SaaS Interviews with CEOs, Startups, Founders
1017 The New Nielsen? $12m in Revenue Says, Maybe!
07 May 2018
Chapter 1: What is the background of Peter Daboll and his experience in advertising?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Peter DeBall.
He has more than 25 years of experience in the science and business of advertising effectiveness. He spent his career developing and implementing analytical models and testing systems to measure consumer response to advertising. As CEO of Ace Metric, he's led the company in developing innovative metrics and methods for helping advertisers make better, more impactful video creative. He
He was the CEO of Bunchball, chief of insights at Yahoo, and president and CEO of Comscore Media Metric. He's received numerous industry awards recognizing his leadership in advertising research, including a 2011 Great Mind Award from the ARF and is a regular contributor to media outlets and advertising industry associations. Peter, are you ready to take us to the top? I'm ready.
My gosh, that's a mouthful. You've seen a lot, huh?
Yeah, I've been around the block, I'll say, but it's from old school business. just basic television all the way through some of the new media and some of the new formats out there. It's really been an exciting ride.
So tell us about Ace Metrics, kind of what space are you playing in and how do you make money? What's your business model?
Yeah, so when I came out of Yahoo and I looked back at the TV world at the time, this is like 2010, it really hadn't changed a lot in over a decade. TV was still bought and sold the same way. Advertising was done the same way. And so we decided to build a technology company around evaluating ads. And
The fundamental difference for Ace Metrics was we wanted to say we want to test every ad in the United States, not just a client ad here or there. And so our philosophy is you only know if an ad's good if you know how good every ad is good because we're all being bombarded with ads every day.
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Chapter 2: How did Ace Metrix change the advertising effectiveness landscape?
That's valuable for certain things. But for us, that gets tangled up in where the ad's running, how much media weight's behind it, not necessarily the creative itself. And so we wanted that pure form measure of the creative effect.
Okay, that makes interesting sense. Okay, give me some more of the backstory here. When did you launch the company?
So we launched in 2010. The cool thing now is we have campaigns going all the way back there. So, you know, we were talking with E-Trade and, you know, E-Trade wants to know how the Baby campaign compared to some of their new work. Well, the Baby campaign is now five years old, but we all remember it, right? So...
Um, that's the kind of thing that, um, you know, is really fun when you can able to go back with that much history. Now we have like largest ad database in the world now measured by what measures by number of ads that have actually been scored. Interesting.
Interesting. Um, where was your head at in 2010? I mean, were you already kind of, you know, you had an exit, you're a wealthy pad, plenty in savings. This is just fun for you. Or is this something like, I want to do this. And by the way, I have to make it work. Otherwise I'm broken on the street.
Well, it's kind of a, a, weird passion of mine that everybody focused on the measurement of ads. They ignored the creative. And so they measured everything else. They measured how much we bought, how many eyeballs we hit, you know, all of those things about delivery, but they didn't measure with what, and we all knew that in our heart of hearts, you know, a great ad when you see it.
And so that was really the passion that we wanted to go after. And coming out of spending 10 years in digital, we thought we were kind of uniquely qualified to build this for TV at the time, but for video, because no one else was doing it. Everybody else in TV land was doing it kind of the old way.
Okay, interesting. Now, have you bootstrapped this or have you raised capital?
No, we raised capital. Given this was my first merry-go-round, we wanted to make sure we had really quality VCs. How much total have you raised? We've raised about 20 million.
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Chapter 3: What innovative metrics does Ace Metrix use to evaluate ads?
I mean, some brands have brought their creatives in-house, are producing hundreds of pieces of creative a month, and just kind of puking it out there. And yet consumers are increasingly blocking, skipping, avoiding, doing anything they can to avoid it. So the question is what's gonna win in this battle is gonna be fewer and better.
And how do you know if it's better unless you test it and have a thorough understanding of the overall category to the facts. So that's really where we fit.
