Arjun Arora is a third generation entrepreneur and always knew he would start his own business. After taking classes in entrepreneurism at UC Berkeley, Arora tried several jobs before he took the leap. Russ visits with the founder of Retargeter, an Internet advertising company that works by “tagging” visitors to a Web site, then following them around on the Internet and presenting ads after they leave the site. This makes for a very focused effort, giving customers a chance to see ads for the sites they just visited. Arora launched his company in April and, one month later, has advertisers and is cash-flow positive.
Russ: This is The BusinessMakers Show, heard here and online at thebusinessmakers.com. And now its time for the Aflac BusinessMakers Flashbck, brought to you by Aflac, ask about it at work. And earlier this week I had Arjun Aurora here in the studio. He is the Founder and CEO of Retargeter. It's a real cool web based advertising technology, check this out.
Arjun: Thanks Russ. It's a pleasure to be here.
Russ: Let's start by you telling us about Retargeter.
Arjun: So Retargeter is a internet advertising company based out of the Silicon Valley. And what we do is well all for users to your website to see ads for your website immediately after they leave your website. So the way this works is that a user comes to your site-they surf around-they're tagged-and then as they leave your site and continue to surf the web, they'll start to see ads for your site that you provide us everywhere across the web.
Russ: Wow. So if I'm a Retargeter customer and I hire Retargeter to come in and do this magic-it sounds like magic to me-that means that a visitor that would come to my sight-if I connected them to me through Retargeter-as they went out on the web, they would see more of my ads.
Arjun: Exactly. Yep.
Russ: You have got to tell us-how do you do this?
Arjun: So, the way that it works is that when a visitor comes to your site, we ask that you put a couple of lines of code on your page and that allows us to tag that user-effectively cookying them. Then as they go everywhere across the web, our ad-network partners will recognize that cookie and will display ads to them. Our partners include everyone from CNN, New York Times, The Huffington Post, Tech Crunch, Facebook and even YouTube.
Russ: Okay. So you mentioned your ad network-so that's the way this works.
Russ: Retargeter has this ad network but you reserve it solely for your customers that sign up for this cool, magic retargeter service.
Russ: Cool. Well, where in the world did this idea come from?
Arjun: Back in late 2008, actually things were a little shaky with my previous employer, so I started reaching out to some friends in and around the Silicone Valley. One group of investors-who are currently investors and advisors-had actually been using the service. However, it was limited to people who were spending approximately a hundred thousand dollars a month. Now what we really wanted to do was bring this technology to small to medium-sized businesses because we really understood the power of it.
Russ: So your target customers-small and medium-sized businesses.
Russ: Okay. Now are you in business today?
Arjun: We are. We've got a handful of clients and we're cash-flow positive. So things are going well.
Russ: When did you actually launch?
Arjun: We launched just early last month, so pretty recent.
Russ: Okay. And I want to make sure that I understand this. Let's say that I have a retail outlet. In the traditional world, a person comes into my store and shops and looks around. And once they leave and they're driving down the street, they suddenly see outdoor advertising for my store once again.
Arjun: Exactly. Not only do they see outdoor advertising, they'll see it in a magazine and on TV-basically everywhere they go. That's the real-world correlation to how we do things online.
Russ: So it seems like to me, Arjun you might actually be changing the ads that they see along the way.
Arjun: Yeah. We show a set of ads in different ad sizes across hundreds of different websites. So whether that's sitting next to a YouTube video or next to an article on The New York Times, we make it fit.
Russ: But I may even-if it were my store and they were going and seeing the next ad-it wouldn't always be the same ad-it could be a completely different message.
Arjun: Correct. Yeah. Uh-hunh.
Russ: You can't actually count as they're going along and knowing, "wow, this is the third ad they've seen today?"
Arjun: We are working on that technology actually. So that sequential technology is on its way as a matter of fact.
Russ: Wow. That is really cool. So we're talking about internet advertising in a very creative, different way. It almost seems like the timing might be pretty cool because I think that advertising in general is down so your ad network might be even be able to buy it at a pretty good rate these days.
Arjun: Yeah-actually, we are able to secure some pretty top-notch inventory for relatively cheap prices.
Russ: This is not just a regular banner. It's sort of following around and getting in front of the customer on the way." Would they actually have to pay a little bit more-it seems like-for your service than they would for just a regular banner ad if they were buying it themselves.
Arjun: That's true. Yes. There is a premium there-definitely. And I think that premium is very well justified for the increase in branding, the ability to wow your customers and also, the increase in conversions.
Russ: Okay. Have you done tests that confirm that?
Arjun: Yeah. Absolutely. We see anywhere from two to five times increase in conversion rates with the use of this product.
