Can you give us an overview on how sociomantic has built and grown its business to this point in the real-time ad market?
Like our customers, we’re a performance-driven company – ROI is the final word. In the last year and a half especially we’ve been pretty quiet when it comes to things like marketing. As a 100% self-financed company, it’s has been imperative for us to keep our focus where it matters most: on the product and services we are offering our clients. When you get those things right, the ‘marketing’, as it were, takes care of itself a bit as word starts to get around.
Since our founding in Berlin in 2009, we’ve scaled from our first RTB campaigns in our home market to running campaigns in more than 45 markets across six continents. We had twenty employees at the end of the last business year and will be approaching 100 by the end of this one. So far, we’ve been fortunate enough to achieve this scale based purely on organic growth. Every cent we earn is reinvested into building the most advanced RTB tech on the market and hiring the best team to build and deliver that solution to our customers. Simply put, our goal is to build the most outstanding team that has ever worked together in online marketing. This passion and focus has resulted in customer retention rates running at 95+% and the trust of many ‘open budget’ accounts on behalf of our partners, all managed in a profitable fashion for the past three years.
A lot of industry observers would see you as a retargeter (one of the best) focused on transactional e-commerce clients. Where do you sit in the ecosystem and how do you define the sociomantic solution?
In some markets we’ve been misperceived as just a trading desk, so let us be clear. In terms of our customers, we’ve focused intently on fine-tuning every part of our proprietary technology stack to accommodate the display advertising needs of e-commerce marketers: the type of users they want to reach, the type of data they want to use, the type of ads they want to show, the type of metrics they want to see. Sure, we help them with both prospecting campaigns and retargeting campaigns, but in either case, our approach keeps the KPIs and business goals of our e-commerce customers at the center of the bidding, optimisation and ad-creation logic.
Dynamically customised ads play a big role in both reach and retargeting campaigns for our clients because our creative-personalisation engine allows us to use many different kinds of data to customise ads in real-time. When it comes to bidding, we optimise and target based on the metrics that e-commerce advertisers have to answer for: effective cost-per-action in the short-term and customer lifetime value in the long-term. All of our customers get real-time reporting (updated milliseconds after an action takes place) via our user interface, where they can see transactional data earlier than it’s available from their own website analytics platform.
Basically, it’s all about providing the most scalable, and best-performing, demand-side platform in the market in a way that is simple for e-commerce marketers to adopt.
Do you have any plans to work with agencies in the markets you operate in?
Our most successful and principal model is based on client-direct relationships, so that our clients have the opportunity to take full advantage of the breadth of our solution. These advertisers have sophisticated needs in terms of data integration scenarios, and both sides benefit from a direct and transparent pricing model. Overall, our goal is remain fluid and open regarding this approach given the nuances of each global region, and we will follow the marketers’ lead in terms of preferred level of agency engagement.
Would you describe sociomantic as a DSP? If so, will be rolling it as a platform or continuing as a managed service?
Many of the advertisers we’re working with, especially in markets like Asia and Latin America, are generating first-time experiences with ad trading, and learning curves can prove fairly steep. For these types of clients we will always offer the option of managed service as a chance to experience the benefits of RTB e-commerce without the task of learning a new platform and optimisation logic. On the other hand, we are working with many advanced online marketers who are ready to take the reins on their RTB campaigns, and for these types of customers we’ll be rolling out self-service features based on demand. Nevertheless, if we feel the time is right, we might open up to third-parties once we feel our platform has the disruptive character we had in mind when first creating it.
Let’s talk about the sociomantic tech stack. What are the constituent parts, and how does it give sociomantic a competitive advantage?
I guess you could say we’re real-time purists. When talking about our DSP, we’re talking about pretty much everything that happens above the operating system stack. From tracking to data storage, from bidding to dynamic ad creation, we’ve chosen to engineer our system on all levels from the ground up because it gives us the maximum amount of control and allows for the highest level of integration with our customers.
Two of our founders developed parts of the original technology stack as part of their PhD theses before RTB had even been developed. Having this core infrastructure already built-out gave us a huge advantage in terms of speed to market, combined with our backgrounds in and deep understanding of the performance marketing business. In less than 24 months, we’ve managed to operate multiple data centers holding hundreds of servers around the world – all working with a giant stream of information to bring our advertisers the best performance in every market where they want to run display ads. Every moment data is not traveling represents lost revenues that our customers could be capturing, so it’s imperative to keep the information flowing if we want to keep finding that perfect combination of person, place, time and message on a continuous basis.
Most of our inspiration comes from finance: we’re simply amazed by the speeds and efficiency of High Frequency Trading and its ‘super low latency’ tech. When you’re talking about performance marketing on the scale that real-time bidding can provide, every millisecond (or in the case of HFT, microsecond) of efficiency you can squeeze out of your system gives your customers a competitive advantage – in pricing, in buying, in optimisation, in building the best ads.
Does the fact you have built your own bidder differentiate you from other independent traders? Does the advent of bid logic customisation (where an agency/ad trader can develop different bid logic) negate this competitive advantage?
Bid logic customisation is a great innovation, and one that is really necessary for this ecosystem to evolve. The challenge for agencies and trading desks will be developing competitively intelligent algorithms without having the full understanding of, or control over, the software for which they are building them. If the same company makes both your computer hardware and software, there’s a certain level of stability and synchronicity that you can expect from that system – especially if you’re the computer engineer to begin with, and know how to fine-tune it to work just the way you want.
In our case in particular, the fact that our user-tracking, our real-time bidder, our dynamic creative engine and our ad server are all part of the same tech ‘organism’ means that we can offer seamless end-to-end optimisation that isn’t possible when you string together different vendors. Obviously ‘owning the system’ also gives us a big advantage in terms of deep-data integration scenarios with our clients, which allow for longer-term optimisation logics, like customer lifetime-value, instead of focusing on singular transactions. Let’s not forget, that while building a bidder and an algorithm is one challenge in this industry, building a platform that can handle hundreds of billions of bidding requests per day is something you can’t really do without years of development. Ability to scale can’t be easily dismissed.
Let’s talk about the expansion plans. You are looking at Russia and Brazil as key markets into which Sociomantic could expand. What trends are you seeing there that would make them suitable for your solution? Are you drawn by the growth potential, or lack of scaled, global competition?
It has been our goal from the very beginning to build a truly global company, both in terms of our technology and our people, and since the early days you could hear the accents of so many different languages inside our Berlin office. Our first expansion included opening up offices in Warsaw, Paris and Amsterdam, where we have been operational since 2011. We also recently launched operations in São Paulo and Moscow as part of our most recent global push, and expect to be fully operational in all remaining major markets by the end of the year, with a number of key announcements in the coming weeks and months.
Our decision and timing for entry into these markets is based on existing customer demand in addition to the inherent growth potential of each region. One critical success factor for every market has been our people. We do not enter a market unless we find the absolutely right Managing Director and team to provide the best solution for our clients with the combination of local expertise and experience, deep relationships, and global infrastructure.Global Desk Editor