Advidi. Leading the affiliate marketing world by example. Part II

What are you seeing on the screen behind us. This is one of the first logos in the worldcreated by an algorithm. How do you create something so unique thata selected group of people would like to have it but something that you cannot afford itno matter how much money you have. Are you trying to create some kind of Advidicommunity in there with all your affiliates? Absolutely, absolutely. This is Mark. Yeah, I wanted to introduce you to Mark. Hi, Mark! Nice to meet you. Im Roman. Mark is our VP of Global Strategic Partnersand he will also have a quick chat with you about Business side of things. Oh yeah, very much. I only ask this question because it’s publicinformation. Your annual revenue is estimated to be 350million dollar. Is it a correct assessment? 350 million dollars. Really? It’s. Yeah. I actually went to my old university a fewmonths ago and I told my professors, I said, like, I don’t know why you guys don’t havea course in affiliate marketing? We usually provide prizes from our guestsand heroes.So, what do you guys then give us as a prize? Okay, Mark, can you, first of all, tell mewhat you are responsible for here in Advidi? Sure, sure. So, I’m the VP of Global Strategic Partnerships,which basically means that my responsibility is to go out, represent Advidi and look forthe next big partnership for the company in order to grow. That can be with advertisers that we currentlywork with and just, like, take the relationship to the next level, have maybe discussionsabout where we can intensify the relationship in terms of maybe exclusivity or differentbilling model, maybe go on RevShare with them or I’ve even spoken to some of our partnersand see whether we can maybe take equity in their company, to really say, like, Okay,we are committing to you as a partner and vice versa, so So, you sometimes invest? Yeah, yeah, yeah. Well, you’re kind of… It can be, it can be with… It doesn’t always have to be with people,it can be with…Or it doesn’t always have to be with money,it can be with people, it can be with time, it can be with intent but it in any way I take a wave, I focus on my piece of theindustry that you can’t really expect from a normal account manager that is dealing withthe day-to-day operations. I try to have a bit of a higher overview onit, and the advertisers are basically the first layer, but there are many other companiesin our industry that help advertisers, that help affiliates, that make the whole ecosystemwork and we can have beneficial relationships whether it is referrals, whether it is partnerships,whether it is even joint ventures, it can be.How many advertisers do you work with directly? Uhh, by my latest recollection, I think thatin Advidi we have somewhere around 1600, maybe 1700 advertisers, yeah. But, of course, that’s not all active and,like, and also, yeah, your 80/20 rule, of course, your 20% delivers 80 percent of yourtraffic. So, yeah, there’s definitely a core groupthat is going to give us the bulk of our revenues, yeah. And in terms of affiliates, how many? A way more. I think we have over 3,000 now. So, yeah, yeah. 3,000? 3,000, yeah, yeah, but these are, you know,these come and go. It’s You kind of have to, I mean, there are veryspecific specialists that can click on to, like, very specific campaigns. So, yeah, you kind of have to have that spreadin order to make the most out of it, yeah. Here is why Binom Tracker is good for runningpopunder campaigns. Its unlimited. Reliability. Binom processes huge volumes of traffic easilyand fast. Even 10 million clicks a day on a single servermakes no troubles.Smart filters. Sophisticated smart filters enable you tocreate black and white lists in no time. Marks. To get a brief overview of all relevant data,mark any element in your campaign such as publishers or other token values with specialicons. Try it out for free. Find details in the description. As far as I know, it’s not your only office. You have recently opened a new office in theStates if Im not mistaken. Can you tell me how many offices do you havein total? So, we… both of them very recently. So, we have the majority of our people herein Amsterdam in the building were sitting in now. We have about 70 people I think here and weopened up two new offices. So, one of them is in Puerto Rico, which isa territory of the United States and another one is in Bangkok in Thailand.All right. And the office in Puerto Rico has a few pros. Basically, it’s time wise. It’s in between West Coast US which is alwaysnine hours behind us, which is a hassle to deal with. So, thats nice. And theyre halfway so they can also talkto us and them in a day’s work. Puerto Rico has been a very good place forfinding advertisers. They have a very favorable tax environment. Therefore, guys that have the money and thewill, they move their business and sometimes even their family over to Puerto Rico in orderto get that favorable tax benefits.Its only, I think it’s only, like, 4% they’repaying, so… Its good. Yeah, and therefore it kind of creates thisisland full of, like, really you know, big hitters. And I think that we as a network have foundour place there. And I think that our representatives thatare living there are not too angry about paying 4%. I think, yeah, in Amsterdam we pay a littlemore, yeah. And the Bangkok side, that’s our daughtercompany called Bidmath. It’s fully focused on programmatic media buyingand That is