There is a delicious joy for all of those that have watched, listened and commented on the advancement of a British start-up. I felt this joy when I spoke to CEO of Adfonic Victor Malachard today.
Victor, Wes and Paul (yes, we are all on first name terms here at GoMo) are the UK’s mobile ad gurus. Not only are they all clean cut, fresh faced, extremely clever individuals they have transformed a self-service mobile ad network into a successful business in the space of two years.
I would go as far as to say that quietly they are following in the footsteps of the US Silicon Valley biggies… but enough of that.
What is the story?
Adfonic have just raised another GBP 4.7 million from serial entrepreneur Gordon Shields.
Who is Gordon?
Gordon Shields founded leading telecoms re-use and recycling business, Shields Environmental, in 1979 and quickly adopted the challenge of making environmental excellence a part of everyday business. With regard to his entrepreneurial activities Gordon grew his last venture Regenersis with his team from zero turnover in 2000 to £100m and £6m profits before retiring as Chairman in 2008.
Interview with Victor Malachard
Bena: Hi Victor, huge congratulations. Lets start the interview with the funding announcement. I am happy for you but surprised at only one investor?
Victor: We had a lot of interest in supporting Adfonic’s growth from global investors. Due to the size of this funding round, we expected VC investment to be the main option. Following meetings with many of the leading VC firms we had a number of offers alongside those from our existing angel investors. After a lot of consideration, we decided to stick with our original investors.
As you would expect, a range of factors contributed to this decision including the ability of the founders to retain the level of control to drive growth and deliver on the business plan; and the fact that we had enjoyed a very successful and productive relationship with our investors over the last two years.
Bena: So, I have been a bit out of it for a while can I have a quick update on Adfonic and what you have been up to? I remember more about your launch than anything else!
Victor: We launched the service in July 09 and at that time it was only the 3 founders. We’re now over 40 peope strong, we have offices in London, Paris, Seville and New York, and more importantly we have over 8000 publishers on the network generating 15 billion ad requests/month.
Bena: Yes, local in the UK, right.
Victor: Initially in UK but due to the self-service capabilities of the platform we were able to get access to the longtail across the globe. So despite being local in the UK at launch we got eyeballs and attention from Europe and the US. We launched our New York office in January 2011 and with this funding we are going into Silicon Valley, Asia and the rest of Europe.
Bena: Great but what about the platform. I read in your press release that you are managing 3000 campaigns per month. Were these self-service campaigns or are you acting as an agency?
Victor: The majority of our revenue comes from big brands. Some companies and agencies ask us to manage inventory which we do. But the platform is rich and dynamic enough to fulfill any requirement.
Bena: So, you main customers are brands or agencies.
Victor: We have a healthy mix of revenue from both brand clients and agencies but we have also had tremendous success hitting the long tail. So we have a number of smaller campaigns being deployed at all times.
Bena: I think we both know that the creative is essential for successful mobile advertising. Do you create the creative’s or does the self-service platform offer rich media?
Victor: The self-service platform offers it all. But we do have an in-house designer to help advertisers broaden their creative portfolio.
Bena: What differentiates you as a self-service platform?
Victor: From launch we focused on the technology. We knew the competition and realised that many of our competitors had created simple self-service platforms. Their hope was to focus on publishers first and then improve the site.
We turned this around and it worked for us. We focused on technology. We created a strong platform that is robust and easy to use and then built the scale. So it probably took us longer to get going but now we’re reaping the rewards.
Bena: So are you one of the self-service leaders in the UK?
Victor: I would say that we are the largest independent mobile performance marketplace in Europe, and are recognised as one of the top 5 globally.
Bena: What are the most successful advertisements for Adfonic. Mobile web or in-app.
Victor: At launch we also focused on app developers. So our app creatives and targets are first. We have 8000 publishers in the network and 75% of ads are on smartphones.
Bena: So what is the key of having great click through?
Victor: The best campaigns have the highest inventory. The more inventory our intelligence can place the best performing ad. This is where we improve the message behind the creative by precise targeting.
Bena: I am thinking of writing an article on ad-spend in the UK. Can you give me some examples?
Victor : Mobile is definitely getting a greater share of budgets. In US we’re now seeing monthly spend per campaign well in excess of $100k, in UK 50-60K and western Europe 20-25K per month.
Bena: Interesting. I have some stats from other players and old AdMob stats it would be interesting to see if there are any changes or how much this has increased since 2009.. But sorry, I am just talking out loud!
What is the plan for the next year?
Victor: To carve a greater lead in the UK and European market. We want to accelerate our momentum, consolidate our strong position in Europe and continue to expand on a global basis.
Inmobi is Indian; Buzzcity is Asian and Adfonic is European.
Bena: OK, last question. Can you describe the first two years of Adfonic?
Victor: (Pause). Incredible. The three founders of Adfonic had a vision and its coming into place. We first launched the service and 2 years on are experiencing a considerable snowball effect. We had a game plan and the three founders are still here and still creating an amazing business.
It has been an unbelievable ride and particularly the last 12 months during which we have increased tenfold. We had 8 people in Q2 and now its 40 plus. We are on track to have 70 by the end of the year and 100 in 12 months.