AdReady CEO and Former aQuantive Exec Karl Siebrecht on His Big New Opportunity
AdReady is one of those startups that everyone talks about but no one really understands. At least not most lay readers, whose eyes glaze over once they get past the words “online advertising.” I can’t really blame them. After all, can most people explain why Seattle online ad firm and local success story aQuantive was worth $6 billion to Microsoft in 2007?
Karl Siebrecht can. He spent eight years at aQuantive, including time as president of the Atlas technology division. He then spent two-plus years at Microsoft as a general manager in online services after the acquisition. After all that experience, he’s learned how to explain online advertising in plain English, and show why Seattle-based AdReady is a big deal. Siebrecht joined AdReady as president and chief operating officer three months ago, and was just named the startup’s new CEO this week. He succeeds co-founder Aaron Finn, who is staying on full-time as chairman of the board and chief strategy officer.
In a nutshell, AdReady has developed tools that make display ads (banner ads, as opposed to search-engine ads) faster, cheaper, and more efficient to produce and monitor for a broad class of online advertisers—especially small businesses. The company started in 2006 and raised a total of $12 million from investors including Madrona Venture Group, Bain Capital Ventures, and Khosla Ventures. Its customers and partners include advertisers, ad agencies, and publishers like the New York Times, ESPN, and Yahoo.
Siebrecht talked with me yesterday about AdReady’s broader strategy and his new role. He declined to comment on whether the privately held company is profitable yet—but media reports have said it’s doing more than $10 million in annual revenues. He did say the company is up to 50 employees, and is looking to “grow very aggressively” this coming year.
Here are just a few highlights from our conversation, edited for length and clarity:
—On AdReady’s big opportunity: “In the online ad category, I believe there’s significant untapped potential in display advertising,” Siebrecht says. “Search advertising is fantastic, it works well, it’s a very large business. But what we see in display is very, very limited in terms of the number of advertisers that can do it effectively. There are only a few thousand advertisers in the U.S. who do it, as compared to the 1.4 million search [ad] customers that Google says they have. Yet there is a tremendous amount of supply of display advertising inventory. The largest and most sophisticated advertisers actually have [display] budgets larger than search budgets. If you’re really big, you can get display to work quite well. If you’re small, you’re not even in the market.”
—On which lessons from aQuantive are applicable to AdReady: “When I joined aQuantive, there were less than 150 people,” he says. “We went through some real peaks and valleys there. The important things to stay focused on were creating value for customers, and building a great team. Brian McAndrews [former aQuantive CEO and now a managing director at Madrona] was a great leader in terms of keeping people grounded. He was able to lead the organization in that exuberant time [pre-bubble], and when things came crashing down.”
—On the key challenges facing the company: “Business has done very well, we’ve had a very good year in a tough economy,” Siebrecht says. “We’ve got a great foundation, we’ve got some real optimism heading into next year. We just have to be very thoughtful and focused in terms of how we want to grow. The overall market is poised for a much better next year. We need to grow very aggressively, but make sure we’re doing it in a managed way. So we’re not disappointing any customers along the way.”
—On the competition: “There are lots of companies in the general space,” he says. “Some companies have built versions of our creative tool but don’t have the media buying platform. Google bought Teracent [a display-ad company] to automate the building of banners. There are some companies that have a very basic version of our service, or are trying to sell to super-small advertisers out there.”
—On what we’ll see from AdReady in 2010 (mobile ads, for example?): “We’re considering that,” he says. “We’re taking a very customer-centric approach. It’s a relatively easy thing for us to do [mobile]. It’s on our consideration list. We take our cues from the customers. It’s not universally No. 1 across the board. There’s not tons of mass there yet.” In terms of the overall ad market, he says, “I think the worst is over. Will there be significant growth next year? I’m not betting on it. We’ve hit the bottom. 2010 will be better than 2009 in terms of the overall market.”
—On how the company plans to expand in a crowded field: “We’re looking to grow organically, doing more of the same,” he says. “We view the world across a few different customer segments: partners and indirect [like Yahoo]; direct advertisers [like Alaska Airlines]; and recently our fastest growing segment, [ad] agencies.” The bottom line: “We’re not trying to eke out market share. We’re going after a market that doesn’t have any alternatives.”