Adify CEO Fradin Says More Data Exchange and Social Targeting Integration To Come

Adify - Vertical Ad Network BuilderRuss Fradin is CEO of Adify, a vertical ad network solutions provider. From what I see on Twitter (@rfradin), you seem to be working as hard as ever – in spite of the “liquidity event” when Cox Enterprises bought Adify in April of 2008. Workaholic?

RF: I am working as hard now as I ever have and loving it. That may seem counter-intuitive but I think that is because of the hit-driven Silicon Valley / New York start-up culture. There is always an opinion that selling your company for a ton of money and providing great returns to employees and investors is the finish line, it isn’t. It is certainly a fabulous financial outcome for employees and investors and a wonderful validation of the 2 ½ years of hard work we had put into the company at the time of the sale, but it is barely the beginning of the story.

Think about it from the other side – when we started Adify we did it because we believed our idea would provide the tools and services for a whole new class of media businesses online. We believe the networks on our platform represent fundamental changes in online media for the better around the world (we have clients in 10 countries today) – benefiting both Advertisers and Publishers. We’ve accomplished a lot in our 3-1/2 years of existence but there is a lot more to do. Why would I want to be anywhere else? I get to run my company with a team I hired and an idea I’ve believed in since we started everything with the experience, multi-media assets and support of a terrific parent company.

I truly believe years from now Adify will be even larger and more successful and that’s why I still work at it all the time.

Can you discuss Adify’s revenue and product momentum? Is the direct sales business growing where you sell client’s vertical network inventory? Or is it all about “white label” and providing the tools of ad network to branded sites?

Adify’s Network Builder platform is the core of the business and always will be. Adify has over 180 partners creating vertical ad networks on the Adify Network Builder platform. Many of these partners take advantage of our full service offering while some are leveraging our platform for distributed advertising, content syndication, behavioral targeting and inventory insight. The Adify Media business supports our partners, who can opt-in to campaigns on a line-item basis. This supplemental revenue assists in maximizing publisher value and smoothing revenues month to month. Both Adify Network Builder and Adify Media are growing businesses.

How is Cox Enterprises providing new opportunity for Adify and visa versa?

Cox Enterprises is a highly distributed company. Every business unit makes their own decisions about working with another business unit. To date, we are very pleased that,, CoxTV and Cox Cross Media are all working with Adify. There are additional Cox companies currently in preliminary stages as well. In addition, many of our prospective Network Builder clients are thrilled to partner with a company that has 110 years of history as a high integrity partner.

Given the recent downturn in the global economy, any reticence by branded sites in absorbing the initial cost and setup of a vertical network who instead choose to go with existing ad networks?

The two things are totally different. In this economy, branded sites want to protect their assets and extend them – by creating vertical ad networks. Many branded sites do not want to offer any of their own inventory to existing ad networks who are experiencing significant price pressure resulting in lower revenues to the branded site. These networks are also under pressure from advertisers to provide full transparency leading to significant pricing conflict between the branded site and the performance networks reselling their remnant inventory. With a vertical ad network controlled by the branded sites, the branded sites match price to advertiser value and they control the distribution of their content and brand.

Data exchanges and social media profiling companies are starting to gain traction as advertisers look for audiences. Has Adify considered how it can bring a data gathering or targeting element to its product line?

Adify Network Builder already offers an extensive behavioral targeting data gathering capability – I believe our platform is unmatched as far as BT ad serving goes. We are NAI compliant. We also offer extensive geographical and technology based targeting. The very nature of the publishers within networks formed by our partners results in content that is very high quality and in-context to the vertical ad network – giving Adify highly reliable contextual targeting as well.

In addition to all of our homegrown technologies we are always looking for ways to allow partners to plug-in their secret sauce to Adify Network Builder. We already work with a few data exchanges and social media profiling companies to allow our customers to leverage other proprietary targeting technologies on-top of our platform. You will continue to see announcements in the coming weeks and months on this topic.

Where do you see the ad exchange model fitting with the vertical ad network model?

I look at them as different ends of the online advertising spectrum. I fundamentally believe that brand advertisers will always value high quality, highly contextual, high-impact integrated ad placements alongside quality content. On the other end of the spectrum are people looking to buy bulk audiences. Both co-exist quite nicely in all forms of media.

I have said many times that I view exchanges as the natural evolution of the performance ad network. Why buy from a proprietary performance ad network when you can access enormous pools of remnant inventory from exchanges and leverage best of breed targeting technologies.

On the other side, I have always viewed vertical ad networks as the natural evolution of the portal. As fragmentation accelerates, quality content will be more dispersed across the web and brand buyers looking to reach a quality audience will need vertical networks to help them aggregate the quality inventory.

Could Adify someday provide a vertical ad exchange product which provides transparency and control to buyers and sellers?

Adify already provides transparency and control to buyers and sellers. Sellers have been setting their price floors, by ad space, since Adify first launched. Sellers have been reviewing and accepting advertising on a campaign and line-item basis since we first launched. Buyers have been able to select and see actual delivery and performance on a site by site and line item basis since Adify launched. The difference between Adify and a vertical ad exchange is that Adify restricts the publishing sellers to only those accepted by a Network Builder – accepted for quality content, quality design and minimal ad clutter.

I don’t like to talk about what Adify does as an ‘exchange’ because the relationships in exchanges tend to be transitory whereas the relationships between network builders and their publishers tend to be deep, integrated long-term relationships.

Google DoubleClick recently announced the “DoubleClick Network Builder.” Scared? How does Adify differentiate itself?

Honestly we were a lot more scared of the idea of DoubleClick Network Builder than we have been by the reality. Like all pre-launch products, DoubleClick was out in the market making audacious claims about what DNB would actually do. The reality, at least in the first version, has turned out to be far far less than promised. The product does not offer anywhere near the functionality of Adify Network Builder or a few other products in the market, for that matter.

Google will always have an advantage given their growing monopoly over the online advertising market so we’ll obviously continue to pay attention to DNB, but at the moment we have 180+ networks on Adify and as long as we continue to innovate on both the technology and services side I am not scared.

Follow Russ Fradin (@rfradin), Adify (@Adify) and (@adexchanger) on Twitter.

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