Add to iTunesJared Kopf - CEO, Adroll
Introduction
This week at ad:tech, Adroll is opening up to the public. Adroll is an advertising network that allows publishers to self-organize into groups that collectively can reach out advertisers. (If it sounds familiar, the service was reviewed on ReadWriteWeb during the private beta.) Today we sit down with Jared Kopf, the founder and CEO. We discuss his vision for Adroll, how the service has developed and views on the online advertising industry in general. Jared is a serial internet entrepreneur, before founding Adroll, he was a co-founder at Slide and previously worked at PayPal.
Links
Update: Transcript is now live below
| Sean Ammirati: Welcome to another episode of ReadWriteTalk, the people behind the Web. On this episode, I sit down with Jared Kopf, the CEO and founder of Adroll. Jared is a successful entrepreneur who helped found Slide. And before that, he was an early employee at PayPal. So Jared definitely has an experience starting successful Internet companies.Adroll is an interesting ad network that takes an interesting social network concepts and applies it to how advertising networks are set up. They’re launching publicly in Ad:Tech although we’ve covered them before on ReadWriteWeb when they were in private beta. I’m going to go through that link shown.
Also, as I mentioned on last week’s episode, we’re going to put this out immediately and then the transcript will follow later in the week. Let me know what you think about this format. So far, the reaction has been positive, so we’re going to go with this and we’ll continue to explore if this is the best way to work going forward. |
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| 01:01 | So without any more introduction, I hope you enjoy this week’s episode of ReadWrite Talk, the people behind the Web.All right. Well, I really appreciate you taking the time to join me today, Jared. If you could start by just giving me a quick overview of the Adroll service for listeners who may not be familiar with it.
Jared Kopf: Sure. Adroll is a targeting platform for small- and medium-sized websites to allow them to team up to sell their ad space together. Really for the first time, online publishers can earn more from advertising by working together, by grouping themselves into their own little, we call them ‘ad communities,’ kind of like their own little vertical ad networks organized around interests or topics or affinities of the publishers or their audience. |
| 02:01 | Sean Ammirati: Great! And it’s probably worth just before we jump too much in the interview, also letting people get a quick sense on your background. So could you quickly let people know what you did before starting at Adroll?Jared Kopf: Well, immediately before Adroll, I was a member of the founding team at Slide. I was in charge of distribution there. And before Slide, I was actually working for Peter Thiel at Clarium Capital doing venture investing. And many of the deals that I did ended up on The Founders Fund website before they fully launched their own fund.
And before that, I actually worked for Peter at PayPal and was the glorious assistant to the CEO there and in many respects responsible for crisis management and dealing with a bunch of different projects that spand product strategy, finance and occasionally other things. |
| 03:11 | And before that, I started my first company that was called just Drive and was in picketing company was funded back in in 2001 by MDB.Sean Ammirati: So you’re part of the increasingly famous group of PayPal alum?
Jared Kopf: Yeah, I guess so. Sean Ammirati: So as a founder of Slide, are you still doing stuff with Slide as well or is this now your full-time focus? Jared Kopf: This is a 100% my full-time focus. Sean Ammirati: Okay. And what got you excited about the, sort of, adroll concept? I assume the idea came to you while you were still at Slide? Jared Kopf: The idea partially came to me and it partially was talked about by a lot of different people in a lot of different ways. |
| 04:06 | Jeff Jarvis has written a handful of steps, knitting pieces about the structure of networks and the structure of online communities, how information would be and should be shared. Slide certainly was a part of that understanding that possible to have people be the network. And that was part of what gave a lot of the inspirations for creating a platform that was advertising but socially-powered, people-powered, as opposed to powered by algorithms.Sean Ammirati: Good! And so this week at ad:tech, you’re going to be making Adroll publicly available. Can you, kind of, walk backwards and just give us a sense of when did you start working on Adroll? When did you sign up your first customers? Just kind of what the history is leading up to the announcement this week at ad:tech. |
| 05:00 | Jared Kopf: Absolutely. I was under Slide until March of 2006. Slide was at that point, growing quickly on MySpace and it was clear that Slide was onto great things. And it was at that point that I thought I want to start my own thing and went of and started working on the technologies that ultimately became Adroll.It took a long time to build what we’ve built because in many ways, we started with a totally different model of how online advertising should work and have worked from that model that’s sort of different back to the world that we live in today and try to make those few things work together. |
| 06:00 | So we ended up building a new type of targetting model where we actually run the ad server, run the packaging engine, run the pricing engine, run the profiles. I guess run the system that allows independent people to create their own profile, set their own price on various ad spaces at their site appropriately so that they can be more easily discovered, both by advertisers and by other publishers and to connect.And the activity of connecting actually unites not only the site in an up front, visible, searchable way on the Adroll website, but it also binds together their ad spaces so that they can be sold at the same time. |
| 07:00 | So the amount of technology that, sort of, is operating behind the Adroll website took a while to put together. And so we’re now at the stage where we finally feel like we’re ready to battle test this in a public beta environment. I guess in a private beta environment which we launched in September didn’t really tell anybody about it. And then we started making just a little bit of noise in November, December.We’ve seen some phenomenal results for publishers. And I guess the big news was the public beta is that we’re actually creating incentives for people to work together. I’m happy to tell you a little bit more about that if you’re interested.
