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Interview with Roy de Souza, CEO of Zedo

Learn how Internet advertising changed over the past 5 years from Roy de Souza of Zedo and where will it go in the future.

Interview conducted by Nathan C. Kaiser on Wednesday, April 14, 2004 in San Francisco, CA.

Can you give us an introduction to Zedo?

Zedo provides the tools and services that enable people to make money out of Internet advertising. Founded in 1999, we are currently profitable and growing.

What is the origin of the company?
We came about with the development of our superior technology. That has a huge impact on the cost structure that we are able to offer customers. The real differentiator for us is that we offer a very high level of service. Since our costs are so low we are able to offer outstanding customer service at the same price as other providers.
What differentiates your technology?
It is much more scalable, much simpler architecture, high-speed delivery and a low cost. Our technology allows the browser to connect to a server to and get the ad back much faster. We don’t rely on hundreds of central servers instead we have a distributed architecture.
What is provided by your customer service?
We offer 24-hour support, product customization, service flexibility, etc. The Internet is a very flexible place and the more you can help your advertisers make money the more valuable your service becomes.

Has the market requested this higher level of support?

Both a high level of support as well as a high level of technology. If everyone buys exactly the same kind of ad at exactly the same price, then the market price for that advertising is high. If everyone does something slightly different then you can potentially buy good quality ad space at a lower price.
How has the market changed since Zedo was founded in 1999?

Primarily two things happened. One is that the ads became much bigger and more intrusive to the visitors on different sites. The other is that the advertising types fragmented. In 1999, sites only utilized one type of ad, a banner ad. Now they use larger and much more intrusive ads. They also use a much wider array of ads.
How has the change in the market place affected your business?
It means that every customer needs something slightly different. Every customer needs services and technologies that allow them to differentiate from their competitors. Their need for additional support and customization tools has forced our organization to provide new features and services to meet those growing needs.
How have you gone about offering that spectrum of services?

We have a great technology and a great team. Also, our low cost structure has allowed us to be flexible and to grow our services faster than other competitors.

What contributes to your low cost structure?
Our development center is in India, which allows us to keep our costs low. They are open 24 hours a day, and their expertise has been instrumental in our success.
What responses have you seen to pop-ups as well as pop-unders in the market place?
Pop-ups are not a very effective marketing tool, because they tend to small as you can’t block too much of the site, they also tend to be closed very quickly, and because of that they tend not to load at all. Pop-unders are only slightly less annoying. They are much more effective as a marketing tool, because they are very large, load fully by the time they are seen, and have much more interesting creative.
Will both ad types continue to be used?
While pop-unders tend to be effective, both advertising types will disappear. Publishers and advertisers will react to visitor?s feedback and discontinue these over time.

How has keyword advertising affected your business?

The explosion of paid search and inclusion show what an effective advertising medium the Internet truly is. There are a lot of different ways for advertisers to present their products to the public. Paid search is very effective because the user told you what they wanted to look for. It is a much easier way to target and provides an easy way to purchase direct advertising.
How has keyword advertising affected your business?

The explosion of paid search and inclusion show what an effective advertising medium the Internet truly is. There are a lot of different ways for advertisers to present their products to the public. Paid search is very effective because the user told you what they wanted to look for. It is a much easier way to target and provides an easy way to purchase direct advertising.
How has paid search and inclusion affected advertising?
It has revitalized the entire industry. It has shown everyone that Internet advertising really works. Even branding companies who don’t do keyword search have seen the success stories of paid search and inclusion.
Do you see companies spending a greater amount of their ad budget online?

Currently companies spend 5-8% of their ad budgets online and we see that proportion increasing. One recent trend is that publishers are looking to utilize more rich media than in the past. We are finding that a lot of our customers are looking to use rich media, which are very large ads that are within the content of the site.

How many of your advertisers and publishers are using rich media?
Well, there isn’t much of an impact when one advertiser uses rich media. It is when a publisher begins to use them, because then every visitor to the site sees that type of ad. That is one of the biggest trends we are seeing. Rich media is also very attractive to brand advertisers.
What to advertisers need to do to continue to differentiate their products and services?
With the rich media format, advertisers have been given a very large canvas on which to create. Also, consumers will see rich media ads as they are placed within the overall content of a site. When we get to the point where an ad is sure to be seen for 5 to 10 seconds, then a lot of creativity is handed back to the advertiser. Independent of ad type, advertisers have to ensure that their ads are creative and speak to their target market.
What are the keys to your success?
A dedicated focus on our customer’s needs and a very good team.

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