SaaS Interviews with CEOs, Startups, Founders
1687 When Programmatic Bidding Reaches OTTs Like Sling, Roku, He Makes Money
07 Mar 2020
Chapter 1: What is the main topic discussed in this episode?
joined up with his co-founder back in 2015, taking advantage of kind of a programmatic approach to OTT advertising. These are through Sling, Roku, these kinds of platforms, maybe soon Netflix and Hulu as well. Again, adding a data layer to these placements. They have fixed costs in the form of placement fees with these guys. They make their margin essentially on their targeting capabilities.
They've raised 4.5 million bucks in capital, currently raising another seven last year, sorry, in 2017, sorry, in 2016, actually. reach 25,000 users, 1.5 million in volume going through their platform. That's gross revenue. Hello, everyone. My guest today is Achilles Le Grave. He is the founder and product leader at Brandzooka. He develops and scales web services that disrupt and delight.
In addition to building teams and create the space for people to deliver extraordinary results, and develop product market fit. He writes for publications like Ad Age, Dow Jones, and speaks regularly on subjects ranging from entrepreneurship and ad tech to agile and product development practices for organizations such as Stanford and IDEO. All right, Achilles, are you ready to take us to the top?
Absolutely.
All right, so tell me more about Brandzuka and also the revenue model. Is it an agency or a SaaS model?
Yeah, so Branzuca is a video advertising platform that is for the first time unlocking the crown jewel of advertising, and that is the TV screen. So we basically marry digital advertising with TV, making it possible to… run ads in the same way that you would expect to from Google in a very targeted way and then delivering those ads on primetime TV, which we think it's a It's pretty cool.
Okay, so So the obvious question, right, which I'm sure you have an answer for is, OK, you saw that I visited Travelocity on my computer. You know, I have an upcoming trip to Tulum, Mexico when I'm watching The Voice tonight on ABC. How do you put a Tulum ad on my TV? Is it cookie tracking? What's the tracking?
Well, so in terms of tracking technology, we leverage over 20 DMPs. These are data management platforms. So there are giant companies think of the NSA except not not government funded, whose entire job is to keep track of behavioral segments online. These are companies like Oracle data logics that also help fuel targeting on Facebook, we're able to access all of that data.
Why that seems like a big deal. How are you able to access it all?
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Chapter 2: How does Brandzooka integrate programmatic advertising with OTT platforms?
I see. And so that that is.
So you would say the big difference is they're going off to the kind of the big enterprise folks. They have a big inside sales team. You're going after the long tail, which is much bigger, but it has to be a no touch sale.
That's exactly right. So what we find is, you know, when you go out to a large agency like Starcom, unless you have a quarterly spend that's literally in the millions of dollars, there's nothing those media agencies can do for you.
Yeah.
Because we end up seeing very large brands and it's very repetitive. Brandsuka gives you a self-service model that allows anybody to, in a couple of minutes, launch a primetime TV campaign over programmatic. And then our internal machine learning and algorithms allow those media buys to significantly outperform what humans at agencies are able to achieve.
Got it. Okay. Makes good sense. I get the product now. Tell me more about the business. So how are you making money? Is it a cut of spend to your platform? Is it a SaaS play? What's the revenue model?
Yeah, so, you know, we spent a lot of time looking as to the positioning of the platform from a revenue generation standpoint. And what we found is a lot of people have tried to provide self-service advertising platforms for folks, and they generally have gotten it wrong. You can't monetize the long tail through subscriptions. You can't monetize the long tail through flat fees.
It just does not... It does not set the right relationship with the end user and what the end user is trying to achieve, which is performance. So at Brandsuka, we take an approach that should be readily similar to what folks experience on Facebook or AdWords. It's, again, a completely free platform to access and use. And we monetize off of the targeting features that do engage in the platform.
So if you go in, and you decide to launch a campaign that is targeted very broadly, let's say you want to target anyone in the universe, there's no value-added features that we're engaging for that campaign. And so for that campaign, Branzuca's monetization would be $0. If instead, as you're creating an audience, you decide that you want to
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Chapter 3: What tracking technologies does Brandzooka utilize for targeted ads?
Okay. Right. Yep. So, so to actually serve that inventory, you're paying a penny, uh, to sling depending on how refined or how broad, right? That a hundred dollars will be split also into targeting costs.
And what's your markup? You have to make money here.
The targeting cost is the value that Branzuca is providing. It's our monetization.
Again, so Achilles, if I put $100 through your platform on Branzuca.com, you'll say, okay, $80 of that's going to go to Sling. $20 we're keeping. That's our targeting charges. I'm trying to figure out what margin are you taking?
Well, it would be that $20.
Oh, you're taking 20%. I guessed it right.
Yes.
Oh, okay. I didn't know that.
You didn't say that. No, no, no. But it's not a flat fee, right?
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