Sramana: I like your approach because it lets the partners know that you are not taking their data and helping somebody else.
Bruce Buchanan: That is very important and that is why our partners are comfortable with us. One of the things that we had to go through with the eBays of the world was a very comprehensive audit by the Australian government. IP security, in terms of the knowledge that the information is going to be protected and handled in the way expected, is very critical. Ours is a white label business. Our only reason for being is to support our partners. Our efforts and focus is around supporting our partners.
Sramana: Do small businesses factor into your business model?
Bruce Buchanan: We are very excited about the ability for small businesses to participate for the first time. The messaging is very simple. It is presented as text based questions during the transaction under the partner’s brand. This makes it very easy for businesses in the local area to participate in that environment.
We have just rolled out our self-service platform for the very first time. We have started to experiment with small businesses. In the first month, we have had 4,000 of them sign up.
Sramana: And your model is success fee-based, right? It’s not an ad outlay model.
Bruce Buchanan: Exactly. A local dentist or restaurant that wants to talk to people who are in my area can be presented with an offer that I create. That could be as simple as receiving emails from them or receiving a special offer. They only pay for each successful consumer transaction.
That makes it easy for a small business to participate in a personal, targeted offering. That has only gone live in the last month. We will finish beta testing of that in 11 days. We have been using that as a way to acquire small businesses, which only increases demand for the network. That is great because small businesses are typically a very hard audience to reach.
Sramana: It sounds like most of your partners are e-commerce sites. Is that correct?
Bruce Buchanan: Yes. There are a few emerging in other areas but we primarily see deployments in transactional areas.
Sramana: Outside of your platform, are e-commerce sites using a lot of advertising?
Bruce Buchanan: A lot of them do participate as advertisers as well. Often, what they do is reinvest the revenue that they generate to accelerate customer acquisition on the front end.
Sramana: Are they operating as media platforms? Are they monetizing their traffic?
Bruce Buchanan: Yes they are. They participate on both sides. Groupon is an advertiser on the ticketing sites. Ticketing sites are advertisers on eBay. It is a bit of a virtual circle.
Sramana: Is there a case for you to work with the publishers?
Bruce Buchanan: We have one business that we have acquired which is on the publishing side. It has half a million active users. We bought it and we have been playing with that to see what we could do in terms of revenue generation. We have been out to generate $100,000 a month using our platform. That is not where out platform shines, but it can apply well. It requires a different method of thought for those platforms.