Guys, I get asked all the time, Nathan, you host all these interviews, hundreds of them per month. How do you do them efficiently? And guys, the answer is simple. People always agree to my calendar, back-to-back meetings. I batch my interviews to stay very efficient. And the way that I do it is I use a tool called Acuity Scheduling at nathanlatka.com forward slash schedule.
And the reason I use them is very simple. They keep my no show rate very low because they send out reminders about when the interview or the meeting is coming up. And also they make it very easy to schedule time, right? I don't have to go back and forth via email 10,000 times with people I'm trying to meet with. Okay, at nathanlatka.com forward slash schedule. Helps me so much.
And by the way, look, I like have so many meetings. I'm the best at meetings. Okay, I do them back to back. Very, very efficient. You guys know me. many people say I'm the most efficient they've ever seen. Okay. So I use the tool. It's so efficient. And by the way, I got Gavin. I said, Gavin, he's the CEO. I said, I want a great deal for my people.
He said, Nathan, well, most people get a 14 day trial. Isn't that great? I said, no, he's given us a 45 day free trial at Nathan Latka.com forward slash schedule. That's not going to stay up forever. So go get it now. Nathan Latka.com forward slash schedule. what you're betting on is that you can actually predict what you just said.
I mean, the reason people are vomiting everywhere is because they don't know what's going to work, but they know if they put out enough, hopefully one of them catches virality in a bottle.
Exactly. Exactly. Wouldn't it be great to have a sense of that before? It would. Yeah, it would. That's really what we're moving from descriptive kind of behavior to predictive behavior. And that's really where these emotions come in. Because if you see it, and that's really firing. And again, we're comparing against 80,000 ads. So we have a really big database.
We actually just published a paper. It's kind of interesting, which was using this emotion on how to win a Cannes Lion. How to win a what? A Cannes Lion, which is the big industry creative awards. And we did that by analyzing Cannes winners and then comparing it to the rest of the database and say, what do these things have that the others don't that makes them a Cannes winner?
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Chapter 4: How does Ace Metrix gather feedback on ad performance?
We'll certainly look at that. Yeah, you know, back to some of the economics. I mean, you're super healthy with 45 folks and 12 million bucks in AR. I mean, you're a good 100 grand above industry average in terms of revenue per employee in the B2B SaaS space, which is about 137 based off our data set. So, I mean, you know, what you're saying rings true. Your team, you said, is 45.
Where are you guys all based?
So the biggest team, I mean, you know, in this world, we're kind of all over the place, but the biggest team is in LA. So we have a core ground in El Segundo. We have a fairly big presence in New York and a few people in Chicago. And then we're just kind of everywhere, wherever the advertisers are.
And you mentioned earlier, you're growing really fast. That's why you're able to raise the capital. What are you growing at right now, year over year?
You know, we're growing at about around 20, you know, around 20 to 30. We did feel a bit of a slowdown, I think, maybe two or three years ago. I think the overall industry spending levels were off. And so we really are...
You know, we still have to be, and if you see like some of the agency, Martin Sorrell, for example, and other agency groups are seeing really sharp cutbacks in the traditional agency model. So we kind of have to, we're kind of in that ocean, you know, where we skip a bit of the ebb and flow. But comparing us to kind of comps in the research space, we're way above norm. Yeah.
we feel like we've got a solid thing, as I said before, when we're making money and we're able to maintain that, I think it's, it bodes well for us going forward.
And yeah. So like if we go back 12 months in December of 2016 today, again, and today you're at over a million a month. So it's fair to say what you're at about 800 grand 12 months ago a month. Yeah. Yeah. That's good growth. Yeah. A lot of these companies kind of kind of in the media space, they were taking like a percentage of spend or trying to get a chunk of attribution, the famous ad tax.
And now they're trying to figure out how to go a SAS model, but they're stuck in the middle and neither one's working.
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Chapter 5: What is the business model of Ace Metrix?
