August 16, 2011 – 12:03 am
Tyson Roberts is CEO of Lucid Commerce, a direct marketing agency and platform company. The company recently announced it has raised $8 million in Series C financing led by Rho Ventures.
AdExchanger.com: Since starting in 2005, how has the company changed to become what it is today? Any pivots?
TR: We pivot. The only thing that hasn't changed is the BHAG. To bring performance to TV advertisers through the application of precision targeting and measurement. Quite simply, our goal has always been to replicate the value that Avenue A produced for online advertisers and apply it to the much larger TV space. The organizational change we've seen is a byproduct of trying to figure out the best way to produce that value in a totally different environment and culture. It would have been easy if the answer was an ad-server.
What problem is Lucid Commerce solving?
Television moves consumers like no other advertising medium I've seen. It is no mystery why $65B goes there year after year. That said, how the media is targeted and measured is bordering on senseless.
Targeting: Most of television advertising today is still targeted on age and gender. This is deeply deficient.
Measurement: The television has defied real measurement for a long time. Impressions, rating points, awareness and perception as measured by survey, are all most marketers have upon which to value their campaigns. This has to end. In the age of advertising accountability marketers are demanding a way to measure the true and complete business impact of their TV investments. We have developed that method. Using our proprietary MarketScale platform we are able to produce very precise measurements of the value that TV media is producing.
Do you see yourselves as the agency of the future in some ways - integrated tech platform and agency services?
Absolutely. The agency of the future is not an agency at all. It's a DSP wrapped in experts. Our system evaluates millions of permutations to select media placements and to compute each client's optimal bid for each placement. This is not something that people can do well, let alone consistently. The people are needed to drive strategy, thrill clients, and to creatively apply such capabilities in new and innovative ways.
How do you define the competitive set for Lucid? And target market?
We compete primarily with agencies who buy television media. We believe that increasingly we'll compete on our ability to predict the performance our media will produce for the client and then achieve it. This will require wholesale shifts in the operation and culture of incumbent agencies.
Our sweet spot is marketers who rely heavily on television to drive sales through stores, websites, and call centers. We are targeting advertisers who are already on TV and who seek improved performance and accountability.
How does Lucid Commerce uniquely address (or plan on addressing) digital media channels?
While I expect we'll go back to our team's roots in digital media at some point, we currently have all the opportunity we can handle with TV. Our journey has definitely uncovered some shortcomings in how digital media is targeted and measured, some of which may present interesting opportunities for expansion.
When do you think digitally addressable TV will provide you the necessary scale for your business? Overall, what might be the drivers?
Great question. One of several tough design criteria we placed on ourselves was that our solution would not require addressability (or any change to the TV infrastructure for that matter) to work and produce material performance lift. I believe addressability will come and that it will take much longer than anticipated to reach critical mass. In the meantime, there is plenty of value to be created by improving the precision with which media placements are matched to advertisers. The perfection of this matching will only position us more powerfully for addressability. As the media becomes addressable we move from discounting impressions that don't match our advertisers target to suppressing them altogether.
Do you see direct response advertisers caring about the brand or brand metrics?
Only the successful ones. We've seen classic direct response advertisers be forced to evolve their thinking as their successful single product becomes a product line and their single distribution channel grows to include web and retail. This success demands that these marketers tackle many of the challenges that classic brands face.
What surprises you about TV advertising?
The magnitude of TV's impact was what most shocked me coming straight out of online. We would toil endlessly to produce a hundred orders for a client at Avenue A and in TV we produce thousands from a single airing. At first I chalked it up to television's reach, but even when comparing equivalent online and TV impression volumes the difference is stunning. The explanation has to be a combination of the creative palette (sight, sound, motion, size), the user modality (passive vs. active), and I suspect there's some residual perception that companies and products on TV are more real. It seems that the medium itself, being on TV, lends credibility to a brand in a way that being online does not.
A year from now, what milestones would you like the company to have accomplished?
- We should have placed $100MM in TV media.
- Our clients experience an average of 25% lift in performance.
- Our competition is saying they do what we do.
August 16, 2011 – 12:03 am