also a new project that you have recentlylaunched, right? Yes, yeah. Can you tell me a little bit more about that? Sure. So, I think it was, like, year and a halfago we started conversations with KK who is now our CEO of Bidmath in Asia. And he was supposed to come on board herein Amsterdam and help us with programmatic media buying. And it took off in such a way, and we sawsuch good results that we saw, like, Okay, listen, we really need to give this a lotmore attention and time and maybe even a dedicated office. And his speciality coming from TradeDoublerin Asia was always there, and he said, like, Let me go there, let me do my thing.I know the people there, I know the culture,I know… I have a lot of clients there. And then, yeah, we just went for it. It’s also for us… We have a whole bunch of clients that areof course there, the show, a big show every year in December that is in Bangkok. So, we’re like, okay, then it would be niceto have Amsterdam and then, you know, before us in time we have Puerto Rico and after uswe have Bangkok. I think it’s a great spread to be a globalcompany with, like, three offices in different time zones. So, yeah, very happy with it. And what does a programmatic media buyingcompany do? Sure, yeah. So, programmatic media buying is just an engineto drive traffic and it’s a way to get traffic, it’s a way of bidding on per impression.And I think that What the strategy is to really go for thatis to not only have the current verticals that we are very familiar with, dating, nutra,sweepstakes, casino, but those guys actually are focusing on stuff like banks, on travel,on fashion, on telecom companies, on e-commerce. So, these are real brands that want to knowexactly, you know, where their brand is going to be, how its represented, and the bestway to do that is to have control over where you’re going to put that ad. So, it’s not really suited to put in the affiliatenetwork where we have to give it again to affiliates. Thats more for brands? Yeah, it’s much more for brands. And I think it’s, for us its also a greatway to further our company, to really see if we can… what we’ve done in our currentverticals to also do it in like these big branded campaigns.Is it a part of your diversification strategy? Oh, for sure, for sure. I think that our dream is to, you know, toreally be in that landscape of, to compete with media agencies, to out-compete mediaagencies. I think that they… the media agencies ofthe past are just stuck in their ways of you pay for They are in the past, as far as I can see. Oh, the thing is, like, you pay for a reallygood name, you know, you pay for a high-profile agency to take your campaign and do somethingcreative with it.But really it’s not performance-based, it’s,yeah, you know, you’re gonna be in a billboard. Its blowing money away. Yeah. The billboard on the side of Times Square,okay, it’s amazing, great brand exposure, but how much really does it give you in termsof sales? And I think that that’s where we’re comingfrom. So, we’re all about performance-based, we’reall about measuring exactly. If you put a dollar in us, you get a dollarten back, you get a dollar fifty back, what is, you know, what is measurable and that’sI think How does it work for brands like banks, forexample? What is in action? Well, it can be, for instance, somebody whoapplies for a new credit card.Mm-hmm. So, a bank knows very well that somebody whoapplies for a new credit card, well, doesn’t make anything now, but on average, a new creditcard subscriber will eventually spend X on us and maybe even can be upsold to a mortgageor a different kind of loan. So, yeah, they’re very keen on getting theright kind of traffic in. And for us it’s also about, like, monitoringwhat the value is of what we bring. I wanted to ask you that. Is that hard to build a sustainable companyin a very unpredictable industry such as ours? What are the major things to consider? I think that…It’s a good question. One of the things we felt is very much tofocus on your own path because around you everything is changing superfast. It’s very easy to get distracted and think,like, hey, this is a new thing and I got to jump on that, but more focus on the engineof the car, that you’re saying is that, okay, what is really going to drive us forward,what is really efficient. And let’s say that tomorrow we do see a goodopportunity this machine can be applied to that. If tomorrow it would be, I don’t know, like,gummy bears online, then we can promote gummy bears online. It doesn’t matter really what the productis, it’s about that the engine can really deliver quality traffic and can measure thesuccess. What are the major risks do you see for Advidias for a business? I would say its that… It would always be…First, looking inwards, maybe growing toofast and, you know, being very ambitious in where I want to go and forgetting to sometimeslook at the engine and, you know, put a little WD-40 here and a little tweak there to makesure that everything is still running smoothly. I think that running a company is hard atany level whether you have now, like, if you have seven people, 70 people or 7,000 people,but you have to keep looking at the engine critically. Is this the best we can do? And that is often in the rat race of thingsforgotten to really look critically at what you’re doing is the right thing.Because then you can, it can create maybepeople that are not happy or not in the right place and it takes a long time for