Gurbaksh Chahal is CEO of RadiumOne, an online advertising technology company with a real-time social ad platform.
As part of its "State of..." series of articles with industry executives, AdExchanger.com spoke with Chahal to discuss his company, his views on the space, and the state of RadiumOne today.
Click below and scroll for more:
- Rumor Mill
- Product Development Update
- Does RadiumOne "RTB"?
- Facebook And Positioning The Company
- Customer Trends
- The Ad Network Model
- Milestones Ahead
AdExchanger: Regarding the TechCrunch rumor about the valuation of RadiumOne ($500 million) and that you’re raising a round of investment. Anything you can share? Were those numbers correct?
GC: When it comes to things like that, time will dictate the outcomes. We don't have an official statement right now. We are of interest to a lot of people who think that we're doing something interesting. And things like this happen all the time.
Sure. We launched in October of 2010 with the initiative of social retargeting and had a typical ad network strategy, which leveraged other people's data. Then, we asked how can we control and generate it for our own product. So, the first part of business was called ShareGraph, which was sharing activity on a third‑party basis that we can anonymize - and figure out who's sharing with whom, and make those connections. That was the proprietary technology that started the business.
Then, we looked at going ahead and generating this data on our own. The first product that we launched to focus on that was po.st, which was similar to ShareThis and Add This, but it allows publishers to generate revenue from the sharing activity that's going on on their websites. In turn, it gives us direct first‑party relationship data with the publisher. And that's grown tremendously - faster than I even expected.
And a sub-product of po.st was re.po.st, which is similar to Bit.ly in that you can shorten the length of a URL, but as soon as you shorten the length, it creates an audience segment for an advertiser.
The last piece that we just rolled out is via.me, which we think reflects what’s happening with the digital landscape today. Since 2007, nothing has evolved with retargeting and audience buying except the power went from the ad networks to the DSP (demand-side platform). And the DSP's sole business has been, "How do I become a cheaper way to do the same thing?"
The way I look at the DSP model is that their business model is to create a smaller pie of a smaller pie, rather than create a new value that they're providing to the industry. If you talk to brands, agencies and advertisers, the thing that they struggle with is while they understand that if you use a DSP to do retargeting, it's cheaper, but the bigger problem is that they need more data. And, they need to figure out how to generate data.
Since 2007, the big change has been that consumer behavior on the web has been all about the social web and social platforms. It’s less about what you do on an advertiser's website. If the way you generated data was based on advertiser pixels, what you'd realize is that people are going to those sites less and less. There comes an obvious scale problem [with data] that exists because all the time spent today is through engagements across social platforms.
This is why we created via.me with the purpose of creating a better product that allows you to push photos, video, and audio, and publish it across all these platforms. But more or less for brands, specifically, because if a brand can broadcast a picture or broadcast a form of audio or video, across their social media, they're connecting with consumers that are in the funnel. And we're going to basically link real‑time publishing into real‑time advertising.
We separate ourselves completely from the industry because we're creating a new category of advertising with our own platforms, plumbing and the essence of not worrying or using advertiser data to complete the value proposition. It's looking at this social web, deciphering the data that matters, building audience segments that nobody knows about yet, and utilizing them to create an ad campaign.
It's crucial because we have access to 12 billion RTB ad impressions a day. That'll grow as time goes on. If you think about it, if somebody publishes a link or a photo and you've got all these people that are looking at this form of content, within a minute, we have the ability to find them wherever they are across the web. And the fact that we can buy them through RTB creates a more efficient way to enable this plumbing to happen.
The thing that Facebook is focused on is they've created a new category of advertising. And that category is about getting people to create brand pages and drive traffic to that brand page. Their conversion is not the conversion we're dealing with. Our conversion is how to get Barack Obama signups or donations? We're dealing with real‑time activity of conversions versus the category that Facebook has created, which has been focused on a different ad unit that we don't compete with.
But in essence, the parallel here is that Facebook does great stuff inside their walled garden. We're essentially taking and creating a new social graph, then allowing the advertiser community to buy this social graph form of advertising across the open web.
What do you think the impact is going to be of the Facebook IPO?
History is a great example for what will probably happen with them. If you remember Google in 2003 before they went public, they made a lot of talent acquisitions because they wanted to make sure they had a great team before they became a public company. As you know, Google had a successful IPO and a lot of cash, but everyone was wondering when they were going to become a big acquirer of companies. Since there are only so many talent acquisitions you can have, in the next stage, it’s actually about getting a company or people that have built solid traction in an area.
