Building A Vertical Ad Network Powerhouse: Glam Media CEO Samir Arora (Part 5)

SM: I always like it when a pioneering company takes a new approach with a solid business model already in place.

SA: I will tell you something about Glam’s history we have not talked about before. Most startups come to a decision point in the first two or three years after launch, where the original vision needs to be focused to survive. Typically, once they have used most or all of their venture capital, they try to find and solidify their business model. They then have to either re-start or focus. This is what I call the “startup wiggle” to find the business model “nugget”.
Just two and a half months after launch, with most of the capital still in the bank, I gathered the entire founding and executive team for an off-site. I did not want to wait two or so years to validate our corporate strategy. I wanted to take a closer look at our belief system and our assumptions, and review how the market reacted after the launch. They key was listening and being brutally honest with the lessons learned. After two days, we emerged with one slide that listed five items we agreed to focus on. There were 20 or so others we had to completely discard.

I can tell you with 100% certainty that Glam would not be around today if not for that meeting. We came back and went to the board with our results. I had planned to do a CEO search at the time, as I had already made the transition to venture capital prior to Glam. Tim Draper had a gut feeling there was something big here and that we would not find it unless I stepped in as full-time CEO. This was a big responsibility and change for my lifestyle, and I did it.

SM: What was your key finding?

SA: We decided to be 100% focused on media advertising, with no links to e-commerce, events or subscription. We chose to be vertical in the style segment, with focus exclusively on women as an audience. We chose Condé Nast’s Style.com and iVillage/NBC as our initial competitors. Most importantly, we chose to build a consumer brand, Glam.com, and a network of publishers.

We realized that in addition to being an owned and operated set of sites, we wanted a combination of a content and advertising network. We wanted exclusivity in prime time display and video placement ad space from our publishers. We would focus only on publishers who were professional, with high quality content across the style space for women, which is fashion, beauty and content for shopping.

We were initially finding very high quality voices, most of whom were either ex-editors or people from the retail industry who had a professional voice. They were interested in helping people build micro-publishing companies, much like eBay enabled Power Sellers.

SM: Tell me more about the dynamics of building a brand clientèle at the same time as a publisher base?

SA: It is usually a big challenge to launch a new, unknown company targeting top brand advertisers. In the fashion world, it is almost impossible to do. A new launch requires credibility. We decided to use the magazine prototype or the TV pilot model and offer free advertising for one month for select advertisers, as we believed from the get-go that content and advertising needs to be tightly packaged to be desirable.

SM: If you flip through Vogue or a similar magazine you are basically looking at pictures, most of which are ads. That is the dynamic of fashion.

SA: It is a dynamic of almost all brand segments, but it is especially true of fashion. We started in one of the hardest verticals, something I will never do again! The quality requirements are incredibly high.

SM: There are benefits to having to meet such high quality requirements.

SA: And that is our strength. Interestingly, Gucci for example, was one of the first advertisers of the Glam Publisher Network. Neiman Marcus was there at launch. That is about as difficult as it gets. We also refused to put any remnant ads in our network. This is one of the reasons Glam’s publishers and brand advertisers are extremely loyal – Neiman has been an advertiser almost every day since the launch, to give an example. Brand proximity, editorial quality and audience focus are critical for brand engagement.

From a monetization perspective, that decision took incredible fiscal discipline. Our revenue last year could have been double if we had accepted remnant “hit the monkey” advertising like all Internet companies do. However, it would only have grown 100% compared to the amazing curve we have today. The payoff two years later is incredible. The brands, publishers and audience all trust us. Those three are very hard to do.

SM: Asking for exclusivity from publishers indicates you are willing to accept responsibility.

SA: Glam’s success comes from our initial strategy of brand display advertiser focus, focus on publishers and distributed media, and our focus on vertical categories for users. I think the way Glam has gained credibility is by always being transparent about who we are. Taking responsibility, being consistent and providing superb service are the key values of the Glam network team and the reason Glam is known for deep loyalty, love and trust from our publishers.

This segment is part 5 in the series : Building A Vertical Ad Network Powerhouse: Glam Media CEO Samir Arora
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