AdKeeper says it isn't doing the proverbial pivot. In fact, it's "keeping" the foot on the gas with a growing product line, said CEO Scott Kurnit and company President MaryAnn Bekkedhahl in an interview last week with AdExchanger.
In early 2011, AdKeeper raised $35 million to support its offering of allowing consumers to "keep" online ads. Since that time, the company has learned a few things and is rolling out a strategy it says targets the entire purchase funnel.
In addition to making the "Keep" self-service, the company is looking to leverage Pinterest, organize ecommerce newsletters in your inbox, and launch a social commerce destination site. All of this is to be supported by a new holding company, Keep Holdings.
Click below or scroll to get all the details:
- The Mission Statement
- Sharing The "Keep"
- Industry Reaction To Keeping
- The Updated Product Line
- Why Email?
- Funding and Milestones Ahead
SCOTT KURNIT: No. The mission has always been to help consumers and brands better engage with each other. The mission hasn't changed one bit. We saw and continue to see an opportunity such that ads should be better and keep-able.
We also see opportunity with email marketing. It's a huge business that's never been unleashed out of the mailbox. Then, number three is we see an opportunity in social commerce, which hasn't been figured out. If you take a look at the dozen social commerce players that are out there and get talked about, no one has it right.
MARYANN BEKKEDAHL: We said we were going to start with letting consumers' time shift advertising. One way to get them to hold onto the brands of interest and be in control is to time shift ads down the funnel to purchasing and ongoing relationships.
MARY ANN BEKKEDAHL: For starters, we used to have to go in and train the agency ops team on our spreadsheet. Now, we've simplified it and made it more self-serve.
SCOTT KURNIT: The Keep button has changed, too. We now have an envelope, because it's "Keep-to-email." With the first Keep, you need to tell us where to send it - so give us your email or connect with Facebook. The second time, it knows.
So, you've gone from Keeping ads to making ads shareable?
SCOTT KURNIT: It's still Keeping. Here's the difference. We went from Keeping ads to a discrete place, to Keeping ads to your email inbox. That's the critical difference, because the discrete place needed the industry to have high volume, out of the box.
That was the chicken and egg. As soon as you take that away, and you go to email, all of a sudden the email as the Keeper was interesting. We also did the research which said, "Where would you like your ads kept? Facebook, a discrete place, email?" Four percent said Facebook, 30 percent said a discrete place, 60 percent said email, so it became easy.
If you think about the AdKeeper story, we went for "instant sunrise" across the industry with big brands and big money. Industry doesn't do "instant sunrise" so well. AdKeeper knew that, and what AdKeeper did was quickly adjust and say, "You know what, we're going to move at the pace of the industry."
MARYANN BEKKEDAHL: For example, by just making a slight tweak, we've got 10 advertisers interested in putting Pin It buttons on ads, which is something we stumbled across that we could do technologically.
SCOTT KURNIT: Now, for house ads or any other ads that you run, you can put them to Pinterest and you can put them to AdKeeper, all by yourself. You don't need us.
So when the user clicks the pin button, and it pins using AdKeeper technology, are you capturing data that can potentially track this user and allow you to target them elsewhere?
MARYANN BEKKEDAHL: Yes. It's great data or signal. For the advertiser, they say, "Oh, this person pinned my ad. They must be interested. Let me find them again."
They could even take that cookie or that action and parse it through 33Across or Media6Degrees and create a whole lookalike group.
Is there a media component to your business? You could use your data to buy on behalf of an advertiser through an exchange or SSP, for example.
SCOTT KURNIT: Not now. Right now, it's not what we want. That's always available.
I still think, as an industry, we're over‑data‑ing. The government's going to have a real issue. We've seen it in the EU. I don't know if they've done it yet or are about to do it, but they may basically say, "No cookies on advertising."
SCOTT KURNIT: By making them "keepable," we had hoped that the entire ecosystem would make them more likable and more useful. What a lot of people said to us at the very beginning was, "Nobody likes ads. What are you thinking?"
What we were thinking was that the Internet is a big deal that's going to be around forever, somewhere between 50 years and forever, depending on how long the planet is around, and that the ecosystem would rise to the occasion. If you go back to when we started AdKeeper, we were just starting to see [Aol's Project] Devil and the IAB's [Rising Stars] units.
The bottom line is - the industry was game to do much more interesting units, and they didn't.
Why do you think Devil hasn't gained traction?
SCOTT KURNIT: Internet ads are not good. Visionary guys, in the industry, like [Aol CEO Tim] Armstrong have said, "Wait a second. We can make this much better." But, the industry is slow to adopt.
The brands are innovative. The publishers are reasonably innovative. But, they are set in their template designs. The bottom line is, we see "ad keeping" on all ads in the future.
AdChoices is an ecosystem play, for example, but forced on the industry. It still hasn't had wide acceptance or usage.
