Despite fierce competition and a fast-paced industry, standout ad-tech startups find their footing and succeed. How do they do it? How do ad-tech startups grow from tiny teams working in closet offices to multi-million dollar companies with more than 100 employees?
Three CEOs of super successful ad-tech startups shared with me their stories and strategies for success. Here are their top pieces of advice for others looking to break into the space:
1. Fulfill unmet needs
A successful ad-tech startup begins with a good idea that hasn’t been capitalized on yet. Identifying opportunities in the industry stems from understanding the current trends and recognizing what customers want but don’t have.
“Too many companies jump into a market with services that are very similar to those that already exist,” says Eric Roza, CEO of Datalogix, a massively successful data company that enables brands to reach their customers online via ads and measure subsequent offline sales lifts. “Breakout companies look for the holes in the marketplace, and they work backwards from the needs of their customers to come up with something new and differentiated that addresses those needs.”
The strategy proved successful for the company, which powers campaigns for more than 75 percent of online media companies. The startup saw an unmet need for brand advertisers who sell most of their products offline to track whether their digital efforts were generating sales.
“Datalogix solved this [problem] by ... building a $2 trillion database of consumer spending and connecting it to top digital publishers and ad-tech companies,” Roza says.
The company now works collaboratively with other ad-tech companies and more than 80 of the top 100 brand advertisers.
2. Focus on the customer
After developing an idea to meet an unfilled need, ad-tech startups should continue to set themselves apart from their competition by focusing on what the customer wants.
“Successful companies focus on the customer, not the technology," Roza says. "If your customers' needs aren't being met, it doesn't matter how impressive your capabilities or services are.”
Dstillery CEO Tom Phillips shares similar advice. The company applies data science and enormous intersecting data sets to help brands build audiences and understand customer loyalty. When the startup was founded in 2008, marketers were investing in digital products, while social media was beginning to boom. The company developed a product connecting these trends that targeted consumers based on their web behavior taken from a social graph generated by social-media platforms.
“We realized that our algorithms had the power to produce results on a broader set of data than the social graph,” Phillips says. “The social graph was a nice hook, but web-wide data was more powerful.”
By harnessing the power of larger and more diverse sets of data in creative ways, Dstillery is able to provide more accurate conclusions that better serve the customer, and the brand.
3. Keep advancing
Technology and media are industries in flux. To stay alive, ad-tech startups have to keep abreast of the constant changes. While successful startups keep up with changes, the most successful are always two steps ahead.
"To survive in this environment, you must be nimble and innovative,” says Scott Knoll, CEO of Integral Ad Science, a leading ad-tech company that assesses and reports value of each ad opportunity to help media buyers and sellers maximize return on investment. “Our goal is to disrupt every solution we have in the market before anyone has the chance.”
To foster advancements, successful companies dream big and allow their employees to contribute to the creative process.
“Imagine it: Ad-tech is a world of endless opportunities, where you can experiment and measure and evolve,” Phillips says. “In this industry, imagination is just as important as knowledge.”
4. Challenge traditional ideas
Startups bring new, fresh ideas to the table. In the ever-evolving ad-tech industry, successful startups go against the grain, refusing to limit themselves based on what has been done in the past.
“We've found that continuously challenging preconceived notions of how to run a company has been the key to our success,” says Datalogix’s Roza. “In today's world, the market will increasingly reward companies that focus on what matters: attracting great people, focusing them on the right things, providing a lot of context and learning, engaging them in meaningful work with a high degree of autonomy, and holding them accountable.”
Related: The Ad-Tech Gold Rush Is On