Sramana: What was the next milestone?
Tobias Bauckhage: The next milestone was in 2010 when Facebook became a very important tool to reach people. You could target people based on their page and do advertising to drive them somewhere. We used targeting to experiment with Facebook and our Facebook page. We had editorial teams writing stories and we would experiment with how to write those stories to increase engagement. Every time we had a mainstream story, we would spend money to promote that content. We would target people who would want to see that page on our platform who we knew would engaged with our content on our platform. That was very successful.
Sramana: Was there a business model around that? Did you market movies for film makers?
Tobias Bauckhage: There was no business model, we were just experimenting. We used it as marketing to grow bigger. We had over one million fans on our German Facebook fan page after three months. We had the biggest fan page in the country, with very little investment. Out of those one million fans, we could generate 500,000 unique views to our site every month. In 2011 we realized that Facebook was a publishing tool. At that time, all publishing companies were optimizing for SEO. We found something that was as powerful as SEO but better because you could look for the people you wanted to get and they did not have to know about you.
That is when we realized we had a global product and that it was time to move to the US. We had a mechanism to build the biggest entertainment platform. Our German business was almost profitable. We decided to shift our concentration to start a different product that was a social version of our product in English. We now have 27 million English speaking Facebook fans, which makes us the biggest multi-channel distributor on Facebook and we generate 20 million unique views per month. We have 14 different channels on Facebook, 13 of which are in English. We cater the content to the fans based on their interest.
Sramana: How do you monetize this?
Tobias Bauckhage: Our business model is two-fold. We do advertising on the site. We started slowly with that because we would prefer to keep high CPM. The second part is that we use the data and the audience insights that each studio would love to have, and we sell that as a consulting service. We also package that up in products that can be purchased. Our data has let us become a specialist agency for various film studios who let us manage their Facebook spending.
Sramana: How big is the advertising business?
Tobias Bauckhage: We just started that about a year ago so we are not at the breakeven point yet in the US. We will probably be there next year. The revenues from that have surpassed the German business.
Sramana: Do you still have the German business?
Tobias Bauckhage: No, we sold that in June 2014 to a company out of France. They bought us for $20 million, and that lets us focus on the US business. We have 40 people working for the US business out of Berlin. We then started an office in LA two years ago where we focus on data and sales. We have about 20 people in that office.
Sramana: Your whole story is extremely interesting. Thank you for taking the time to share your journey with us. Best of luck as you continue to build your business!