We also approach the creative side that says, "Make our stuff more useful and better." But, that is slow to move also. Unfortunately, for the agency side, the split of media and creative is an issue.
Halfway through last year we raised $43 million. We were going to spend all of it in year one. We were going to [sign up] our brand partners and be on 80 percent of their [display ads]. We were going to put our marketing behind it and "ad keeping" would be here for the duration of the Internet.
What we realized, halfway through the year, was that the brands were going to do more like 10 percent, not 80 percent, which meant we weren't going to get the ubiquity that we needed.
MARYANN BEKKEDAHL: Ubiquity was important, because it's a new consumer behavior. We had to get it on enough ads that it would appeal to enough people and they would see it.
It was a little bit of chicken and egg. Interestingly though, CMO's were like the eggs. They were saying, "Yes, let's do this. This is great."
SCOTT KURNIT: Every one of our meetings happened at a brand. The agencies didn't take meetings with us. That's the nature of it. It goes back to this issue of innovation. If you can walk into an agency and say, "I can give you lift in your campaign next week." They will go, "Great. I'll do that." But, they would say, "You guys are trying to do a chicken and egg ecosystem."
Isn't there an investment that is required on the agency side, to create a mini‑site or additional creative, or whatever it is that happens within the AdKeeper tool?
SCOTT KURNIT: No.
OK, how about a time commitment that's required on their side?
MARYANN BEKKEDAHL: Half an hour. Literally, we go in, we show them the process. There's a spreadsheet to fill in. "What copy do you want? Which corner do you want the button to go in?" Stuff like that. There's a little learning.
SCOTT KURNIT: There was effort. For the media agencies, it was "stuff has to work" - if there was effort that they weren't compensated for … we kept saying, "How can we compensate you?" and there was no way.
We did 20 billion "keep" buttons in year one, a great number. But, halfway through last year, we thought, "How do we take our resources and not burn ourselves up?" We slowed down to the industry. We retooled.
Right now, the button is self‑service. It delivers to email versus a unique destination.
Number two is, we're now pinning ads to Pinterest. Pinterest itself can't really do that. We know ads, obviously, better than they do. Yet, they're an awesome service and focused on a lot of other stuff.
We're optimistic about pinning ads to Pinterest, but it's another example of where the industry needs to change its creative. An ad that's not beautiful is probably not going to get pinned as easily.
Facebook's IPO was a good thing, because at some point they will do a web‑wide ad network, and then we're going to see more of this aftermarket interactivity, which is F's and P's and K's (share buttons for Facebook, Pinterest, Klout) on ads - and that's a good thing for Keeping.
So getting the consumer used to this in‑button shareability in ads?
SCOTT KURNIT: Exactly - keepability, shareability and other kinds of benefits that will come. Business, to a large extent, is "aftermarket interactive." We like that. It's just not very active right now. Again, we've always seen the inevitability of keeping things that are of interest. Ads will get better on the Internet.
MARYANN BEKKEDAHL: The company moves from top to bottom with its product line. If you start at the top of the funnel, it's demand creation - so ads. We've got our ad product, Adkeeper and Adpinning.
Moving down the funnel is consideration, shopping, buying and then CRM. In the middle, we have a new product called Keep.com which is coming about as a beta in about a month. It's an e‑commerce, social commerce disruptor that's coming soon. Eleven percent, maybe less, of retail is done online today. Whatever it is, it's way too low for what this medium should be.
Then, moving down the funnel to CRM, we have launched a product called TheSwizzle.com. Today, we're sending our first batch of customers from a waiting list into the service. The idea there is to help consumers manage email overload.
Everybody's inbox is way too crowded with emails that they've subscribed to - so it's not spam we're talking about. It's J. Crew, Horchow, Home Depot and whatever else they've subscribed to.
We're going to present to them all the contents of their inbox and give them choices. Do you want to unsubscribe? Do you want to roll it up into a daily digest? Now, you get one or maybe several themed digests. There are a couple of companies that do that already in terms of organize your inbox.
MARYANN BEKKEDAHL: The emails that the marketers send to their best customers are ads, but they're email newsletters, too.
Investigating and studying ads and what's wrong with that and how can ads become more keepable, etc., we stumbled across these and found them to be valuable. They're one to one communications versus broadly distributed.
SCOTT KURNIT: At the very beginning we were all about invitational versus interruptive. Ads on the Internet by definition are interruptive just as in television and every place else.
Our hope was that the interruptive ads on the Internet would become more invitational.
MARYANN BEKKEDAHL: We can display the emails from thousands of brands every day in what I call an "app store" or a newsstand - the tagline right now is "we subscribe so you don't have to." If you want to go to Macy's and you want to see what's on sale at Macy's, it's OK if you unsubscribe because we're always going to have it every day.
Do you see this as a Groupon-type of competitor?
