There’s nothing more cliché in the ad world than the phrase “right message, right time.” But as the cross-device game heats up, it’s a platitude that’s gaining a new lease on life.
Kahuna, a Sequoia Capital-backed mobile marketing startup which raised $11 million in Series A funding in February, aims to tackle the cross-device messaging problem via a tool released Thursday called RevIQ. The tool is designed to send strategically timed automated messages that hit consumers on the device on which they’re most likely to convert.
Clients using RevIQ include Coupons.com, Overstock.com and Hotels Tonight. According to company CEO Adam Marchick, Kahuna customers tapping into RevIQ have seen between a 30% and 60% conversion lift in their engagement campaigns, and a roughly 10X increase in push notification response rates from 2% to anywhere between 21% and 30%.
Clients log into Kahuna’s platform to create trigger-based campaigns and a series of message variations. After establishing the most ideal timing by sending one message to a group of users at different intervals, the system starts testing the messages to find which one performs best for specific users. All the while, Kahuna’s algorithm ingests customer data points, including order history, brand affinity and device and messaging format preference.
“Timing matters,” Marchick said. “Take something like Yahoo Sports. You might look at it on your phone at 9 a.m. during your commute, on your MacBook at noon while you’re taking a break at work and at 10 p.m. on your iPad when you’re sitting on your couch. If you don’t understand omnichannel, you’re probably sending an email at 9 a.m. instead of a push notification and just hoping it works.”
It’s a lesson Marchick said was ingrained into him during his time working on the product/growth team at Facebook in 2008, when it only had four people on it. The team grew to more than 100 people in 18 months.
“We were only at 100 million users back then, but to Mark Zuckerberg’s credit, growth was paramount at Facebook,” Marchick said. “The whole goal was to send messages people actually wanted to get that were personalized and in context. We were sending billions of messages a week with a 40% response rate, because it’s one thing to get a message that says, ‘Your best friend commented on a post!’ and another thing to get a message that says, ‘Hey, someone commented. Go check it out.’”
That’s part of the problem with other CRM systems today, said Marchick. One, they weren’t architected with mobile in mind – “You can’t put lipstick on a pig,” was how Marchick put it – and two, they rely on volume, minus the insight, to make their point.
“When we founded Kahuna, marketing automation was living and breathing on sending billions of emails with a 1.5% response rate and, to us, that’s like blasphemy,” he said.
Of course, you need data to grease the wheels or you can’t be sure you’re messaging the same person the right way across their various devices.
Kahuna’s goal is to act as “the system of record for our customers,” and help them get more personalized without having to rely on personally identifiable information (PII), Marchick said. It does that by collecting non-PII consumer behavior and creating statistical models as users move across devices, consume content and take actions.
For example, if a person reads 10 articles about a certain sports team, it’s safe to say he or she is a fan, or if a person looks up flights to Hawaii twice in one day, it’s fair to assume that a trip is imminent. In some cases, when a user signs into a brand’s app or website, that information is centered on a deterministic kernel.
“When a user registers on desktop and on their phone, our customers let us know and we can do personalized unification around that,” Marchick said. “When you talk to ad tech companies sometimes, you get fuzzy math. They say they’re either 90% sure they’ve found the right person across devices or 60% sure. We feel like we’re either 100% sure or we’re 0% sure, because there’s nothing worse than missed personalization.”
Founded in 2011, Palo Alto, Calif.-based Kahuna has between 25 and 50 employees and somewhere between 100 and 200 clients, although Marchick declined to get more specific.
In addition to its $11 million in Series A this past February, the company has had two seed rounds, one of which brought in $2 million in October 2013. Investors include Softech, Tim Kendall, Facebook’s director of monetization, and AdMob founder Omar Hamoui, in his new role as a partner at Sequoia Capital.
