How AdGreetz Hit $10M Revenue with 20 Customers and 35 Employees (Interview with CEO Eric Frankel)

Introduction and AdGreetz Overview

Nathan Latka

00:00Hey, folks. My guest today is Eric Frankel, the former president of Warner Bros. TV distribution and the CEO today of adgreetz, the industry's leading video personalization and ad tech martech platform that is disrupting a 768,000,000,000 advertising marketplace. Eric, you ready to take us to the top?

Eric Frankel

00:14>> Ready to take it to the top with you, Nathan. Good to be back. I'm pumped. Thanks for the invite.

How Small Brands Can Use AdGreetz for TV Ads

Nathan Latka

00:18I'm pumped. So we were talking before the show. So let's say someone's listening right now with call between like 5,000,000 and 10,000,000 in revenue. They see these ads on TV. They go, that's that's for big companies. I can't afford that. And they're bad ads anyway. They're not even custom. How can someone with 5 to $10,000,000 in revenue use adgreetz to launch custom TV ads?

Eric Frankel

00:34>> Well, we deploy to 26 channels, which are Facebook and Google and email and app and everything that people have been doing for a while. But the latest twist is in The US, we're now doing this on 100 streaming channels. So, for not a great deal of money, you can test for 100,000 and rather than seeing that generic ad, we're now doing very specific ads. So, we can tell you where the local store is. We're calling out

01:02>> cities. We're telling you what movie theater can you see Elvis in and at what time and what's the address. And what's happening is we're doubling revenue for these brands just by ad.

Nathan Latka

01:15American software company, like let's say ClickUp wants to use you to do marketing, 100 ks tests across 22 streaming channels. What might their ad look like on these channels?

Eric Frankel

01:23>> Right. So ad can look like, believe it or not, just by calling out a city, town, or village at the beginning of the ad, people are so much more engaged. So for example, it would say Santa Monica, Austin, Philadelphia. Have you It's heard

Nathan Latka

01:40text on the screen or it's a talking face like me and my lips are augmented?

Eric Frankel

01:44>> No, well, it can be anything anyone wants and it wouldn't be lips being augmented typically because that technology is still a little fuzzy. So So it can be voiceover, it could be talent on air. So if they were shooting their next commercial, they might say, Here are our 60 important cities and we're actually going to have our spokesperson Nathan record 60 cities.

Nathan Latka

02:03Oh, I see.

Eric Frankel

02:04>> And then we push them all out. And then we can make traditional television commercials now interactive by adding a QR code. Everyone learned how to use QR codes during COVID when we had to download menus when we would go out to eat. So now all of a sudden in the corner it says scan and you do that and you go right to their info page or whatever that brand wants. So whether you're buying movie tickets or

02:30>> whether you're getting somebody from that click company to reach out and talk to you.

Nathan Latka

02:35I imagine click, imagine, sorry, during COVID, you probably saw a lot of expansion, people needing this. I imagine last time we spoke back in 2018, had about 17 employees. How many folks today full time?

Team Size and Global Offices

Eric Frankel

02:46>> We got about 35 and we're, you know, in New York, LA, Philadelphia, London, Paris, Kuwait City, Sydney, Australia.

Nathan Latka

02:56So remote, people are remote?

Eric Frankel

02:58>> Yeah, I mean, no, we just have offices around the world and before-

Nathan Latka

03:02You have that many offices with 35 people, that's gotta be expensive.

Eric Frankel

03:05>> Not not really. I mean, well, what happened, you know, some people wanna work out of offices and some people are working from home in those cities. So, yes, it's a combination of remote and WeWork ish type places I see. Other than LA where we have, you know, significant, you know, real office space.

Funding and Profitability

Nathan Latka

03:20Did you raise Eric, did you choose to raise a bunch more money? Last time we chatted, I think you only had a 10 well, not only, but you raised 10,500,000 in angel round in 2011. Right?

Eric Frankel

03:27>> Yeah. So I think we're up to 12,000,000, but no, we're we're breaking even and making money now. So.

Nathan Latka

03:33Amen, brother, congratulations.

Eric Frankel

03:36>> So that's good, but we're expecting, there's a lot of interest in what we do now as the world has woken up and realized that this is a better mousetrap. So whether it's giant brands, whether it's giant agencies, or whether it's these ad platforms that hire us, so when they sit there and see, Oh, these ads make us different than the 100 other channels in town.

