Building A Vertical Ad Network Powerhouse: Glam Media CEO Samir Arora (Part 7)

SM: What has amazed me about the last five years of the Internet is the inability to segment, which is Marketing 101. Why is it so difficult to get segmentation? It is the most fundamental and most powerful element of marketing!

SA: Exactly! Steve Jobs talks about when he joined Pixar he saw that people in technology think they are creative, but they do not understand how movies are made and people in movies think they are creative, but they do not know how software is built. Metaphorically, why do I have to be in Silicon Valley and New York every other week for Glam? Because they represent two fundamentally different points of view and both are necessary for a solution for brand advertising.

When Carl Portale and I visited the top brands’ CEOs and CMOs over 18 months before the Glam launch, what struck me was the consistent feedback we got from brands – they always start from their target audience focus first, then content, then brand proximity to other brands, along with prime time/pages in a magazine versus non-branded remnant placement. So segmentation around audience and vertical content is key in brand advertising.

SM: I think that is where not only your industry but the entire ‘big picture’ is going.

SA: With Glam Evolution what I am finding is that our customers are actually a brand advertiser and an agency. If we look at the advertising market at $600 billion and $640 billion in the US, direct response is roughly between 15-17% of that number. Almost all CMOs don’t even have it reporting to them directly. If you look at television, for example, most direct response ads are infomercials running late at night. Television advertising was once at 33% and is now down to 29%, but it is still the number one buy. Print magazine is at 17%. If you look at the big picture, 60-70% of brand advertising is in one of those media types today.

Agencies have teams focused on television, some print and Internet/digital. When the Internet spend is 3% or below, the learning begins. Given the web usage is already at 30% of media, brand managers today should be spending 8-12% of their total spend on the Internet, and roughly 50% of that on search and 50% on brand. In 10 years Internet will be 20-25%, with brand 70% of the spend. The reason is simple – if a user is looking for the nearest dealer for a BMW, it is too late in the funnel to try to switch brands other than price. The battleground of brand has in consumers’ mind and hearts already moved to the web, and the brands need to as well.

When we are selling living and we have a national sales force that is agency focused, we just make sure that quotas are double counted. There is no ‘my world versus your world’ mentality. Ultimately, the agencies should be involved as television dollars come to the Internet.

In our case, 99% of advertisers have come back for a repeat buy. They come with us, test, and come back with a bigger buy. We bend over backwards to listen to them and focus on making them successful. We apply and build technology for them. It takes a lot of technology outside of the ad server – we have built all the targeting technology in house in Silicon Valley. That is what Glam Evolution is. We built it out of necessity. We found if you are not in the performance business, you need to create ways to target, monitor and report brand engagement and return on investment. Glam Evolution is a 5-point targeting system – Audience, Content, Behavior, Primetime, and Placement. We are finding that this delivers an incredible value for brands as the ads and the content are packaged vertically, giving the best combination of mass reach, with niche targeting.

SM: In closing, what should we expect from Glam?

SA: We are a growth-focused and value-focused company. We are intent on servicing our publishers as our main customer. We just reached 500 publishers last week, which is a whole different size and scale.

SM: What kind of CPM ranges do you have?

SA: Depending on vertical and targeting they are in the  $10-$35 range. It varies by channel and media. We can go as high as $50-$120CPM on an integrated advertorial campaign in which there is a very specific brand engagement with a user. That number will continue to grow as our reach grows and our demo focus grows. We will remain vertically focused.

SM: I think your vertical structure will change quite a bit. You will still have your anchor vertical to drive your value proposition off of segmented areas.

SA: You were one of the first people to recognize the value of vertical networks with a consumer focus and a publisher network and have been writing about it consistently. As we are building and pioneering this model, the structure will grow and evolve. As an example, GlamTV, which we launched two weeks ago, is fascinating – it brings content from traditional media, video platforms (Brightcove, YouTube) and indie producers together and provides distribution through publishers for rights-managed content in which monetization can be shared – much like iTunes/iPod did for music. Here is an example of the level of strategy and pivots that Glam does – solving a problem using the “distributed model” of the web – fundamentally different and right on the pulse of how the web works today.
SM: I do not understand why people did not recognize this sooner, it is so simple.

SA: Judging from all the people who write about it, I think you understood what was happening before it happened. It is easy to get it today after it is proven, but to see it as a category before it emerged is rare. The next phase of this category is new technology and services for publishers and advertisers/agencies. Glam Insider, our intranet only for publishers, is a fantastic dashboard that shows daily campaigns and traffic. Unlike most ad networks, we are completely transparent to our publishers because we believe they should be involved in optimizing the packaging of the campaigns. Glam Insider has grown tremendously as an asset for the publishers. Glam Evolution will grow more as a platform for advertisers and targeting. As Glam’s reach continues to grow, you will see new channels in the women’s demographic, in addition to new audience focus and new verticals.

SM: Thank you, this has been fascinating.

This segment is part 7 in the series : Building A Vertical Ad Network Powerhouse: Glam Media CEO Samir Arora
1 2 3 4 5 6 7