Thought Leaders in Mobile and Social: Rob Jewell, Founder and CEO of Spruce Media (Part 3)

Sramana Mitra: That would be great for the Facebook API. Facebook right now [has] three billion [dollars in advertising revenue] or something?

Rob Jewell: Yes. I think they’re probably four billion.

SM: Four billion. So, how much of that is going through this kind of optimization? How much is going direct?

RJ: I don’t have exact numbers, but from things I hear, at least half of it is going through the ads API companies. The ads API program is fairly new.

SM: Basically, there’s significant value to be added through the optimization process.

RJ: Absolutely. And I think Facebook was smart in the way they approached this. They’re really a product company, and when you grow that fast as a product company, if you try to become an advertising company also, you’re going to stumble a little bit. I think what they saw early on is that they have an opportunity to continue focusing on their core product, and I would include the ad product as part of that product. But I think Facebook saw early on that they don’t necessarily need to be the one that handholds all the advertisers and provides all of these technologies and services to adapt to what those advertisers need. I think the team made a smart move early on to launch this program and encourage hundreds of companies to start building businesses on top of Facebook advertising.

SM: Talk to me about how you sell a customer on the ROI of your optimization technology. Let’s say a customer like Living Social, as you cited earlier, was going direct and was making XYZ metrics, and you come in and insert yourself in the middle and provide ABC or EFG metrics. Help me understand what metrics would Living Social be measuring, and how do you affect those metrics?

RJ: Each advertiser is measuring different metrics. I think what we’re good at is first, displaying those metrics in one place. A lot of people who are buying advertising now on Facebook have multiple systems where they’re doing lead generation tracking, revenue tracking, and everything else. They have to piece those together because Facebook doesn’t offer a uniform system or conversion tracking in a lot of these things.

One way we help is that you can see everything in our system. We’ve built proprietary conversion tracking. So, we have server-side APIs. We have all types of integration ways into our platform so that you can see the data in one place. You can see your cost data and your customer and revenue data on one dashboard. That’s fundamental in doing some of the more sophisticated things like multivariant testing and more sophisticated optimization to enable you to get a better ROI from your advertising. That’s one area. Then it’s the features we have.

SM: Going back to the question that I asked, how much of the metrics can you improve? What is the effect of your introducing an engine into the process?

RJ: It varies across the board. We’ve had customers who’ve been able to do two times what they could have done otherwise. We’ve got customers to do a 50% better job. It’s across the board. It’s one of those things where we want to make sure our pricing is low enough where customers don’t have to think twice about it.

For instance, we’re roughly charging under 6% of media spending. To get 6% more efficiency out of your buying through our platform is very easy. Customers who are using other platforms or are using Facebook, and we show them ours, they know all of the limitations and hurdles they’re facing. It’s basically that they’re spending too much of their time on the non-value added traffic, analysis, and everything. They know if they can get over the hump on some of those things, they can improve their efforts by at least 6% but more likely 50% or better.

SM: In terms of the service, do you also do the full management of the process? Or do you act as an agency? Or do you just slice into your technology?

RJ: We do both. We originally approached the market building our product to be fully licensed and self-serve, and that was going to be our only business. When we launched, since we were one of the first to build it and we were early on in Facebook advertising in general, we realized when that technology got to market a couple of years ago Facebook was so new as a channel that people didn’t even know how to use technology to make their Facebook advertising more efficient. They barely knew how to navigate all the different ad units.

This segment is part 3 in the series : Thought Leaders in Mobile and Social: Rob Jewell, Founder and CEO of Spruce Media
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