Sean Ammirati: Yeah, I would be. But right before you get into that, you said you had great results in the private beta. Can you share some of those results? |
| 08:00 | Jared Kopf: I can, but some of them are so much better than what we expected that I don’t want to be quoted on them. Because I don’t think we’ll be able to replicate them for the entire Web.Sean Ammirati: Okay. Just give me a sense. So when you’re saying that the results have been fantastic, is this versus AdSense? I mean, who are these publishers typically using before they have set up an ad as part of this Adroll private beta?
Jared Kopf: Well, Adroll in essence works alongside or in addition to AdSense or any other ad network or remnant solutions that a publisher might have. And it works particularly well for small- and medium-sized sites. So we’re on many ways the same spaces. We’re on the same pages. We’re also in the ad spaces. |
| 09:04 | And so where the AdSense will make websites a few cents up to a few thousand dollars in any given month. We’ve seen that the results are comparable with Adroll. And so depending on the site, depending on their audience, depending on how they tagged their page, what communities they are participating in, we’re able to generate revenue ultimately looking like, it’s comparable.Sean Ammirati: Okay. And if I’m a publisher, basically, I’d sell my inventory two ways. One based on tags and one based on the communities I’m part of. And if you can’t meet that in either criteria, then I can serve that ad some other way. Is that pretty fair paraphrase? |
| 10:00 | Jared Kopf: Yeah, that’s exactly right. The way our system works is we give publishers total control over their ad space. So if they choose to run PubMatic inside Adroll, they can do that and we’ll keep running PubMatic and PubMatic can sort of tell them how much they should ultimately make and Adroll will beat that price or they can learn Rubicon inside Adroll and we’ll beat that price.And we’ll swap those sort of remnant optimization solutions out when we get a better price. Now, we can’t always get a better price, but Adroll is designed sort of like a free option. And it’s designed in that way because most of the way they work were medium-sized and small sites. Oftentimes, they just don’t even happen. And that’s actually very similar to what happened on large sizes. Probably a longer discussion. But on large size, oftentimes a large site will sell between 5 and 30% of their inventory that they can’t sell at the rate card that they set, which is the same way that Adroll works every small size as their own price. |
| 11:15 | But then the remaining part of that inventory, they’ll either not sell or hold back or give to ad networks.Sean Ammirati: Right.
Jared Kopf: We’re sort of coming out from the opposite direction. We allow the smaller sites that are already making money and, to a large extent, making a majority of their money from having remnant solution ad networks. We’ll place those ad networks inside Adroll and then make money when we can sell above that price. Sean Ammirati: And the revenue that comes through the networks, you’re just passing that through 100%. So if you can’t beat the Rubicon price and I end up displaying a Rubicon ad, 100% of that Rubicon ad revenue comes back to me as a publisher? |
| 12:00 | Jared Kopf: So long as it’s inside Adroll, exactly right.Sean Ammirati: Okay. Okay. So the one company who seems similar to me would be Adify. How would your offering compare to them?
Jared Kopf: Well, we’re unique in some very important ways. I guess the key one is that we see ourselves, though we’re very early and it probably is, I mean, I even feel weird saying that we are targeting platform just because of the buzzword being platform. In many ways, that is what we are designed as, to be. And so we actually facilitate direct relationship between advertisers and publishers. Advertisers come to Adroll to find the audiences that they’re actually looking to buy on and purchase ads through Adroll, but ultimately directly from the sites themselves. |
| 13:00 | Sean Ammirati: Okay.Jared Kopf: All of our models, including the note, the nature of the community or the social advertising products are designed around an actual person who facilitates the relationship directly, which makes us much more appropriate to brand advertisers.
Sean Ammirati: Okay. So picking back up on something that you touched on earlier, the press release that you highlighted that you were going to be giving up to 50% of the fees back to each community, which I think is such as on some of the incentive stuff you’re doing, can you explain how that works, though? Jared Kopf: Sure. We could actually spend a lot of times just talking about the numbers. Sean Ammirati: Yeah. Jared Kopf: But the important part is really not so much what we keep or pay but what really now it’s possible with an entirely new approach to advertising. |
| 14:01 | So that new approach is where in essence taking what has been not only historically, but really what’s represented today in online advertising as a network, a top-down hierarchical organization that’s rolled by a third party and turn that into a more open more freeform that a virtual community, that any publisher can participate in and can use to sell their own ad space and can use to participate in and help others sell.And even in certain instances, sell on behalf of other publishers and work together. Rather than taking the top-down hierarchical approach, we take a bottom-up self-organized approach and ultimately have our incentives in place to support that and to, sort of, describe the incentives. |
| 15:09 | Publishers who create community are compensated for creating the community. Publishers who are participating in communities and sell on behalf of that community on other sites are compensated for that. And then everyone participating in the community actually ends up making more money because of the design of our system, which is that we ensure all participants in the community are earning more together.Because while we could charge more for the activities of aggregating these hard-to-find and hard-to-buy ad spaces and packaging and pricing, together we actually charge less. And the extra revenue, that’s generated by selling together is shared by every participant in the community. |
| 16:06 | So the actual numbers and working out roughly on the order of giving 50% back but the reason is whereas in the normal buy, we charge X, we charge a third less. So the net for selling in a community and we’re giving that back to the community, and then the community leader can actually increase the price of their community so that everybody ends up making more through that sale and the community leader takes a cut of that.And so I love to do a longer podcast session with you. We talked about the economic indications, but I wouldn’t want to bore you.
