Capturing Intent In Non-Search Performance Marketing: Zephrin Lasker, CEO Of Pontiflex (Part 7)

Sramana: How much funding have your raised so far?

Zephrin Lasker: We have raised under $9 million, and we have generated three times more revenue than capital raised. We are profitable month to month, but we will be investing a lot in the business this year. We may take on a bit more venture capital because there is so much liquidity in the market right now. Every large investor is trying to give us money.

I think the less venture capital we take, the better off we will be. We have been fortunate to have a flexible board that is willing to let us own and run the business. I feel that investors who want to be in our office every day would not help us out that much. With so much venture capital flying around out there, it has become a badge of success to raise a lot of venture capital. I don’t think that is true.

Sramana: That problem started in the mid-1990s with the dot-com bubble. Everyone walked around proud of how much they had raised, but they had no revenue.

Zephrin Lasker: All those things that came out of the crash show the problems. VCs were killing companies then. You still have to build the business even if you get venture capital funding. All they do is open the door; you still have to walk through it.

Sramana: There is a trend that I am noticing in the mobile gaming space where publishers that have one very successful title use in-game advertising to sell additional game titles they have created. That is a model that is really booming. Do you see that trend as well?

Zephrin Lasker: We do see that trend. In some ways, I think we can tie it into being in a bubble. The in-game space is so hot right now that if you can show you have a lot of players, you can get a lot of money. I am more skeptical about the value that is actually delivered to advertisers. I don’t know if that model is sustainable.

If a publisher spends a large amount of funding to acquire new players and is not able to acquire as much money through advertising as they spend on advertising money to gain those new players, then the loop will close. Everybody is just assuming that the model will work, but I am not convinced because incentivized models are being used to gain those customers, which I believe lowers intent. The customer’s intent may not be to sign up for a newsletter; it may be to sign up for an iPod. That confuses everything.

Sramana: What is your advice to app developers and game developers on devising a sound customer acquisition strategy?

Zephrin Lasker: When a user signs up and registers for these apps, some of them will opt in to one or more of our ads, and many of them won’t. That user registration data is collected by us for the application developer. We are essentially creating a free database for the application developer where they can go out and see which users did not opt in to the advertisement. That is useful because when that developer launches a new application, they can send out a notification to that entire database list to tell them about the new application.

Sramana: I have noticed that smaller game developers are monetizing their own applications by using other game advertisements. I am also curious to see if that model will work.

Zephrin Lasker: That happens a lot, and it is all fueled by spending of some sort. I wonder what would happen if you turned off all of the venture money in the gaming world, how the spending rate on those ads would change. I don’t know how much true organic revenue is there.

Sramana: Are you getting involved in educational applications?

Zephrin Lasker: We are just starting to. We will be rolling out into new sectors this year.

Sramana: Thank you for your time. All the best!

This segment is part 7 in the series : Capturing Intent In Non-Search Performance Marketing: Zephrin Lasker, CEO Of Pontiflex
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