Russ: But are you able to optimize depending upon where they are and the purchase decision?
Arjun: Absolutely. What we can do is we can pixel each section of the process separately. So what that allows us to do is-let's say someone is coming in at the top of the funnel-they're showing a little bit of interest-we can pixel them at that point in time and show them a specific marketing message and also, when they're just about to purchase but for some reason leave, we can tag them with a different pixel and then that allows us to show them a different marketing message.
Russ: Okay. That's cool. You know we talked a little bit about pricing and functionality. Does it-generally is it a CPC deal-a CPM deal-or will you do almost anything with a customer?
Arjun: No sir. We actually structure this on a flat-fee basis. There is a lot of nuance to the process on the back end so we want to keep it as simple as possible. Rates fluctuate-it depends a lot on users and other factors. That way, we can continue to optimize the spend here. And I've got a couple of monitors up on my desk-you know, we're constantly monitoring all of our campaigns.
Russ: Okay. What are you expecting from these small and medium-sized businesses where it makes sense for them to be a customer of yours?
Arjun: So we've seen everything from a rock band to a B2B technology company. We've even had inbound interest from politicians. A great story from one of our rock band customers was they signed up for the service-say on a Wednesday. They sent an e-mail blast to 20,000 of their fans on Friday. On Saturday, they had a host of people come in-you know, looking to download a new MP3 that was coming out for their yet to be released album. We switched the program on on Saturday morning-so we started to collect user information. On Tuesday, the album launched and simultaneously, we launched those ads. Now what that did, is for all those people that went to the site-downloaded that MP3-looked around-they now started to see ads for that rock band the day the album launched. And this was tremendously successful. All those people started to see the ads everywhere. The band was called "Chester French" and they reached number 11 on the iTunes Top 20 list. So it was really, really powerful stuff and we were definitely excited about that.
Russ: So it sounds to me like it's maybe a neat company that doesn't require an army of developers. Am I right?
Arjun: No, actually we've got the product built out already and it's myself and a handful of employees and we've got a couple of people on part time as well. So, we're making money and we've got a pretty small team.
Russ: And you said you're positive cash flow and had an original investor, you're not doing what many entrepreneurs are doing at this stage-and that's out fundraising. Right?
Arjun: Yeah. We're set for quite a while here and it's great that we're actually cash flow positive so that helps with that situation.
Russ: Okay. Cool. We want to know a little bit more about you and yourself. Tell us about your background Arjun.
Arjun: I grew up in southern California in a typical, suburban, southern California housing tract and went to school at U. C. Berkley-studied electrical engineering and computer science-but also had a strong passion for entrepreneurship so I took some courses in entrepreneurship and technology as well. Then took a totally different route and actually went to investment banking-still in Silicon Valley-doing investment banking, IPO's and mergers and acquisitions for technology companies in and around the valley. Then actually went over to Yahoo Real Estate where I was the Head of Business Development there for a couple of years and eventually sitting here at Retargeter.
Russ: All right. Did this stint with the investment banker and the stint at Yahoo were those steps along the way to launching your own deal or were you really serious about maybe giving big companies a try?
Arjun: No-I think I've always had the entrepreneurial gene-a third-generation entrepreneur. My uncle is an entrepreneur. My brother, as a matter of fact, has also just started a company-so we're an entrepreneurial family.
Russ: Wow. So if you're third generation, what kind of business was it that your grandfather started?
Arjun: My grandfather started a foresting company actually in Northern India-many, many years ago. And then what did your dad do?
Arjun: My dad has a software consultancy.
Russ: So it definitely does run through the family.
Arjun: Yeah. Absolutely.
Russ: All right-well it's real cool. Share with us more-the long-term outlook for Retargeter. Do you already have one of these "exit strategies" targeted?
Arjun: No. I think one thing that's important to me-and I think to the company-is that we want to stay absolutely heads down for the next two years, focused on building out a quality business with a loyal customer base and real happy employees. And then-you know I'm sure the exit opportunities will come when the time is right-but right now, we're here to build a good business.
Russ: That's cool. That's cool. If somebody wanted to learn more about it, I assume it's at www.retargeter.com.
Russ: And that wraps up this discussion with Arjun Aurora, the Founder and CEO of Retargeter. And that wraps up this mornings Aflac BusinessMakers Flashback, brought to you by Aflac, ask about it at work. And now its time for Tech Talk from The Planet, so lets welcome Kevin Hazzard.
[Tech Talk with The Planet]
Russ: You're listening to The BusinessMakers Show, heard here and online at thebusinessmakers.com. Stay tuned for Esther Steinfeld's discussion with Brett Hurt, founder and CEO of Bazaarvoice.