you topick up on that, and maybe business relationships can be hurt by that, you know, somebody’snot motivated or somebody’s not really putting the extra effort into it, and you’re not pickingup on the new market development. So, I think you should always look at, like,okay, is the engine still running at the best that we can do? And if you’re doing that and I think you cando great things. Yeah, you’re growing rapidly, just as youmentioned. Yeah. And was what was the growth for 2018 in percentagecomparing to 2017 if you have in mind those numbers? Off the top of my mind, I think that…Yeah, Jan Willem, our CFO, might have to correctme but I think we’re at 40% or something, yeah, yeah. I think I’ve started in 2013 and basicallyevery year we’ve, weve fit around the 40-50% mark to grow. And this year, I think that last year wasmaybe almost 40%, it was a little bit slower because we were really, we had a year of reorganizingthe company, restructuring it, the branding was all new, we really focused on, like, hey,let’s polish it all up. And now we’re using the engine to… This year I think were, we have the ambitionto double instead of just growing 50%. So, this year you have intentions to double? Yeah, 100% of growth. Thats what we want to do. That’s a goal. It is a goal, it is a goal. And the thing is that it’s an obtainable goalas long as, you know, if you keep focused on the things that really matter.Alright. I only ask this question because it’s publicinformation. I found that on that your annualrevenue is estimated to be 350 million dollars. Is it a correct assessment? 350 million dollars? Yeah, its up here. I was surprised, I mean… Really? It’s… yeah. Well, I mean, I don’t know if Is it for last year? Yeah, I guess so. Yeah, no. I think they’re, I think they’re Its a credible resource, but the numberis too incredible to me. Yeah, they’re off by a bit, yeah, yeah. If I, if I I think I would buy a different car if wedid 350 million in revenue. So, it’s not close to that? No, no. All right. Let’s talk a little bit about your verticalsand offers? Sure.What are your biggest verticals? Is it still dating or something else is takingover? No, dating is still our bread and butter,and I think it’s basically also our test case of why we want to… why my role that I havenow exists. So, dating was always part of Advidi becausethe two founders were media buyers in dating, and they just saw, like, hey, this is somethingthat we can also pass on to our friends and take margin and with HasOffers that they foundsuddenly a mini network was born. And I think that throughout the years we’vecultivated these relationships with dating advertisers that are really strong and we’veeven started working on RevShare with some of them.And I think that that really showed us, like,wait a second, when two companies, when one is focusing on product, the other one is focusingon traffic and they’re both doing revenue share, they’re both looking at the metric,user value, you can do really powerful things. And I think that that’s why we are so dominantin dating. I think we’re, safe to say, the biggest networkin dating at the moment. Yeah, thats what I was going to ask youabout. Yeah, we, we… For a while there was a, there’s a few thatare still doing it, but I think that definitely in Europe you can say that we’re the biggest. And what is your second biggest vertical? Second biggest is… Depends on the day, but it’s usually, it’s So, nutra or health and beauty, how you wantto describe it, is battling with sweepstakes, mobile content. So, those two verticals. Sometimes one is higher, than the other, butI would say that probably nutra is our second vertical. Nutra? The last year was not the greatest for nutrabecause all those regulations that came to power in the US.Is it now getting to normal? Correct, and there’s more regulations coming. Yeah, you know, the thing is that… And again, coming back to what I said earlierabout, like, having the machine work properly, is that you just have to, you have to adaptto the new situation. It’s not like people don’t want to buy thenext diet pill or have the next skin cream promoted to them, it’s just about, like, workingwith the regulations are. And I think that last year really showed thatwe can also push, like, hey, why don’t we try straight sales. And that’s what we did, and that’s what wehad success with and I think that Straight sales, it’s when the product is purchasedon the webpage, am I correct? Yeah, so, basically, a trial is where youpay $4.99 and you subscribe for a free trial, $4.99 for the shipping and then you get thebottle and then you’re in a subscription model where every month you get a new bottle fora full fee.And a straight sale is basically a one-timebottle that you get, that you pay the full fare for. And the advertiser will, of course, try tocontact you and say, like, I want to upsell you to another bottle, but there’s no continuitybehind it in terms of, like, that the next bottle is coming the next month. So, of course, you get a higher price forthat, but it’s harder to promote, of course, for somebody to fork over 70, 80, 100 bucksfor a bottle. Do you think that nutra is still, you know,a good thing to try for affiliates? Of course, it is, yeah, yeah.I think that the regulations last year andthe regulations coming the 14th of April from MasterCard are not unlike we’ve seen in otherverticals, they clean up the industry, they set a new standard of, hey, guys, we’re goingto work