Inuvo Inc. Asks Why, Not Who

Richard Howe, chairman and CEO of Inuvo Inc., at the company’s headquarters in downtown Little Rock. (Steve Lewis)

After building his career developing technology to identify consumers for targeted advertising, Inuvo Inc. CEO Richard Howe is heading in exactly the opposite direction.

Now he doesn’t care who, but why.

Howe helped Charles Morgan build Acxiom into a $2.3 billion company with methods that identified customers and their habits for advertisers. But times have changed. Internet users want more privacy, and web-tracking browser cookies are in decline.

So just as the market was ready for Howe and Morgan to capitalize on the rise of cookies in the 1990s, now times are ripe, Howe thinks, for Inuvo to profit from a patented artificial intelligence technology that maps concepts, not individuals.

Called IntentKey AI, the technology reads everything on the internet to deduce why someone might be viewing particular web content. Then it places appropriate ads in front of users by applying “the collective wisdom of humanity as seen on the internet.”

“I know it sounds grand, but it really is just that,” Howe said. “Our technology reads every single piece of information on the internet, I mean billions and billions of pages about everything, and uses that information to create a map of concepts.” It continuously reads all the data out there, mapping topics and their relationships. Then it uses that analysis to place ads. The technology is known as large language-based AI, which sifts through vast quantities of written language and textual data, applying deep-learning algorithms to interpret them.

How It Works

Here’s an example.

George Schultz, the former U.S. secretary of state, has been largely out of the headlines for years except for being on the board of Theranos, the blood test company whose collapse put Elizabeth Holmes in prison for fraud. Inuvo’s technology might surmise that someone looking up Schultz is doing so because of his association with Theranos. “The AI will know this association even if Theranos isn’t mentioned on the webpage about Schultz,” Howe said.

The AI might also guess that the user associates the Holmes story with The Wall Street Journal, which broke the news and won multiple awards for it. Voila! The user sees an ad for a subscription to the Journal.

In another example, the AI could put ads for audio-based sleep aids alongside web pages about owning pugs, because the dogs’ notorious breathing problems tend to keep their owners awake at night.

“This technology is in the same category as ChatGPT and Google Bard,” Howe said from Inuvo’s headquarters in downtown Little Rock. “We developed it to effectively read all of the information available on the internet and to use that knowledge to accomplish its goals.”

The company, whose stock trades under the symbol INUV, had revenue of $75.6 million in 2022, but a net loss of $13.11 million. It ranks 11th on Arkansas Business’ public companies list, based on net income. And Howe says the market is catching up to Inuvo’s AI technology.

‘Privacy Friendly’

“We were created as a group of engineers who had a vision related to consumer privacy, specifically the use of consumers’ private information for advertising, which has been the standard for at least two generations,” Howe said.

He knew the private information business model well, because he and his team had been a part of building Acxiom Marketing Solutions, the Conway company that was sold in 2018 to the Interpublic Group of Cos. in New York for $2.3 billion. Morgan, Acxiom’s former chairman and CEO, is on Inuvo’s board of directors. The company has about 100 employees and major offices in Little Rock and San Jose, California.

“We knew at some point that using consumers’ private information for locating and targeting individuals online with ads was probably going to come to an end, but we didn’t know exactly when,” Howe said. Privacy was becoming a more important consideration for individuals, governments and larger companies. “So we went about building a technology that could replace audience identification without having to use any consumer information or consumer identifiers.”

Browser cookies are already useless on browsers like Apple’s Safari, and Google has been working on banishing them for some years, Howe said. Growing use of virtual private networks, or VPNs, also renders cookies ineffective, he said.

“What that means is that the use of personal identity to do targeting is going away, and the market, if you will, has caught up with us. We’re sitting here with one of the very few technologies that actually can still find and target audiences, but do it in a way that’s privacy friendly.

“We’ve moved from trying to figure out who someone is and then targeting that person to moving to deterministic artificial intelligence that can figure out why someone might be in front of the screen without knowing anything about who they are.”

‘Writing’s on the Wall’

The AI is powerful and effective, he said, and protected by about 20 patents.

“Our opportunity is huge. Something like $250 billion to $300 billion a year is spent on [domestic online] advertising, and if advertisers are unable to target consumers based on who they are, which is the way it has been done for two generations, they’re going to have a problem,” Howe said.

At least five states have instituted identity-based privacy policies, including the California Consumer Privacy Act. “The writing’s on the wall,” Howe said.

Without tracking, advertisers without a new method are going to see their effectiveness evaporate.

Other companies like Appier and IBM Watson are operating in the space, but Howe said Inuvo is “one of only a few companies with a technology that’s proven itself to work, and in fact works better than the identity-based technologies.”

Based on a metric of return on ad spending, companies switching to Inuvo have improved ad performance by about 50%, Howe said.

The company has two channels to market the new technology: by empowering ad agencies with the tools or going directly to potential clients, he said.

The CEO said he wants people to know the company is in Arkansas, and that it has many employees here. “We have our own data center,” he said. “We’re not small, but we need to get bigger.”

In May, Inuvo launched a technology, called Media Mix Modeling, that uses AI to help brands and ad agencies determine the optimal media mix for campaigns. The technology was in beta testing for almost two years and is now available to clients and prospects. The technology uses historical spend-and-performance metrics to concoct an “optimal media mix for any budget,” the company said in a news release.

Asked if timing is the key, Howe answered “yes, and really, hell, yes.”

The best technology in the world can still fail if the market isn’t ready for it, he said. “We not only have great technology, but now the timing is aligning with us. That doesn’t assure success, but it sure increases the chances of success.”