Like many efforts among digital advertising entrepreneurs, one business idea begets another.
Michael Brown, CEO of Vancouver-based Adacado, is no different. The HealthPricer comparison shopping engine that he and his team developed led to the realization that they needed to find an efficient way to assemble and optimize display ad creative in real-time – a practice commonly known in the industry as Dynamic Creative Optimization (DCO).
Several years ago, DCO players Teracent (acquired by Google), Tumri (Collective) and Dapper (Yahoo), as well as smaller players like Adroit Interactive (MediaMath), were all the rage as M&A fever swept through – sometimes mercifully. More recently, many ad buying platforms claim to have their own homegrown solution – or are looking for a DCO partner, which is where Adacado hopes to fit in.
“What’s in an offer? It’s a product, image, price and a value proposition. Initially, we looked at [Teracent] and Dapper to see what those guys were doing and got a vision for what we called an open ad platform. That was the beginning of Adacado,” says Brown.
Today, 17-person Adacado enjoys 15-20% month-over-month growth in revenue, according to Brown, who declined to provide further detail on financials.
AdExchanger spoke to Brown recently about his company and industry trends.
AdExchanger: Many retargeting companies would say that they offer this type of product already. Where does Adacado fit in?
MICHAEL BROWN: Some companies are strong in retargeting but are not incredibly flexible in what they allow the advertiser to do. They’re more of a black box solution, frankly, where the advertiser does not know what data they have and how they can extend the capabilities of that retargeting campaign. We can help prospect and build the branding. Retargeters are simply returning customers…to their clients. It’s recycling. Prospecting is continually going out and finding new clients, which is what the bigger and more global brands are interested in doing.
For what you’re doing today, is it primarily PC-based display, and how do you see that playing out?
Yes, it’s primarily PC-based, but our ads aren’t limited to PCs. Our ads run on mobile anywhere. We haven’t seen a huge push with real-time creative into mobile yet, but we see it coming. It’s tougher to use granular data in mobile and then work the ads with real-time creative, but it’s getting there.
Do you consider Adacado an app, if you will? What does that mean to you?
No, we don’t consider ourselves an app. We do have an AppNexus app and a number of customers that use it, but it’s a limited-function version of Adacado. In our opinion, real-time creative is 50% of the [impact in the] real-time advertising space today.
And real-time creative and Adacado is much more than an app.
Does Adacado sell media as well as the dynamic creative optimization capabilities?
We don’t sell media at all since our business model is to go and partner with the real-time ad ecosystem. We believe that agencies and trading desks will use software and technology like AppNexus and Adacado to run their advertising programs.
We are the tool sets to help agencies and trading desks do their job.
How does pricing work?
Pretty much everything we do today is CPM-based and volume-driven. North American pricing starts at a 35-cent CPM and then comes down quite significantly when you’re getting into hundreds of millions [of impresssions delivered] per month.
Ultimately, Adacado is a self-serve platform, but we still provide services, and we almost always run a few campaigns for [clients initially]. Still, we’re no longer involved with any managed services as a business unit, per se. Clients are just using the software and pushing towards a monthly fee, which often makes much better sense for them.
What about international strategy versus North America?
We are already international. The AppNexus app that we created gave us global exposure, and the company went “global” before it went “local.” Today we certainly have business in North America. And there are eight or nine different trading desks and agencies in Europe we’re working with. We also have business in India, South America and Asia too.
Any geographic trends that you see among your clients?
I’d say that new markets like South America or India which come online are 100% performance-based. They’re focused on performance of ecommerce and driving the transaction. As the markets mature like North America and Europe, they’re still focused on performance, but they’re starting to look at branding solutions, prospecting and the bigger promise of a real-time advertising system.
What’s a use case for your platform?
We’re working with a company in the US that is doing advertising campaigns in and around flight behaviors. For example, they know when somebody buys four economy tickets to London. With our technology, we help them to remarket off of that information to hotels, car rental companies and so on.
How is your tech different than other dynamic creative optimization firms past and present?
In the past, issues with DCO persisted around effective workflows and delivering real-time creative. We have all those capabilities and more.
We have two ways that our clients work with us. One is as the operator defining the rules of the campaign. There’s a work flow element in that: “Where is the data coming from? What does the ad look like? Which elements of the ad are dynamic and which are constant?”
We can set our own cookies and work with our own first-party data, too. The learnings from the platform are not only used with the algorithms to drive performance, but the learnings of the platform are recorded by the advertiser who can redeploy their campaign.
It’s about running a campaign, learning from it, adjusting the campaign, learning some more, adjusting the campaign, learning some more. Some of it is done by the algorithms, but essentially 50% of it is still done by a person changing the campaign. That’s the big difference. We also believe that it’s the best way to engage agencies and advertisers because eventually many things become entirely algorithm-driven. This is a tougher one to get there because there [are] just far too many parameters that need to be worked with.
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