in this way, the consumer is going to be protected a little more, and in termsof, like, hey, they need to be aware of what they’re buying and they need to be informedand… But I think it’s, it only makes room for thegood guys who know what they’re doing to really expand their business and the bad apples whichyou don’t want to work with anyway to drop out. So, that new regulation by MasterCard, theydo not allow you to charge people for trial physical products anymore or..? Theres, yeah, yeah, they said there’s,they’ve been semi-vague about it, but that is the gist of it that they do want to informpeople a lot more about, like, hey, this is going to be a subscription model, you aregoing to get billed again for a new bottle.And we’ve been talking for the past two-threemonths with a lot of advertisers that we know very well on what the strategies are to workwith this at the moment, everybody’s now testing what would work better than the rest, butwere confident that we have a good group around us. So, you are not concerned? No, no, no. You launched in May of 2018 gaming vertical. How has it been doing so far? I think that gaming was always a passion projectof mine coming from gaming before Advidi. I think that it has been a big challenge forus just in terms of seeing where that vertical was growing and the other ones were growing. We made a conscious decision to stop withgaming, weve just seen that the focus was much more going to be on the, on our currentfour verticals and nurturing another new one… So, yeah, with this we decided that this isgoing to be, that’s going to be on the back burner.We still have a few advertisers that we’regoing to be running with, we’re not going to actively go to conferences and hook upa lot of new advertisers for us. What is the process of screening new advertisers? Is there any due diligence process in place? For sure, for sure. I think that Tell us a bit more about that.Yeah. We learned the hard way that not all advertisershave the best intentions with you. I think that especially in 2015-2016 we gothit hard with some advertisers that didn’t pay especially in credit card submits andin nutra. And you lost a lot of money? Yeah, yeah, yeah, yeah. And that… You know, back then it was a lesson, but itreally prepared us for, like, for instance, when you said last year Were affiliates affected? No, no, never, no, no. I think that’s one of the things that we kindof always do very well, and you can look up online, like, we always pay our bills, we’renever mentioned as a network that doesn’t pay what is owed, so.But kind of those lessons from 2015-2016 reallymade us evaluate, ok, what is going to be our risk policy in terms of outstanding amountswith an advertiser and what kind of things do we want to know from the advertisers beforewe say, ok, we’re going to go from, I dont know, 25k outstanding to 250k outstanding,you know, what do we want to feel comfortable with.There’s many checks both in the pre-processin terms of questions that the AMs are asking from even verifying if the IP that they’retalking on Skype is really there where they’re at in the world to actually doing some checkswith other networks that are friends of ours, hey, have you had experience with workingwith them et cetera, et cetera. So, you have to be very careful with thatbecause, you know, we’re running on small margins and sometimes we do big volumes ina day and that can add up.What kind of offers or products you will neverhave in your network because of your philosophy? We made the active decision never to go forforex and binary options. Can you elaborate on that? Sure. I think that the We took a look at what the earning model isand how at the back end they target people and in terms of how much money you’re tryingto pull out of a customer and it just seems that it’s excessive and it doesn’t weigh againstwhat really is being delivered as a service. And I think that we’re all fine with, youknow, somebody having a subscription to a dating website with some girls that they mightnever meet but they feel like, hey, we’re having a, we’re having a great time and I’mflirting with them and I’m saying things to them that I might not say to my wife and Ihave to pay for it every month. That’s all fine, but it’s not like pulling,you know, going for hundreds or thousands or even tens of thousands of savings to getthem out of there to invest like The Wolf of Wall Street shit that I really dont So, binary options, Forex, what else? Back in the day, I think two years ago somepay per call was really booming and we just Some, sorry, what? Pay per call.Pay per call. Yeah, yeah, yeah. And there were, like, some really aggressivemodels behind that with tech support and really shutting your computer down, you have to call. That was a big issue, as far as I know. We never touched that and I’m happy that wenever did, so. Do you believe that the lack of educationin our industry may cause some kind of problems in the future? I don’t know. What do you mean by a lack of education? For affiliate managers. There are no, like, credible courses around. Oh yeah, yeah, yeah, for sure, yeah. I mean, I actually went to my old universitya few months ago and I told my professors, I said, like, I don’t know why you guys don’thave a course in affiliate marketing.I mean, it’s just, it should be taught alreadyright out of high school, you know, how do people make money online, yeah. And it’s not just affiliate marketing, itshould just give the