Gurbaksh Chahal is CEO of RadiumOne, an online advertising network.
You're back on the ad network scene with your newest company after a successful and very lucrative exit with Blue Lithium when it was sold to Yahoo!. Why? Why not kick back?
GC: To sit still is not in my DNA. I sold my first ad network, ClickAgents three months after I turned 18 for $40 million. I could have "retired and kicked back then." Making money isn't what drives me. The challenge to create something bigger out of nothing again is what motivates me. I am back because I enjoy building great companies with cutting edge technology. I love to innovate and I see great potential in our space. The way I see it is that no innovation has happened since BlueLithium days. Since 2007, the Internet has seen one mega-trend - Social. It's become the epicenter of everything we do on the web. People are spending time in areas of the web that are all about a social experience. All of this social activity has created a vast amount of data, but advertising hasn't really cracked the code on how to apply this information to the targeting process. I feel it is time to move the industry forward.
What problem is RadiumOne solving?
Most ad networks today have evolved very little from the behavioral targeting days. They still basically look at previous ads a user has shown intent on to determine what kind of future advertising is most relevant. That is extremely limiting and has a scale problem. Think about the data that exists from just that? It's such a small snapshot of their online behavior that can't scale. We're going to bring volumes of new data to the targeting process. Our goal is to gain visibility into about 90 percent of users online behavior so we can better target advertising. And to get this greater visibility we're going to add data from their social indirect and direct connections.
Using this social data lets us deliver another huge innovation to the ad network marketplace - Scale. Using this social data not only lets us better understand individual users, it leads us to like-minded groups and communities. That means we can build huge audience for ads very quickly and still bring unprecedented targeting to these huge campaigns. The goal isn't to deliver more advertising. The goal is to deliver better advertising. We truly believe that this innovation in utilizing social data in ad targeting is transformative. We think we'll come very close to transforming marketing from strict advertising to something that is closer to "information." The end result will be unprecedented engagement for the entire ecosystem.
What's your competitive set and how will RadiumOne differentiate?
At the end of the day it's about performance. On the various case studies, we'll announce soon - we've used less inventory to convert more users into customers. So what does that mean? It's simple. The publisher generates more revenue, the advertiser generates a higher ROI, and we capture the upside from the magic in the middle our platform derives.
Let's discuss the pledge from the RadiumOne launch press release that the Company "will outperform any other ad network or refund the full cost of campaigns that run on the new network." Some say this is a marketing ploy. How do you respond? And, what are the success metrics you will use?
When it comes to being an ad network its all about having a method, process, and technology. This is a vote confidence in our ability to bring unique value to advertisers. The industry does not need another ad network; it needs a better ad network. The same folks that created the Blue Lithium technology have created an even better technology to yield results.
We've tested our algorithms, our data sets, supply sources and partnerships to know we perform better than our competition. You can't hide from numbers. Our pre-launch tests showed that when compared to traditional display ad networks, we up to 75% higher conversions without salvaging scale. If an advertiser is transparent with us - we'll gladly live up to the challenge of hitting or beating their existing campaigns.
RadiumOne - sounds radioactive potentially. What does the name signify?
Haha. I guess you can say it's our way of saying we're one degree away from executing our checkmate strategy on existing ad networks.
Can you provide some detail about what the levers are, and/or datasets, that RadiumOne uses to increase performance?
RadiumOne looks at 8 different categories of data, and then we plot that data on a social graph. We can then look at the plot to accurately describe a user's behavior. We've included the list below. The 8 datasets that RaidumOne uses are:
- gWallet Social Data (Purchase & Transactional behavior on 75 million monthly active gamers)
- Website overlap (sites visited by the consumer across R1 Network)
- Blog Platforms
- Social networks (outside of Facebook)
- Microblogging/Status platforms
- URL shorteners
- Applications & Social Widgets
- Photosharing Websites
Why should brand dollars not be afraid of social media?
Five years ago, UGC was a bad word. Today, Social is the new behavior of the Internet. Brands have realized they need to be playing an active role here. We're making it easier for them to be part of social without changing the advertisers ways of buying media. We want to be that - alternative to Facebook for Social.
Interaction now happens by sharing information. If advertisers are afraid today to use social media for brands, it is because no one has been able to bridge the gap between the brands and consumers within this media. With the right tools in place, social media can provide brands the opportunity to have their consumer interact and build brand loyalty.
At RadiumOne we are using the social data to help us not only understand individual users but lead us to like-minded groups and communities. This allows us to build huge audiences for our advertisers by creating lookalike users. Basically tapping into the consumer pool and growing scale, not available to the advertisers using the old method of retargeting. We believe the next evolution in advertising won't be about customers just showing intent; it will be about finding new audiences that look like your existing customer. To understand and explore this, advertisers must play an active role in social.
What types of publishers are you looking as you create your ad network? Will you use exchanges? Intent data such as BlueKai or eXelate?
RadiumOne takes pride to ensure brand safety both on advertiser side as well as publisher side. For publishers, we are an invite-only network - our focus is currently only in the Comscore 500 universe. If 90% of the audience spends time on these 500 sites, we're only interested on this set of inventory. Reach, frequency and content of the sites matter as we optimize the full scale of our product both on the display and mobile. We will integrate with the data exchanges should our advertisers want to overlay segments from these entities to their campaigns, but RadiumOne has its own data set harnessed from the eight categories mentioned above. We feel social data is the natural evolution from behavioral data that most data vendors provide.
A year from now, what milestones would you like RadiumOne to have accomplished?
We have lots to accomplish. Our goal is to continue to hire and surround ourselves around smart & amazing people from the industry. We're 55 people - we'll be well over double that next year.
We're rapidly growing in all of our offices and also launching our European division early January 2011. So my main goal is by end of 2011 - in both geographies - to have over 250 brands and DR spenders on the network working with us.
What would you say are the 2-3 keys of being a successful entrepreneur?
My formula to success as an entrepreneur has been the following three key themes: Build. Execute. Innovate.
When it comes to building - you have to have the right product and business model from the start. I love the ad network model. If you can create value, it's a business model that can generate value for everyone - and is a great standalone business. Most of the innovations that came to market post-2007 such as DSPs, SSPs, (Publisher daisy chain optimization play), data plays, etc. don't have a model that can allow them to survive on their own as standalone company. They might have hype and some sexiness toward them but that's not enough. Most of them are like burgers - they are made to be flipped. I disagree with this approach. You have to build something that creates long-term value and can survive on its own - that means without fancy VC money that is chasing hype. But, real growth, real revenue, and most of all real profits.
When it comes to execution. I'm a big believer that execution is everything in the business world. While you're playing, someone else is working, and catching up, so learn to play with one eye on the competition. You're not going to be on top forever.
Innovation is the biggest equity driver. You have to tackle something that no one else is working on or has forgotten about and do it better. Being the first doesn't matter - but getting it right means everything. Take the blinders off. Look around. Don't be afraid to go off on all sorts of unusual directions, since that's where you might just find the most unusual-and promising-opportunities.