Russ Fradin’s been around the ad tech block.
He sold his self-serve ad network startup Adify, since shuttered, to Cox Enterprises back in 2008; he’s on the board at both TubeMogul and comScore; and he served as EVP of corporate development at comScore for four years, starting in 2000, when the then newly launched online measurement company didn’t even have customers.
Now he’s in his fourth year as CEO of Dynamic Signal, the “employee advocacy” company he co-founded in 2010 after staying on to run Adify for a couple of years post-acquisition. Dynamic Signal raised $12 million in Series C funding in August, part of which it used to acquire content marketing cloud company PaperShare.
Fradin agrees that the term “employee advocacy,” Dynamic Signal’s bread and butter, is “probably a bad name for what we do,” but “we haven’t come up with a better one yet.”
Simply stated, it’s about providing employees with the tools they need to talk about the brands they work for on social without any friction. It’s actually not so far off, at least philosophically, from the fundamental idea that underpinned Adify: relationship building, whether that be with target consumers online via paid media or social engagement.
“When we sold Adify, we were watching marketing evolve,” Fradin said. “Advertisers don’t just want to buy ads on niche sites, they want to build deep relationships with these segments.”
AdExchanger caught up with Fradin.
ADEXCHANGER: First off, what’s a quick working definition of employee advocacy?
RUSS FRADIN: Everybody talks about how they want to find and cultivate brand advocates, but it’s one thing when a brand talks about itself – when a Diet Coke commercial tells you to drink Diet Coke – and it’s another thing if I tell you. You’re more likely to believe it coming from me because you know me.
But there are also a lot of issues to work out. First, there’s compliance. There are some things people don’t want to share and legal conversations have a dulling effect on employees. If they have to use their own judgment on whether they can talk about a certain subject, they’ll just say, “Forget it.” Convenience is another thing. People might want to do something, but you have to make it easy for them to be able to do it. And lastly, there’s authenticity. If you’re not authentic, then you’re not driving marketing value and you’re hurting your own brand.
That’s not a quick definition, but if I just gave you the short version of what we do, if you just heard that we have a tool that helps companies push stuff to their employees so they can post it on social media, that sounds cheap and it’s not really what we’re about.
So, how could brands use Dynamic Signal from a practical point of view?
Social selling is a big use case for us. For example, if a B2B salesperson wants to post the right message to the right people on LinkedIn or Twitter. Some companies are looking to turn their employees into subject matter experts, while others just want to help their employees build their personal brands.
We make it easy for employees to be more active on social if they want to. If the tools are made available to employees, they will use them. A large brand we work with did a survey of their employees before they met us, who said they’d love to talk about the brand more on social – they just don’t want to get fired.
Is there a paid media side to this equation?
At the end of the day, we’re all selling to a CMO who’s most probably going to judge the ROI of a program like ours very differently from something like a pre-roll campaign. It’s not about one or the other. Some people will use the program to drive impressions and earned media on a CPM basis, while others are more focused on lead generation or corporate reputation. Ultimately, we’re all selling ROI, whether that’s driving page views, getting more followers or trying to improve a company’s net promoter score.
But to be very specific, we don’t sell into agencies and take an IO. You can’t say, “I have 100,000 bucks this month, so I think I might take a little out of the ad budget and throw it into employee advocacy.” The system set-up and roll-out to employees takes time. That said, obviously every client of ours is a major marketer, so it’s not like we’re going to say paid media doesn’t work. It works beautifully well for many things, but it’s silly to stifle the most authentic voice you have, by which I mean the voice of your employees.
How is what you’re doing now informed by what you learned through your experience with Adify?
In many ways, Dynamic Signal is an extension of the core concept of Adify circa 2005. When we started Adify, we talked about building vertical-focused networks, which was a good idea because it created authentic quality reach to specific niches whether that be a demographic like Martha Stewart fans, stay-at-home moms, gay travel or whatever it is. We had hundreds and hundreds of verticals. Marketers fundamentally value the relationships they can build with authentic bloggers. Blogger advertising from 2000 to 2007 was the original influencer social media marketing.
What have you been up to since the Series C funding last month?
We spent our Series A and B mostly on technology. We had a tremendous technology challenge to make this work at an enterprise scale. We have clients that use us in nine different languages around the world.
We’re spending this new money to continue to grow our development team, but we’re also going to spend it on sales and marketing. Until our Series C, we’d spent no more than a tiny percent of our budget on PR.
You’ve seen a lot of ad tech M&A in your day. What’s coming down the consolidation pike?
I’m always skeptical about overarching themes in M&A. The nature of the M&A discussion in technology is that there are a lot more interesting companies that should be acquired than there are actual buyers out there for those interesting companies, which leads to more people writing about what could happen than any real action.
Sure, there’s going to be some consolidation. We could come up with a list right now of all the companies it makes logical sense for another company to acquire. But then again, you could get on the phone with the corporate head of a company like IBM, for example, and that person would have a list of, say, 200 companies IBM is thinking of buying in the next few years. Which one or two will they actually buy? Who knows.
We talk about these themes more than we need to. Cox didn’t buy Adify because someone else wanted it. They bought it because it fit in nicely with their long-term strategic road map and they liked the team.
A few years ago, when Salesforce bought Buddy, Google bought Wildfire and Oracle bought Involver, that was truly an "Oh my god, everyone’s buying one" moment, but that’s the exception to the rule.
Then look at Google and AdMob. That was some awesome consolidation. Then the senior team at AdMob went and started MoPub, and Twitter bought that. I guarantee you that if/when those guys leave Twitter, they’ll use their expertise to start something else. I tend to think about marketing tech M&A as one long never-ending cycle.