whole spectrum because, you know, it is a major industry and itsbeing completely skipped at least in Holland, I dont know how its elsewhere. Do you believe that there is enough room inthe industry for everyone to make money? For sure, for sure. I think that it will only be growing. I mean, there’s, theres not I mean, you can throw a stone in our industryand you’ll hit somebody who’s successful. It’s ridiculous. Like, everybody is doing very well in ourindustry. It’s a super big growth market. I don’t see us, I don’t see other networksas real competitors. We’re all taking a big bite out of a big pie,so. And then how do you see affiliate marketingin ten years? How will that change? I think it will be, I mean, I think it willdefinitely…The, the… What I said before, the performance part willstart to seep into a lot of traditional markets that have been really relying on brandingand getting your name out there. And I think that it’s much more attractiveto see where your marketing dollars are going and to really get you customers that are payingrather than knowing of your brand. More money for the affiliates to be made. I think so. I mean the budgets that these… that, youknow, a Nike or BMW or Coca-Cola are working with are, you know, they laugh at our entireindustry. It’s a fraction of what, of course, they’respending on marketing. And if we can, you know, if we can get inthere and if we can prove that we know how to get quality traffic to the right place.You have a serious, serious shift in whatthe marketing landscape is going to look like. And lastly, what do you like the most aboutaffiliate marketing? Ooh yeah. I mean the thing was what I liked always themost is that it’s so quick. Like, I can… The instant gratification of meeting somebodyat a conference and say, like, hey, let’s try something together, having an interestingconversation and basically three days later you can see some numbers on the board that’sa lot of brick and mortar industries would be like, sorry, what is the revenue you’redoing with a new client? And that’s something that always excites me.I mean it can be daunting, like, so, how manychances did I lose rather than win? Because, you know, which guy did I talk toat that bar but not that guy at that bar. It can be so many opportunities everywherethat are in front of you. So, yeah, I really, I really like it, I reallylike that it can change and it can move any day. Thank you very much, Mark. I really enjoyed the conversation. Cheers, cheers, cheers. Thank you. Petar, Im back to you.You guys are still here? Yeah. You kind of like it, right? Oh yeah. I think you’re staying for Friday drinks. Yeah, after its all finished, only afterits all finished. There’s one thing that I have forgotten. I have told you about our tradition to havea competition in the end of every interview and we usually provide prizes from our guestsand heroes. So, what do you guys can give us as a prize? You asked me several times during the interviewabout how we actually put the community together, how we create this interaction in, you mustadmit, very lonely industry, especially if you’re, like, affiliate individual. We are quite famous for putting together andthrowing these receptions, networking events where we bring the industry together. And sometimes those meetups are more valuablethan a conference itself because it’s already pre-filtered, pre-selected, quality audience. So, on the 7th of July, a day before the startof Affiliate World Europe, well also have one of those events. It’s happening on Plaza Espana in Barcelonain hotel Catalunya. They have a beautiful rooftop terrace wherewe’re going to bring the industry together, mostly affiliates and some of the industry’swell-known names.So, I just wanted to give your audience anadvantage in this, and we’re going to give five entrance tickets for this party for affiliates. Thats cool. It’s not only a networking event but it’sa walking dinner, like a walking dinner. We’re gonna have some other surprises. It’s like a full night event and if they Is that a private event? Yes, it’s Advidi private event. It’s invitation only. So, in this case, your affiliates will havean advantage, your audience will have an advantage in the guest list.Cool. And I will put the conditions in place. They are very simple. Just simply tell us what do you like aboutaffiliate marketing the most, the same question I have just asked Mark. Be specific and detailed. The best five comments will be chosen by uswith Petar. And the winners will get those private invitationsto Advidi party in Barcelona, 7th of July. That’s correct. And before you end the interview, we alsohave some presents for you, guys, because you were amazing. Us? Yes. All right. Because you like our merch. All right. My colleague Tanya has something for you. Thank you, Tanya. Thank you very much. Enjoy the presents. We will expect those comments for the partyon the 7th of July, and it was quite a pleasure to have you today at the office. Likewise. It was a pleasure.Come again. And also an invitation for the affiliateswho are visiting Amsterdam. Our office is always open. If they want to use a pop-up desk, if theyneed a space for work or meetings, we have that option too. They just have to let us know and we’re goingto welcome them. Cool. Don’t forget to subscribe to this channel. That is kind of things we have and discusshere. Bye now. See you next time. Bye-bye..


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