Ramsey McGrory: I’m coming up on a year in the CEO role. One of the things that attracted me to this company is that it sits at the nexus of social infrastructure and data. There is no more important place in the marketing than that position.
It all started with AddThis, which is the social tool set that’s used on 14,000,000 domains. That business didn’t grow in a year. It grew over four years, and the focus has been on trying to create deeper consumer engagement with a publisher and then deeper consumer engagement with each other, using simple sharing tools.
What’s the revenue model of offering sharing tools to publishers? Is it fee-based or a portion of the ad sales aligned with content that’s been shared? Is it licensing?
The underlying business model has always been, essentially, a data co-op model. We take the aggregated data across the 1.3 billion uniques that we see on a monthly basis, and all of the 8 billion search queries that we see, and tens of billions of unique URL’s that we see, and all of the billions and billions of social connections and social factions that we see, whether it’s a Tweet or a Pin or a Facebook post or the simple act of copying and pasting a URL, which is an incredibly viral and social behavior, even to this day.
So is AddThis trying to position itself as a data management platform or data analyst for social?
A lot of what we do is trying to simplify the use of data, because big data is obviously very sexy right now. But what’s important is, what can you actually do with it? There are so many companies that don’t have the capital, the people, the underlying infrastructure to leverage big data. Our focus is on simplifying those tools, and then, depending on whether you’re a brand that pops more on Pinterest or a tech savvy brand that tends to have more interaction from Twitter, we can enable those brands to create deeper engagement across any of the channels that they have.
In terms of gathering data, does AddThis handle that function completely in-house? Or do you work with outside DMP’s?
All of the data sits on our own proprietary infrastructure. We maintain several data centers. We spent a fair amount of time building this infrastructure out over five years.
The greater focus is taking this large-scale data center that we have and then working with the advertisers and DSPs and DMPs and exchanges to leverage that data on their infrastructure. Not only do we maintain our own infrastructure, but we have a fair amount of plumbing in place to work with the leading activators of audience based data, whether that is in a paid media vertical or whether you’re talking about a large scale publisher who wants to ingest the data and use that for content optimization. That’s where all of our revenue comes from is on the data side. We don’t generate revenue through licensing tools on an SaaS model. We generate the revenue through the licensing of data.
What sort of opportunities does the Facebook Exchange present to AddThis?
We have a long and positive relationship with Facebook. We were an early partner for them as they were growing to scale. We continue to be on the tool side, on the sharing and tool side. On the FBX side, we think it’s a great development, the fact that they have opened it up, the fact that they are standardizing in a way that all of the companies who have spent years and millions of dollars investing in audiences, in optimization of audiences and targeting, we think it’s a great opportunity. We work with many of the partners that are part of the FBX. They want to drive revenue and create great experiences for the consumer so we think it’s a great initiative.