Hirsch discussed his new role and his new company's future plans with AdExchanger.com.
AdExchanger.com: Please share some details about the new role. Why make the move?
JH: It’s time for me to get back to basics and do what I do best – build new models and grow companies centered on how to make online advertising more efficient and effective. I am excited about the challenges of working in a small company environment. I do best when I find a company that has unique and valuable technology and has yet to find their stride in terms of capitalizing on their opportunity. That’s what I did by helping found Fastclick and what I did at AudienceScience by leading the digital data revolution.
If you look at the ad network space, there are billions of dollars flowing through these models. Forget about the network model itself for a second – money is spent with these companies because they know how to make campaigns work.
Underdog Media has spent the past four years building proprietary technology that bridges the past to the future. What I mean by that is that they leverage the proven optimization and performance techniques developed over a dozen years of experience with the opportunities that exist in today’s online environment. The team at Underdog has deep domain expertise and that means that they know how to make things work. I want to take that knowledge, and their technology, and expand the set of marketers we can provide value for.
From a general business perspective, AudienceScience built a global position as the worlds’ leading audience targeting solutions provider. That’s impressive. What it meant was that we had to continue to grow and expand to service global customers. At Underdog Media I want to take a very different approach concentrating on each customer and each employee, one at a time. I want to build lasting relationships, even at the expense of scaling the business. I want to delight each of our clients and create our own lifetime value if you will. That comes from having the right solutions and having great people to deliver them.
In terms of the people, I see a lot of similar characteristics. At AudienceScience the team was not afraid to try new things. I have already witnessed that same spirit at Underdog. People are willing to undertake new ideas, are not afraid to fail, and learn from their mistakes. That’s how you build a successful, innovative company.
At AudienceScience we clearly established the critical role that data plays in digital marketing. That’s a lesson that all digital companies have embraced and one that will be a core part of what we do at Underdog. The fundamental difference will be that we will be using data to build performance, rather than to pre-select appropriate audience targets.
What are the key points of differentiation for Underdog among other ad networks or media buying platforms in the space?
First off, we have to remember that we are in the business of advertising. I think that gets forgotten with all the focus on technology today. The right technology is critical, and Underdog has spent years developing theirs, and it is still just the means to the end.
Our approach is to not debate between Branding and Direct Response. To us, they are both part of every campaign. If you look at the typical purchase funnel, that tells part of the story. We like to think of the purchase funnel more like a “purchase hourglass.” From the top of the funnel the marketer can help consumers move through Awareness, Consideration and Action. After the action the marketer then has the ability to engage in Re-action, where cross selling and upselling can occur, then in Affirmation, where a marketer can test the consumers experience with their brand, and then in the Relationship phase where the marketer can leverage their experiences with the consumer to build lifetime value.
The Underdog Media technology and distribution capabilities allow for a marketer to engage with a consumer to build their brand relationship, drive actions, and pursue an ongoing relationship. We find that clients appreciate the logic in this approach, and the ability for our technology to make it simple to execute against.
Is Underdog Media targeting agency buyers? Target market?
We talk to marketers who are looking to satisfy brand and DR requirements. At times that means speaking to agencies, and at times directly with customers. There are a lot of online retailers that are driving much of their success through direct relationships. We are seeing that with the success of many of the retargeting companies in the space, and that will be a focus as well.
Is exchange-based buying the primary form of inventory acquisition? I'm curious how much the traditional ad network model is in play.
Direct publisher relationships, exchanged based buying, SSP integration, social media applications, rich media formats – every means to reach the consumer is being used. Ad networks have evolved in that their value proposition in the beginning depended on the control of inventory. They gained control through direct relationships, providing tools, and building relationships. That is no longer viable as a sole business model as sourcing and buying technologies, as well as the proliferation of publisher side yield tools, have made it possible for anyone to access inventory. The evolution is toward focusing on leveraging each of these channels to reach the consumer with the right message in the right environment. More importantly, the focus is on meeting the marketers needs at every phase of their relationship with their customers.
What about future plans at Underdog Media - the need for funding, building out the team, offices?
The company is already profitable and has been self funded. With over 50% year over year growth, they are quite successful already. We will, of course, look for opportunities to expand which may require additional funding. That said, our focus is on providing value to our customers, and to our employees, and that will drive our growth strategies. We are looking for experienced, dedicated people in sales, account management and engineering and intend to open a New York office in 2012.
By John Ebbert