Interview with Anthony Plesner, COO of 24/7 Media

My Pleasure.

The Company was founded, and continues to operate on the premise of one-stop shopping for marketing, direct marketing, and advertising solutions on the web. We pulled together a variety of different solutions around that premise to meet our client’s requirements for promoting itself, it’s brand, it’s products, and it’s services.

Correct. In terms of acquiring and retaining customers using email, as well as banners, skyscrapers, and the other traditional ideas around advertising and promotional initiatives. We have also incorporated a sweepstakes aspect to the business, online promotions all built around some very sophisticated technology in terms of search engine optimization. Identifying traffic to drive it to our advertisers.

I came in somewhat late in the game, but the process in the beginning was that it was an offshoot of a more traditional advertising rep. firm where websites come into the advertising media picture. I think one-by-one it was a process of making ourselves available, and recruiting the must haves.

Sort of the honey principal. Once we were able to establish a critical mass, then people started coming to us wanting to start promoting their brand and building their online base. This is also true of publishers, once they saw that we had the critical players, both publishers and advertisers, they too wanted to be associated with us.

The web provides the ability for us to create virtual publications, channels, single sites, and the entire network. We think that this is a great proposition for anyone of our participants, as well as advertisers. The challenge to being in TV, Print, etc. is that we can’t offer that breadth. We can’t be specialists in all those areas. In time we would like to be a Representative of other organizations, Radio, TV, etc.

Our focus is incredibly focused on the net, which is what we understand and know best. We have to make that profitable and prove the sustainability of that model before we can add on adjacent pieces of the solution.

The real question is do we become an inch wide and a mile deep, or a mile wide and an inch deep? We have decided that the inch wide approach is the best.

First of all, the space is out of favor. That is for a couple of reasons, not because of a general malaise in the advertising industry, or in the marketplace. The Internet had such incredible hype and expectations that were somewhat fueled by ourselves, the press, and the general public’s expectations. When it fell short of that, for whatever reason, the media fell sharply.

Wherever there are eyeballs there has to be advertising and marketing dollars. It is one of the laws of the industry and that is not going to change. I am a great believer as are my 250 colleagues who work here great believers in this space, and the future of this space. We will have to adapt to it, work with it, we have to be more selective with it, we have to learn to use the word no, we have to learn to manage inventory, we have to set prices and hold them, we can no longer view the world as unlimited inventory. The simple laws of supply and demand apply to our industry as well as any other. Understanding how to apply them is part of our mandate going forward.

I am a true believer in this space, in that we can manage and grow and support the space much better. I believe that automation will help us run the company, the networks, and the requirements much more efficiently. We are looking at different aspect of that. We have learned that you can’t provide Gold Star service and get Bronze Star pricing; we are learning to balance the two things. We are learning to become more focused on customer services, where we can let the system work better.

We are learning to work better with our advertisers and our publishers in terms of managing their expectations and their demands. Developing better metrics, results, numerical focused. Realizing that we are not going to work on faith anymore. Coming up with the answers as to what will work better where, and being more consultative in working with both sides.

Whatever the reason the measurability became the only measure of banner campaign success or failure is beyond me. How we as participants in this space let that happen is beyond me.

I think as sales participants and evangelists for this industry we could have been more vocal in determining which factors would decide success and failure. We should have realized that you are looking at a banner campaign in some ways that are as effective as advertising in a magazine or seeing it in a TV commercial. Because it does drive offline recognition, it is bound to, it has to.

We are working with organizations that will help us demonstrate the impact of online advertising from a branding perspective in terms of driving offline purchases and decisions. This cooperation will show the relationship much better than click through rates on a banner campaign. We are working with our advertisers to demonstrate that CPMs are viable, vs. CPC or CPA. CPC and CPA are very difficult for us, in that we have no control over what happens after a certain event. We are getting wiser in defining the “A” in terms of the CPA. We can deliver customers to you, that is our role, but it is your product that needs to sell.

Exactly. Before, more responsibility was placed on us and less risk was placed upon the advertiser. I think the future is very much about our company recognizing that it has a role within the industry to push this space deeper into people’s consciousness. We have to come up with results, metrics, reports that all other media track. We are going to need to work with our publishers, to invest in that aspect of the business. What can spending a dollar with us achieve, versus spending that dollar in some other medium.

Coming from the background that I do, which is very numbers oriented, results oriented will help 24/7 Media to accomplish this. You must know why you are buying something and you appreciate the value of buying a Mercedes versus a Honda. The value must be much more apparent in this media, because we do have so much to prove.

