difficult to work with the public’s increasing antipathy.
“Digital advertising is undergoing massive changes, and we’re excited to partner with SegmentStream as they have the leadership and innovation needed to emerge as an industry leader,” says Fort Ross Ventures Founder and Managing Partner Victor Orlovski. Fort Ross Ventures has been looking for companies with disruptive ideas that address pressing needs, and SegmentStream is an excellent example of it.
Predictive marketing attribution and optimization
SegmentStream offers an out-of-the-box solution with its proprietary machine learning system designed to analyze first-party user behavior data to examine the incremental performance of every advertising campaign and marketing channel. The company refers to this mechanism as “Probabilistic Conversions,” which provides a good way to calculate the actual contribution of web traffic in sales generation.
Unlike other systems for cookie-less marketing attribution, SegmentStream does not reverse-engineer attribution. It does not determine attribution starting with conversion and moving backward. Instead, it employs predictive attribution powered by artificial intelligence, which makes it possible to recover conversions lost due to private browsing, ITP, and customer journeys that span more than one device or web browser.
With this system, it is possible for marketing teams to obtain valuable data that can then be inputted into ad platforms like those of Google and Facebook to optimize ad campaigns. This is very useful to marketing teams as it enables more accurate or precise measurement of marketing channels and advertising campaigns, some of which do not directly contribute towards sales.
This makes it possible to implement advertising targeting strategies. Also, it supports the leveraging of smart bidding systems capable of automatically learning from the conversions observed and identifying site visitors who are most likely to be converted.
SegmentStream’s system allows businesses to find out the real incremental impact of any marketing traffic without having an actual conversion. It can accurately predict conversion even if the conversion happens in a web browser or device that is different from what was originally being monitored by the system.
Moreover, SegmentStream allows companies to collect their marketing data into Google BigQuery warehouses for automated cross-channel ROI reporting that also removes duplications. It unifies advertising costs, site and app data generation, customer relationship management, and conversion information. Additionally, it supports the visualization of reports through preferred business intelligence tools.
A number of companies attest to the effectiveness of SegmentStream’s system. Kave Home, for example, reported seven times more conversions from Facebook Ads while reducing the cost of sales by around 50 percent. Freshly Cosmetics generated 146 percent more conversions from Facebook Ads while lowering the cost of sale by approximately 32 percent. Leading British cycle manufacturer Ribble Cycles, on the other hand, achieved a 260 percent increase in ROAS from Facebook Ads with the help of SegmentStream.
An alumnus of TechStars, SegmentStream already serves more than a hundred customers worldwide. Created by Pavel Petrinich, Oleg Katryshev, and Constantine Yurevich, the company is still relatively small with its 30-strong employee roster. However, it already operates across five countries and is planning to expand its operations and number of employees in 2022.