Thursday, October 22, 2009
Interview with Aaron Finn, AdReady
As part of our coverage, we regularly run interview with local companies and entrepreneurs. Today's interview is with Aaron Finn, CEO of AdReady (www.adready.com), who tells us a bit about AdReady and how it fits into the online advertising market.
Tell us a bit about AdReady?
Aaron Finn: We're really trying, at a very high level, to make display advertising as accessible as search advertising. We're really opening up the demand for display advertising. Right now, there's a lot of supply--a glut of supply--and we think what is missing is the number of advertisers who can participate. My background is in online display advertising at Classmates for six years, one of the largest display advertisers in the world. I saw that what made it work well was display advertising, and I wanted to give the ability for every marketer to do some display advertising. Relative to search, Google has claimed it has 1.4 million search advertisers. Literally, the total for the display advertising market is 44,000. There's a gap which exists, and that's what is keeping display from being a bigger share of the market overall. Our goal, as a company, is to drive the number of display advertisers to 1.4 million or more, by lowering barriers to entry. Today, there is a big cost of entry in terms of creative and media for display advertising. It's extremely expensive to build a display ad, and to sign a contract with Yahoo--you're looking at a minimum bid of $10,000 or $25,000 for display advertising, which prevents lots of demand from coming into the system. Plus, if you think of search, you'll find that the cost of implementing a search campaign, relative to the budget, is somewhere less than five percent--including building the ad, testing the campaign, and buying the media. In display, on average, the cost is 25 to 30 percent of the total campaign budget, and depending on the size of that campaign, it could be as much as 60 percent of the budget and upwards. Most of the time, people realize that display is not working, saying--it didn't work for me, it was too costly. What AdReady has is a tool that allows you to run a display ad, with little to no cost, and test that in a small way. They can come to AdReady, build a banner ad for free, tell us how much to spend on media, and we will recommend a media plan and you can transact that with just a credit card. We've taken the manual, costly steps out of the process, and our technology provides the intelligence to let you know if you're running a good display campaign, and what works and doesn't. We'll recommend the best ad for a particular category, and provide all the reporting and optimization you might expect for a Classmates-style advertiser.
You mention the creative is expensive, how have you reduced that aspect of the cost?
Aaron Finn: We have a library of over 800 templates, with performance data attached to them. Our technology includes a customization tool, which allows you to make those your own. You can upload your own logo, change the text, upload images--all for free. We also make seven different sizes of ad with one customization, in two different file formats--so you get fourteen different ad units for zero cost.
Who would a typical client be for your firm?
Aaron Finn: For us, it would be an advertiser underserved by the agencies, even the digital agencies. Some of our premier customers are like Alaska Airlines, Atlantis Resort, the Jacksonville Jaguars, and the University of Maryland. They're not huge advertisers, and wouldn't command the attention of folks like Digitas or Avenue A, but they know display ads are important. They know consumers are online more, and they need to be there. We think of it as the torso/mid market of advertisers, who have been completely underserved on the display side.
Are advertisers seeing this, and what puts you above other competitors?
Aaron Finn: The difference is we have an advertiser centric, display platform. It's media, tied with a demand platform, and tied with creative generation--it's a full system. We provide all the services an advertiser needs to run display. We don't just do creative, and we don't just do media, we've got a combination which is extremely powerful in terms of effectiveness.
How has the economy been impacting online ads and your clients?
Aaron Finn: For us, we've been operating in the performance area, with exchanges, networks, and publishers like Yahoo and EPSN. There is a lot more demand, because of the decline of traditional media. Where the hit is in display is in high end brands and premium inventory. But, in performance so far in 2009, our effective CPMs and sell-through are up. Even though performance is 75 to 90% of impressions, it's only 30 percent of revenues in the industry--we'd like to see that grow, as branded, premium advertisers decline. We've seen great growth in terms of our client base, and their average ad spend, and it's been up as the year progresses. Marketers are trying to do more with less of a budget, and this is a great way, and a second step after search. They're finding it very effective.
Finally, how big is the firm now, and is everyone here in Seattle?
Aaron Finn: Yes, we're all in Seattle, and we're now at 50 people.
Thanks!