DoubleClick is definitely the name in this field, the perceived leader in our space. They have certainly had some challenges on the privacy side and have taken up the mantle of that in terms of educating the community as to what privacy means. We took on the same leadership role in terms of the span issues. We were working diligently to identify from a public perception of what constituted span and what did not.

We have differentiated ourselves from DoubleClick in that we are the leader in direct marketing, and offer a complete product suite for our customer needs.

Our company in now getting much more involved in promoting the industry as a whole, research around the industry, explanation about what online advertising is all about and the results generated by it. There have been a number of key conferences where ourselves, DoubleClick, RealMedia and the other big players in this space are really redefining the industry.

We are doing a good job proving that we still exist, proving that this is a viable industry, and that advertisers should be spending money here.

In our industry as you know there are two main sectors the portals such as Yahoo! that take out the lion share of the advertising dollars.

At 24/7 Media, we provide for massive aggregation of millions of different websites from very small to very large. In essence we are creating a giant portal out of all these different sites from an advertiser’s perspective. I am a very big believer in the aggregation model, and the services and benefits it brings to both sides. That is the message that we are pushing out, that we are well, and alive and kicking.

Spending a dollar here is absolutely a dollar well invested.

DoubleClick’s DART is extremely well established in the marketplace. It is what the company was founded on; it is also becoming its focus once again. DART is it’s major platform for serving networks, Publishers, and Advertisers. We have developed Connect, which has a variety of features from reporting to speed to auto tagging to reliability and uptime that we think puts Connect very much into play as an ad serving technology.

And we have our networks.

Correct. We traditionally have been much more into email, which they have now identified as new product/service. We have added on other aspects of our business such as promotions, search engine optimization that differentiates us in terms of our overall approach.

I think so. We take a very consultative approach to customers; we are willing to work customers ranging from the very small to the very large. We don’t segment the market and exclude one in favor of another. Essentially we are a company that is driven by performance and finding results for our customers, and we do this with an overall focus on service, range of offerings, present our website in a different way, aggregate them in a different way, and package them differently.

I am not familiar with Gator, but where we are as a company, is that we have built Connect to be able to handle the latest and greatest. It has a very strong API, very flexible in terms of working with things and bringing things on, easy to manage, and the ease by which we can introduce new technologies to the overall system.

Ultimately, whatever is out there that is able to turn off banners and present them in a different way will always be out there, but people will be able to usurp whatever is being presented. If people move away from the advertising supported marketplace by turning off banners, or whatever then people will choose to not advertise in that medium. What it means is that instead of using advertising dollars to support that product, a subscription model is going to be introduced or increased significantly. When people realize that, they will no longer employ those types of tools.

Very simply, we are in a very ugly environment for advertising and specifically advertising on the web. You must realize that this is only for a finite period of time; it is not going to forever more. Advertising and discretionary expenditures are always the first to get whacked when the economy goes into a recession/depression. Some believe that you should increase your advertising in this kind of market, and we would love to find those customers.

They would receive more return for their money. I don’t believe that it is a nuclear winter, I don’t believe that it will go on forever, or that the world has changed dramatically. When it will, I don’t know.

We are building a company to do two things; to make sure we have enough cash in the bank to get to profitability and beyond.

Raising money, at which we have had a very good track record, is an important part of filling the gas tank to keep the engine turning over. Running the company, driving new sources of revenue, driving the business to be run better, managing our costs, managing our cash, these are the prime examples of what we do every day to get us to profitability.

We aren’t yet in the red zone, we have cash in the bank, and we have turned the corner in that cash is increasing. We are using this as another milestone to prove that we have a reason for others to invest in the company, to marry with a third party, to make it stronger, better.

The challenges on a professional corporate front is making everyone at 24/7 Media believes in this story as well.

We are a Sales organization for the websites, for every $100 in revenue we generate, we pay back a royalty to the website. On our P/L 50% goes to our Gross Margin and 50% goes to Cost of Goods Sold.

There will always be more space for advertising; it is a boundless amount of inventory, which has been our problem in the past. How do we cope with that, and sell it properly? The inherent challenge is in selling the right inventory, to the right person, at the right time. That is why we have such smart people working for us, and have created the best technology. By controlling that inventory, by assigning the inventory to the right places we hope to maximize revenues, results for our customers, and royalties back to the websites.

That is the driving force behind sales and network development. The challenge with that segment is that we are always looking to upgrade our inventory, and use it in a wise way. Right now our impression levels are pretty good compared to the industry standards, in terms of paid versus defaults.