Vertical Travel Ad Network CEO Cree Lawson (Part 9)

SM: What is your growth strategy?

CL: Growing a network is pretty straightforward. You build out the sales team and you add more publishers. We plan to continue on these core aspects while establishing more specialization, new products and barriers to entry. We have plenty of room for growth both in publisher audience base (there are 10,000 travel websites out there) and in advertiser share of wallet (we’re not quite at 1% of the $3.2 billion a year in revenue). So there’s no shift in strategy other than going deeper with our publishers, deeper with our advertisers and expanding things on both sides. >>>

Vertical Travel Ad Network CEO Cree Lawson (Part 8)

SM: Describe some of your team-building experiences.

CL: From the start-ups I was associated with before TAN, I know that team building is perhaps the most difficult aspect of entrepreneurism (aside from spelling the word, of course). You start, and it’s just you and you are alone and you are screaming at the world, saying “you need change and I have it”.

And then you convince some people. And they’re usually lunatics. Wild, idealistic, un-tamable lunatics like yourself that stop at nothing to realize the vision. And the passion spreads, more of a disease or mass delusion than a business. And you attract a few more lunatics. >>>

Vertical Travel Ad Network CEO Cree Lawson (Part 7)

SM: How did you finance the different phases of the company?

CL: In late 2005 and early 2006 we signed on two publishers that, together, quadrupled the size of our audience. We grew the company to the maximum extent possible with all the profits we’d accumulated.

A few months later, one of those publishers left the network. We had all these new sales reps and one-third the ad inventory. I thought we had a cash crisis on our hands. I called Michael Thomas, an advisor and the founder of some of the first sites to join the network. I told him that we were looking for some angel capital and he stepped up. >>>

Vertical Travel Ad Network CEO Cree Lawson (Part 6)

SM: What stage are you at now? Revenue? Profitability? Traffic? Customers?
Users? Advertisers? Any other metrics you track?

CL: We ran the company at break-even for the first three years. We didn’t have a choice. All the profits went right back into the company (and a few to American Express and Mastercard).

Now that we have some funding, we are hell-bent on pursuing the opportunity in front of us. We’ve sacrificed a few hundred thousand in profits last year, but January revenues this year are four times what they were last year and the network has nearly doubled in size. >>>

Vertical Travel Ad Network CEO Cree Lawson (Part 5)

SM: What are your top target segments?

CL: We’ve been called the “long tail of travel websites” but that’s not completely accurate. RandMcNally.com, LonelyPlanet.com, WAYN.com and AreaGuides.net are hardly long tail publishers. These are premium properties with deeply integrated advertising packages that command high CPMs. Generally speaking, we make most of our revenue comes from connecting large travel advertisers with the niche travel websites. >>>

Vertical Travel Ad Network CEO Cree Lawson (Part 4)

SM: How big is the market? How do you calculate TAM? What is your business model?

CL: We’ve reviewed a great deal of research on how large the market is for online travel advertising and very specifically banner advertising on travel websites. Forrester says that online travel advertising is an $8-billion-a-year industry in 2007, growing to $24 billion in 2012. (See graphic below.) Graphic advertising (rich media, banners, sponsorships) make up about 39-40% of interactive ad spend so, in rough terms, our addressable market is $3.2 billion in 2007, growing to $9.39 billion in 2008 if you restrict our business to strictly banner advertising. We’re more than that. >>>

Vertical Travel Ad Network CEO Cree Lawson (Part 3)

SM: What was the market landscape like when you founded the company?

CL: When we started Travel Ad Network, Google AdSense had just launched its textlink product and everything was about textlinks and performance advertising. No one talked about users; it was all about clicks.

And the terms “branding” and “online” weren’t used in the same sentence. >>>

Vertical Travel Ad Network CEO Cree Lawson (Part 2)

SM: Where did you get the idea for your current venture?

CL: When I wrote a business plan for online advertising on Fodors.com, I knew that Fodor’s had an affluent audience eager to spend thousands of dollars planning the best two weeks of their year. This is an appealing prospect to advertisers.

But at Rough Guides we didn’t have that reach. We had the targeting–and travel advertising is ALL about geographic targeting—but we didn’t have critical mass of inventory for any given geography. We were, in a word, small. >>>