Facebook Strategic PMD Glow Raises $1.3M, Expands to L.A.

damian-glowGlow Digital Media, one of Facebook’s Strategic Preferred Marketing Developers (SPMD), raised $1.3 million in its first round of funding.

Founded in London in 2009, the company supports direct response advertisers on their Facebook campaigns, and mostly works with clients in Europe, though 25% are based in North America.

“Up until December 2012, we were entirely self-funded,” Glow CEO Damian Routley told AdExchanger. “The funding is intended for increasing the pace of development, bringing on some really good people, investing heavily in the core asset of the Glow Machine platform, and also training people to help reach clients.”

The funding allowed Glow to open an office in Los Angeles, led by Dave Wamsley, who founded Adauction.com and most recently co-founded health and wellness application GravityEight.

Routley spoke to AdExchanger more about the plans for growth and expansion, how Glow distinguishes itself from other SPMD partners, and the impact of Facebook’s Graph Search and the Facebook Exchange.

How much of your business is with Facebook and what exactly is your business model?

We are laser-focused on Facebook. We work exclusively with performance marketers and those are the guys who want to get their audience to do something more than just a straightforward “like.” So we’re all about driving downstream conversions, whether those are actual sales or registrations or plays of the game.

We have our proprietary software platform, the Glow Machine, which was built specifically around ad creation, optimization, engagement, and then data science. People engaged with us have a direct license to the Glow Machine, which is on a task basis or a set of services where we’re operating that platform on their behalf. The majority of our revenue comes from that license model.

Do you offer managing services to help clients with the technology and training?

Exactly. We work with them on both bases. We step in and help them in initial period. We’ve worked with clients of various sizes, where we provided a very heavy client service initiative and then transitioned to a license over time. We used that initial period to help instill the excellent teams at those companies who would take over these campaigns. We’re there, right next to them, when they are getting up to speed with it all

Who is in your competitive set today and how do you position yourself apart from them?

Other companies on the PMD list, they have worked to meet the needs of brand advertisers, and now they are trying to re-factor their systems, change their propositions, and get the data to meet the needs of the DR guys. We’ve had a two-year head start on this and are precisely aligned with Facebook for direct response, so we’re really well placed with that.

Based on that, we would say we are truly competing with two of the 12 strategic PMDs: Nanigans and Kenshoo. Those two guys are larger than us, in terms of people, but in a competitive scenario, I think our size makes us quite nimble. We can respond quickly to the needs of our clients and watch the changes that Facebook has in their marketing products.

How many people do you have today, and what hires do you have planned?

Right now we’re at 15 people and we’re growing really quickly. We’ve brought on 5 people since we closed our first funding round, and the plan is to double that, to around 30, this year. That growth is going to come in data science, engineering, and client service.

Was this funding a direct response to achieving the SPMD status?

It wasn’t a direct response to the strategic PMD status, but I’m it sure it helped. We were very late in those conversations around funding when that news came out. It was validation that the investors could have looked at and said, ‘We thought these guys knew what they were doing, but now we have this extra validation to prove it.’

We’ve been working in this platform since 2009, and to have the strategic PMD status is a good recognition of all the hard work we put into it. In addition to that, it’s also a reflection of our commitment to helping lead the way for performance advertisers. This strategic PMD status is the highest distinction of excellence and as such, it is validation not just for investors, but also for clients to continue to use our services.

What are your observations about the Facebook platform and the direction it’s going with mobile and its Graph Search?

Firstly, the number of deep Facebook platform integrations will increase. As Facebook becomes a key player in search, those companies that have a close integration on the Facebook platform will overtake those who keep it at arms length. It’s likely that the companies that have this integration are given prominence in the results purely because the quality of information feeding the engine is better, and this means a better service for the user.

Facebook is already incredibly effective on mobile and I have no doubt that we’ll see rapid evolution of formats and techniques within that channel, especially as more direct response advertisers shift spend in this direction.

The Glow Machine is also in the AppNexus App Marketplace. How has that impacted your business and what do you see happening in the RTB space?

We’ve had an app in the AppNexus App Marketplace for over 12 months and this has been a great learning experience for us, because it gives us a glimpse into programmatic buying.

I see a future where Facebook becomes the buying point for a vast proportion of digital media. Their understanding of the connections people have to brands, products, and each other gives them unique value to marketers. Facebook’s value is linked to the health of its ecosystem, and my guess is that we’ll start to see some form of exchange for that value where some of the ad revenue is shared amongst partner publishers, in an AdSense-esque model. Our relationship with AppNexus allows us to learn a lot and prepare ourselves for when that happens.



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