Or, you know, advertise at ad age and, you know, promotional stuff. And what we really found is, uh, well-written personalized outreach on an ad that, uh, we've already scored because we score everything. We already know more than the advertiser. That personal outreach directly for me is what's really causing people to read and, and pay attention. And so, um,
going back to small ball and not trying to conquer the world, uh, and really go one-on-one with all these advertisers has really been, um, really been successful.
You'll take one of their videos that who, and they're not a client yet. And then email them and say, here's some recommendations based off our data set. And they say, we want you to do it for us. Yeah.
Yeah. You know, here's an ad that broke last night on the voice. Um, we thought you'd be interested to know how this stacked up, you know, and, and, Are you going to open that email if you're a CMO somewhere? Of course you are.
Now, if you look at kind of your team and the people dedicated to sales and onboarding and all that, I mean, do you try and back into a fully weighted CAC so you can understand lifetime value and some of the other economics?
We do. I mean, we are constantly looking at optimizing the best way to kind of go to market. But a lot of times clients are interested in really starting with pre-testing. So really understanding ads that they've got. That's a huge pain point. They want to make sure they don't blow it. Uh, give me 10 ads that they're kind of building in a campaign.
Let's test them, get started and then move into the description and kind of, um, you know, higher end add ons as we go.
Well, so let me ask, let me ask this a different way. Um, what do you like to, what do you like to opt on as your payback period for, right? How, how quickly do you want to get your money back on, on acquisition?
You know, on acquisition, almost one contract covers it, right? For a year. Yeah. Yeah. Got it. It's really that one annual contract, but I think it's also building a relationship with these marketers.
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Chapter 6: How does Ace Metrix compare to Nielsen in the advertising space?
Number one, what's the last business book that you read?
The last business book I read are the art of the start, which is, uh, my son's in an entrepreneurship school, believe it or not, uh, out in the East coast. And he told me to read it. So it wound up being a pretty good book.
Number two, is there a CEO you're following or studying right now?
You know, I am really interested in the Southwest CEO. Um, And we've started to do some work with them, but I just think it's- On the transparency ads? Yeah, and it's just the culture they create in that company is just fundamentally unique from anything I've ever seen. And I think the culture side of a CEO's job is kind of downplayed. It's not as important to me.
I think that's what really makes a company great. And that's a good example of it, I think.
Number three, what's your favorite online tool for building your business? Cirrus.
Cirrus Insights? Yeah, we use Cirrus all the time because we're into this individualized email and we need to track where it goes. And it's funny, you know, sometimes I'll send a note out, even if it's not favorable about a campaign saying, look, you know, you should know this. uh, we can track, we get, you know, a hundred opens within a company within two days.
I mean, so that, that ability to track, it sounds pretty simple minded. It's not really that new, but boy, it works.
Yeah. Serious. And you guys are actually about the same size. Brandon Bruce, the CEO just came on a few days ago. Um, yeah. And they passed 150,000 customers doing about a million bucks a month. Uh, really healthy growth there too. Yeah. They're doing great. All right. Number, uh, number four, how many hours of sleep do you get every night?
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Chapter 7: What challenges has Ace Metrix faced in scaling its business?
But there were some emerging technologies. And so I really try to keep. on that fringe, the fringe of what's next, not the mainstream stuff, but really the fringe of some of the emerging technologies and seeing what's going to be the next big thing.
He's still a part-time bartender. He just didn't want to admit it. Peter with Ace Metrics launched back in 2010, had some success in the space before this, really understanding inside of other companies, how the space is working, saw an opportunity to do this kind of real time, with video, doing it all over the place.
The team of 45 remote now serving 95 clients, helping them make their ads better, specifically their video ads. They did about 800 grand in terms of monthly recurring revenue 12 months ago in December 2016.
Now over a million bucks a month, over a $12 million run rate, retaining over 90% of their customers year over year, super healthy payback period of 12 months and 20 million bucks raised to continue changing and updating this industry. Peter, thank you for taking us to the top.
Thank you.
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