Rich Howe, CEO of Inuvo, discussed the new funds and the evolution of Inuvo with AdExchanger.com.
AdExchanger.com: How does raising funds in the public markets present special challenges?
RH: For Inuvo™, three questions drove our strategy:
- Could we afford to pay the fees and take the dilution associated with using an outside party to manage the transaction?
- Could we convince new shareholders that the new strategy and team were worth the risk?
- Could we fully subscribe the offering at market?
For our company, at this point in the evolution of the business, we were successful in directly convincing shareholders to invest in the company at the existing market price of the stock. The transaction was oversubscribed and as a result, the best interests of shareholders were realized. The stock has risen 60% subsequent to the closing. It was certainly a challenge to execute on all the fronts simultaneously and the procedural requirements for public companies most certainly do not make the process any easier.
AdExchanger.com: What is the key market that the ad platform serves? What does your competitive set look like?
RH: The company is targeting advertisers interested in performance-based advertising, where the advertiser is willing to pay for a generated action online, such as a sale, a click or a lead. With top-notch advertisers, we simultaneously target quality publishers who are looking to monetize online efforts and receive the highest possible payout.
We offer customers three principle advantages over our competition. First, since we are a platform and not a network, we have eliminated the traditional layers in the value chain between advertisers and publishers and as a result, are able to offer the platform services at competitive rates relative to our competition. Second, the Inuvo Platform provides advertisers with full transparency and control over their advertising campaigns, right down to individual publishers and the lead transactions they generate. Finally, we allow advertisers to integrate the Inuvo Platform with their existing lead or sales management systems. In so doing, manual reporting and consolidation activity that plagues existing affiliate management systems is mitigated.
RH: The original company strategy was to roll up Internet businesses and between 2005 and 2008 that’s exactly what happened. The company was called Think Partnership back then. Integrating and operating multiple businesses brought together in this fashion is complex with a number of unique people, process, and organizational challenges. In May of 2008, the Board of Directors decided to bring in new management with proven experience in the integration of businesses, Internet advertising and a detailed knowledge of behavioral targeting technologies. December 2008 set a true new beginning in motion for the company when I was brought on as Chief Executive Officer. Since my arrival, the entire management team and board has been reconstituted with executives from the advertising, analytics, media and marketing services industries. The company’s new mission is to become a leading provider of online advertising services powered by data and analytics, and with new management in place from companies such as Acxiom® and FICO™, the investment community, as evidenced by the recent equity offering being fully subscribed, appears to concur. 2009 was a rebuilding year for the company, a time to correct past mistakes, focus on the parts of the business with greatest promise and position for 2010 and beyond. The rebranding of the company to Inuvo, the word itself a combination of the words “innovate” and “nouveau”, was management’s way to tell the markets that a new and innovative company was back in the game.
AdExchanger.com: So, in a nutshell, what problem is Inuvo solving?
RH: Advertisers want high-quality leads and/or sales, publishers want to monetize the traffic that comes to their sites. Inuvo can help both constituents improve their current returns.
By John Ebbert