Thought Leaders in Artificial Intelligence: Adgorithms CEO Or Shani (Part 6)

Sramana Mitra: How do you charge?

Or Shani: We charge is take a percentage of the media spend.

Sramana Mitra: You operate like an advertising agency essentially.

Or Shani: Yes, a little bit. I think it might come up to the same numbers in terms of cost or percentage. At the end of the day, the value and level of transparency we bring to the client is so much more tangible.

Sramana Mitra: Yes. Given the state of online marketing, you can only, at best, do a mediocre job manually. The better the algorithms, the more automation, the better the results. It seems like yours is completely in that end of the spectrum. I don’t doubt your ROI explanation and that everything is very transparent, algorithmic, and mathematical.

Or Shani: I’ll even add something more to that. Because you’re using sophisticated technology, sometimes it can create a lot of fear with potential clients. The fact that you are very transparent creates a lot of consonance within the client. For us, that was very important. We have examples of people writing back to us and saying, “We’re afraid of your type of technology. It’s like the terminator.” The fear is there.

Sramana Mitra: What is the minimum budget level of media spend that you start at? What sized client budgets do you work with?

Or Shani: The hard floor is somewhere around $3,000 a month. We get a lot of incoming leads and we don’t just judge them by how much they spend today. We think of more of the potential. Is this a real big business or is this just going to stay content? In other words, if we can prove that we can take you to 300% ROI, will you be inclined to spend more? This is one of the things that is really important to us.

We’re going to license the technology, but we want to see the potential. We see it so many times with so many clients. They come to us with very small budgets not because they don’t have the capacity. It just doesn’t make sense to them. By untangling everything they did before and helping them see the light in a way, they become clients. It also changes the way they do business. We had a client where we had to open up another call centre to support. This is also our pride and motivation.

Sramana Mitra: Very interesting. Tell me a little bit about your company. What are the vital statistics of the company? How big of a company are you? You said you’ve been around for six years?

Or Shani: Yes.

Sramana Mitra: You said you’re public?

Or Shani: Yes. We bootstrapped the company. We never raised any money until a year ago when we did an initial public offering on the London Stock Exchange. We raised $42 million but up until that point, we didn’t raise any money. When I started the company, there was a conference I attended. They brought a guy. Unfortunately, I don’t remember his name. He said something that wasn’t standard. He said, “Don’t raise money. The instinct of just go and raise money as fast as possible as much as you can doesn’t mean that your company will succeed.”

He talked about trying to build the product first and making sure that there is a real live business behind that. He talked about two different aspects. First, to make sure to keep your equity. Second, making sure that  you raise the money when you’re ready. We followed the same route. We had a lot of opportunities along the way. We had a lot of term sheets. We had to refuse because we were already so much more bigger and we didn’t need it.

This segment is part 6 in the series : Thought Leaders in Artificial Intelligence: Adgorithms CEO Or Shani
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