The peak point for them was YouTube. Google made this Hail Mary attempt saying, "I believe in this one‑year‑old company called YouTube, and we're going to go invest more money into it and make it the platform choice." They wanted to win in that area - when video was still new. That was their breaking point. Since then, the biggest acquisition they’ve done to date is the Motorola one. So, the natural progression of companies as they go public is they start to make bigger bets.
Getting back to your product strategy, did you mention PingMe? Any others products in the pipeline?
PingMe is actually part of our RadiumOne Mobile owned and operated inventory. It helps us build the mobile ShareGraphs, but it's not part of the broad web story because it's only in mobile apps, versus ViaMe, which is more of a desktop destination. But, PingMe has done well and it continues to grow. We've surpassed a couple million users already on it, and we're now on almost four platforms. But, are we going to create 10 more new products along these lines? The answer's "No." We have all the signals necessary right now to create a signal that will gives us the ability to own the plumbing of it.
What I mean by that is - the more successful we become on these existing products, the less we rely on RFPs as a business. We become a business that becomes a "must‑buy" just as much as people
"must buy" Google or Facebook ads every month.
I wouldn't say that we necessarily work only on brand. Brands, such as Fortune 500 brands, have a DR metric to it. For the most favored credit card company in the world, we're the largest spender of DR for them - not only across ad networks, but portals and everything.
So what’s the success metric for a credit card company -a sign‑up? It's not brand lift, right?
It could be different types of things. It could be an email list campaign or a registration. It's across the board. That's what makes it easy for us to go to market because what we're trying to do is solve a problem which everybody has – “I want advertising to scale for me and I can't do it by just retargeting” - something other outlets exist for.
This is a question I was asked at BlueLithium - back then there was still something called rep networks, which had a model such that every year their margins went down, but their sole purpose was that they had some exclusive arrangement, and they were repping inventory for a prominent publisher. I predicted that the model suck3e, and was over. And it's pretty obvious that it didn't last. My prediction now is that if you're an ad network the only way you're going to survive is if you have a unique offering and a data set that allows you to differentiate yourself and create scale. I don't see that happening with a lot of ad networks. There are a lot of ad networks that are dumb, fat and happy where they have $100‑plus million in revenue. They've built it over the course of 5-10 years. The obvious question is, where's the growth? They can't go public, because there's no growth, differentiation and they're still stuck in the past.
The broader story is that I'm surprised that as an industry, we haven't talked about it: retargeting as a data set is going down. Why is the industry not recognizing that and realizing that the next evolution is this social web? It has a monstrous real‑time dynamic data set that's being generated every second. That's the future of real‑time advertising. That's the future of any type of display advertising. The cool thing is how we’ve positioned ourselves around the fact that we're enabling something that people want to do, which is social advertising, but we're applying it already to an established $25 billion display market. We're not trying to go after that $3 billion market that Facebook is in right now. Facebook is Facebook. They have their own ad unit. We're, in essence, trying to take social advertising and put it into a $25 billion market.
Long tail is great and you're still going to have it, but you're going to be bought through an exchange.
But if you're an ad network trying to go ahead and rep long tail sites, the value proposition you have goes away because the demand isn't going to be there. The demand's going to go to the DSPs and trading desks. If you don't have enough ads at a premium rate, you serve the inventory that is funneled through exchanges. So the thing that will happen is a slow death. But the death is probably going to be quicker with every month that goes by. But if you look back in the next 2-3 years, there'll be a fraction of the number of ad networks that are still around today. And they're the new rep networks - meaning that they're still around, but nobody respects them.
What's your take on the agency trading desk business? Is that going to take over?
Yes, it already has. If you ask an ad network today, a lot of them are feeling the heat because they're realizing their number one tool is retargeting. And now they can do that through the trading desk? The way we position ourselves with the trading desk is, we're providing them unique data matched with media that no other company can provide.
The real opportunity in cross‑channel is not in offline, yet. But another interesting trend that I'm seeing right now, and that we're trying to solve, is the convergence of multi‑devices by being able to target someone on the web as well as mobile and being able to control data and the experience around it. That will help the mobile ad industry become more prominent than it is right now, which today is more like 1997 as far as display advertising on the mobile web is concerned.
On the milestones, we're growing like crazy. We're already in two other markets: France and the UK. The goal for this year is we'll be in Canada and Australia. Other than that, if we do what we need to do from a product execution and revenue standpoint this year, 2013 is looking good.
By John Ebbert