Sean Ammirati: I think that’s a really good overview of the targeting and how the information flows and the economics flow at a good high level. One of the things that I am interested in is how do you pick who’s part of this communities once the selection processed to be part of an Adroll community of advertisers or community of publishers, if you will? |
| 17:01 | Jared Kopf: So the way the communities form has been organically. The communities that are on the site are about 70%. I forgot exactly what percentage, but it’s not 70% of what have actually been started by members in the community and have been led or moderated by those members. So in many ways, the community is like any other kind of online community, where it’s the people themselves.In this case, they happened to be website owners and publishers and bloggers. They come together and federate and the way that a member join and participate in a community is largely based on getting the approval of the community leader or the moderator of that community. |
| 18:00 | So in some ways, it’s kind of like LinkedIn. People at LinkedIn go to you because they actually do know you and they care about the reputation and they want to find advertisers with a viable partner. And so that’s generally how we answer the issues of keeping the sites and the communities very high quality and also facilitate growth because people who start community can invite other people in.They can all be found publicly now on the website so that others can go and find communities that are relevant to them and join the communities that are open and be joined. And approval is automatic. But if people join and they’re not appropriate, they can always get booted. And then other types of communities can be exclusive or semi-exclusive. And the exclusive communities where there’s really somebody who has a great brand that needs protection and are very, very, very selective about who can participate with them. |
| 19:04 | That’s really where we can be compared to some of the other vertical ad plays, but that’s really just the subset of what’s possible on Adroll.Sean Ammirati: Got it! Okay. So that makes sense. So basically, there’s a spectrum. But really, it’s kind of applying the social network. You have to be in agreement and people have to be comfortable with that.
Jared Kopf: Yeah. Yeah. In a way, it’s kind of — I don’t need to cut you off. Sean Ammirati: No. Go ahead. Jared Kopf: In a way, it’s kind of like, we believe that there’s enormous value and that’s been demonstrated in the realm of ad networks. And so we support ad networks, but we also support ad co-ops, places where people would actually come in and work together. And the nature of that and the benefits of it were whether it’s people exchanging traffic and getting free traffic from other members of the community or just working together to better the price that they can sell their inventory out when they’re selling an audience is based on an idea of cooperative online advertisement. |
| 20:12 | And that, I think, is really the powerful concept that we’re really extending about realizing the provision for business.Sean Ammirati: Yeah. And I think it’s really interesting. So let’s just step back for the last question because you’ve been kind of driving a lot of — and being part of a pretty influential companies on the Web for quite a while now. So independent of your role at Adroll, just kind of two questions here that are mere opposites of each other.
What concerns you most about the online advertising business in general right now and what excites you the most about it? Jared Kopf: So I really want to spend a little bit more time thinking. Sean Ammirati: Okay. |
| 21:00 | Jared Kopf: But concerns, I think some of the concerns, to disentangle the self-interested answer from a real honor answer that I want to look about on 20 years from now and say, “Glad I said that.”Sean Ammirati: Yeah.
Jared Kopf: I want just a couple of moments sort of talking about it. That’s a really great broad question but right now, at this certain time, the things that I’m most excited about are that online advertising has the potential to really become part of the fabric of people’s communication. And I think part of what inspired me at Slide and today really what is the essence of Adroll is that the activity of communicating is a social one. |
| 22:00 | And the activity of advertising hasn’t always been that. There has been interruptive advertising. There has been annoyance advertising. And I think we’re moving in a direction of having ads become part of the way that people communicate and not in a very privately invasive way, but in a part of a fabric of communication, how people actually interact.I think John Battelle does a really great job of describing conversational media and how voices can be more authentic when they’re appearing to and appealing to a smaller audience and giving advertisers the opportunity to fold into that is really powerful and exciting and thrilling to be a part of it. And I guess at the same time, there is the double-edged sword in that, which is not only getting that message up, but having it be clear and crisp and not confusing. |
| 23:05 | Because ultimately, marketers — especially brand marketers — have every reason and every right to be very protective with their brands and very protective with the space environment that they feel comfortable support. But I think we’re reaching the time when those issues can be judged and can be measured and be tracked. And there can be the same type of ROI online that is present today in many of the traditional media business.Sean Ammirati: That’s a great question and a great comment to end on. And I really appreciate on the day that you guys throwing all this stuff and you’ve taken a few minutes to chat with us here on ReadWrite Talk. And good luck at ad:tech.
Jared Kopf: Total pleasure. Thanks so much. |
