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Capital-Efficient Customer Acquisition, Company Building: ReTargeter CEO Arjun Dev Arora (Part 3)

Posted on Saturday, Jan 28th 2012

Sramana: What type of companies were you looking for? Did you have a particular market segment you built your concept around?

Arjun Dev Arora: Our segmentation was really built off pricing. We started selling the product at $500 a month. That automatically cut out a lot of the very long tail such as plumbers and restaurants. It took away smaller local companies and allowed for small to medium-sized businesses to find us. Those are the companies we were looking for out of the gate.

Sramana: What service was a company able to get for $500 a month?

Arjun Dev Arora: It was approximately 150,000 to 200,000 impressions a month.

Sramana: How high were the CPM rates?

Arjun Dev Arora: They were in the 2.50 to 3.00 range to re-target users.

Sramana: What kind of conversions do you see with your technology?

Arjun Dev Arora: When we show impressions, we see anywhere from a 0.25% to 1% click-through rate on the display ads. From there, we see a conversion rate on return traffic from re-targeted ads that is three to five times higher than the traffic that comes in cold. We were able to prove quickly that re-targeting was a ROI-positive activity.

If a client is a B2B software company using a SaaS model, then each customer is worth a few thousand dollars to them. They track how many customers they get signed up through re-targeted advertising and they are able to justify the spending very quickly.

Sramana: At what price point or deal size does your technology make sense?

Arjun Dev Arora: Customer on the low end will have a sales price of $30 to $50. We have had people successful with less and have had several companies be very successful with more. If you are capturing a lead versus a product, that use case is different. People are more apt to input information than they are to purchase something.

Sramana: How long did it take you to prove the ROI for you very first customers?

Arjun Dev Arora: Less than a month. There is ROI from a purely conversion perspective, but for a lot of companies the fact that their ads were appearing on premium sites like the New York Times was enough. The credibility and branding value was well worth the $500. We had a couple of cases where startups were looking to raise money and they knew investors were coming to the site. They signed up with ReTargeter, and then suddenly the investors started seeing their ads everywhere. That put those companies on the top of the investors’ minds. There were similar stories about how companies used ReTargeter to help them get themselves acquired. In certain cases ROI can’t even be quantified.

This segment is part 3 in the series : Capital-Efficient Customer Acquisition, Company Building: ReTargeter CEO Arjun Dev Arora
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