MARYANN BEKKEDAHL: We're not creating new deals. We aren't working with the marketers the way a Groupon would have to - for example, go to the bikini wax place, create the deal and then promote it. This is more of an aggregation on behalf of the consumer.
In terms of roll-out, when is everything "live"?
MARYANN BEKKEDAHL: TheSwizzle.com - we're calling it an inbox manager tool - is coming in about two weeks. We're just finishing up a few tweaks.
What's the roll-out plan for Keep.com, the social commerce site?
SCOTT KURNIT: In a blog post in February, we talked about changes for Keep.com. TheSwizzle.com was originally called Keep.com until it kind of dawned on us that the Keep.com brand plays better for a social commerce strategy. I would say it's a cross between Pinterest and Instagram in terms of social shopping. There are a lot of companies in the space. But again, we're in love with the purchase funnel, and it dawned on us that as you move further down the purchase funnel in this world, you get greater control of your life.
Go look at the top media agencies, creatives and brands. With TheSwizzle.com we're picking up the emails and using them in our business model. We're using co-registration to create new registrations.
We move in that same space in the purchase funnel at Keep.com.
Those two things together create an interesting shopping experience, which is what's coming with Keep.com in four weeks as a beta.
That will play off the referral model that we thought Pinterest would do. Everyone was always guessing about, "What's Pinterest's revenue model going to be?" It always seemed obvious to us that it would be based on refer revenue for product purchase.
TheSwizzle.com plays off that concept of "refer" that we see through Commission Junction, and LinkShare, and, soon, Keep.com. While we will have relationships with brands, and already do, this is an industry with those types of referring marketplace mechanisms which grew up 15 years ago when companies like LinkShare started because of comparison shopping engines.
That kind of comparison shopping engine business fizzled, but the infrastructure of a marketplace for referral offers and picking up four to six percent of a shopping cart lives.
It seems similar to what VigLink or Skimlinks is already doing.
SCOTT KURNIT: It's not similar. They're a tool that we actually use.
If you capture an image of a vase off the web, you may ask, "Where can I buy it?" That's where Skimlinks comes in. They can say, "OK, that is purchasable over here or over here." That's a good thing and a tool that we use.
Take a look at the new ecommerce stack which is developing. Pinterest is helpful to all of us here. This is where we're playing - the finding and displaying of the items. You then have to get into the purchasing of it. With the purchasing, we're going to see a whole other layer of infrastructure change where we're going to see aggregated shopping carts.
If I'm Target or Amazon, I'm going to have to API my shopping cart up a layer, so that as I have commerce happening, or as I'm finding things to buy, I need to make it simple. Right now, I'm at the Target site where I have the Target shopping cart and I'm at the Fab site for the Fab shopping cart. That's going to get simpler over time.
SCOTT KURNIT: No, we raised a lot of money, and we made the decision to keep it. We're well‑funded and have years of money in the bank.
What does the company look like right now, in terms of size and people? Is it just here in New York?
SCOTT KURNIT: We're still scattered around the country - engineering is scattered. We are at about 25 people today.
In the next 12‑18 months, what are some big milestones you'd like AdKeeper to achieve?
SCOTT KURNIT: There's a megatrend in the industry that gets my attention - it's somewhere between idealab, Betaworks, and some of our thinking – i.e., you can do new products in this industry with three to five engineers… even two, or sometimes one.
We like the idea of being a multi‑product company that is synergistically connected so every one of our products supports the [company's] mission. We've avoided the temptation of saying, "Hey, that's a cool thing, let's do it."
We're in the brand and the marketing space. We live in the purchase funnel, and we will continue to create products in and around that.
MARYANN BEKKEDAHL: As a company, it's nice to spread your revenues across advertising and where consumers are buying.
SCOTT KURNIT: We're looking at individual products, whether one supports another, maybe we create new products, or we spin a product out as its own company - that's all possible. What I like about what we have with our portfolio is that they play so well together.
The reason for advertising is obviously to make that sale, at the bottom of the funnel. To be able to connect the top and the bottom of the funnel is interesting. We're learning.
So, is this a new model for ad tech entrepreneurialism?
SCOTT KURNIT: We have the advantage of critical mass so that, as we see a new ad tech opportunity, we can take advantage of it.
That's why we have Keep Holdings. We have the advantage of financial resources and some scale which is hard for an ad tech business to achieve when it's starting from scratch.
Might we expect AdKeeper to start investing, or acquiring startups?
SCOTT KURNIT: We might acquire some little stuff. Not so much investing. Part of it is, our venture guys do that for a living. For us to invest, increases the duration for their payout. It's a model problem with our investors. That's number one. Number two is - owning a small part of a startup isn't interesting to us. We're not venture capitalists, although we have that in our DNA. We'd rather have control. You could probably see us more tuned to acquisitions of companies that fit with what our next steps are.
By John Ebbert