Sramana: Can you give us some use cases as examples?
Adam Singolda: One example that I really like is Ancestry.com. It is a brilliant example of the future. Today 70% of the $110 billion in advertising are ROI performance-driven spends. The likelihood of that changing is very small. Ancenstry.com offers subscription services and they are able to create engaging, high quality content. They are able to scale with us by offering people who may not know how much they would enjoy searching out their family history content targeted to their interest. Those people find the content very interesting. Even if they do not join, they will show signs of interest such as Tweeting their content. We can then re-target some of those people as well.
In the real world you would never buy a phone because I showed you a picture of a phone. You would like to be educated on the product and you would read about it. You would likely play with it at a store. Eventually, you will purchase it. Online media is very inefficient at understanding how that process works over the Internet. Our technology helps identify those real life experiences that occur online. We engage first in education which leads to increased credibility and allows consumers to engage in the process by consuming content. If a dollar is better spent on content than it is on display then it gets really exciting. That can scale.
Sramana: I am a huge believer in content marketing. I think people engage much better with content than with “in the face” advertising.
Adam Singolda: Initially, we had clients who started spending thousands of dollars a month. Now, we see some clients spending millions of dollars a month. People are only going to spend like that if it works. If companies do not have an efficient way to grow and audience, then they are going to have a problem. The people who see success today are companies who have a strong reputation engine surrounded by a strong content.
Sramana: Did you finalized your business model before you raised the $9 million round of financing?
Adam Singolda: No. When I started the company, I thought I was going to disrupt the recommendation space. After that, I thought we were disrupting the advertising space. Now, I think we are building a discovery category that is even bigger than advertising. Perhaps in 5 years, we will be recommending what to eat when you go to a restaurant.
Sramana: You have a lot of the same characteristics as search, meaning that it is a mathematically proven ROI. Those kinds of models scale because people know what yield their investment will have.
Adam Singolda: This is the sweet spot of the web. There are hundreds of ad networks who work as an agency. At the beginning of the month, they hope to sell what they sold the month prior. Most advertising is about optimizing advertising performance. We have zero ad ops people amongst our 140 employees. If we were a public company, we would be one of the top 5 companies in terms of revenue per employee.
Sramana: You have gotten to a point where you can build a very significant company. Congratulations on your success, its well-earned. I love what you are doing and wish you the best of luck as you continue forward.