Nathan Latka

04:00Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders, but imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect

04:24your Stripe account, you see your valuation real time, you can see what it changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna

04:48get a different valuation. A VC is gonna pay a different valuation, Private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here, right? So the teal is what a VC would pay. Yellow is what private equity And red is if you sold the whole thing outright. Now what's cool about this is this is

05:10not built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction 1,200,000 seed round 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're

05:36going out right now and you're raising your seed round. We'll go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. All right, we're gonna go back to the YouTube video here in a second, but

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Procter and Gamble Case Study: 25,000 Ad Versions

Nathan Latka

06:24the interview. But how are you so, like, if I'm a big brand, Procter and Gamble selling shampoo, and I wanna go into 80 different geos in The US, The hard work for me, isn't it isn't it isn't the hard work to go record 80 videos with the voice over artists saying Georgia, Wyoming, Texas? I mean, I thought that's what you helped with, but it sounds like that's not what you do.

Eric Frankel

06:41>> It is. So the answer is yes. And we've primarily automated the entire process. The only thing we haven't done because the quality hasn't been great enough yet, but we continue to test it and meet all those vendors is yes. So we can build, we did 25,000 versions of an ad for Procter and Gamble.

Nathan Latka

07:01So how did you do that? Are you hiring the voiceover talent to read the So hundreds of different

Eric Frankel

07:08>> the voice talent called out two twenty four different cities that we pushed the ad out to. There were three retailers, so we would be telling you to either go to Target, CVS or Walgreens, and there were seven days of the week. Besides that, everything else is graphic,

07:27>> there was one ad featured a 20 year old woman, the next a 30 year old woman, the next a 40 year old woman, the next a 50 and 60 year old woman, and the same thing with men, male voiceover, female voiceover, and all of those different versions added up to 25,000. And what we've done over eight years is take that incredibly robust process and figured out how to get it done in a day or a day

07:52>> and a half or something as bespoke as that.

Nathan Latka

07:54That's wild. Okay. And so how do you make Is it just So you mentioned a $100,000 test. Are you just charging a take rate on whatever someone wants to put through you?

Revenue Model and Pricing

Eric Frankel

08:02>> Well, we're getting Depending on the We either get paid a flat monthly fee in scenarios where we work for a brand, or we're getting paid a percentage of ad spend or an additional CPM added on top of the ad spend, depending on who our partner is and what the relationship is.

Nathan Latka

08:21I see, I see. So you're actively then measuring sort of GMV through adgreetz?

Eric Frankel

08:25>> Yes. Yes. So we're out there typically and or with our partners trying to show how we doubled their e commerce revenue or how we drove 8% increase at retail or 100% increase at retail.

Nathan Latka

08:41Will you share how much GMV is going through you today?

Eric Frankel

08:46>> You mean, are you talking about ad spend? Are you talking about how much cash that we're bringing in?

Nathan Latka

08:52No, no, not your revenue, just ad spend through you.

Eric Frankel

08:57>> We're probably Now you have to remember, in certain cases, because we didn't want to disrupt the Apple cart, most of our clients already have their media buying agency. So what we really do is we're the personalization strategist, demo maker, once it's signed off on creating those 100 versions or 25,000 versions, then we work with the media agency and deploy it, and then we automatically optimize and report on it. So, would say that today we're probably at

Ad Spend GMV and Client Workflow

Eric Frankel

09:29>> about $50,000,000 worth of media, but

Nathan Latka

09:33Monthly or annually?

Eric Frankel

09:35>> Just annually. Annually. Annually. Okay. Yep.

Nathan Latka

09:38Yep. Okay. Interesting. And is that the key driver? When you guys set annual goals, is that what you want to grow? Is that the key thing?

Eric Frankel

09:44>> Well, key thing No. Well, we have more and more clients, more and more clients staying longer, so more recurring revenue, and then we have these partnerships. So there's a broadcaster called Nine in Australia. They're the NBC, call it, of Australia. So they now have 600 people out selling our product, and they're bringing in their first clients because this is a three month old or two month old relationship. We expect that they will deliver tens and tens

10:11>> of millions of dollars. They do 2,000,000,000 in revenue, and we get a very significant or a good portion of that revenue. We have someone in The US with 62 salespeople and they're outselling. So they're again facing the same things that we face, which is, Hey, Macy's. Hey, Any Company USA. Let us explain why a personalized version is better. But years later, they're having a great deal of success, but they're still only two or three months, and

Partnership Strategy with Broadcasters

Eric Frankel

10:39>> then we're doing the same thing with people like AMC and Fox and all of these different entities. So as the world embraces it more, there are hundreds and hundreds of salespeople around the world selling our product through our partnership.

Nathan Latka

10:52And how many, that 50,000,000 in GMV that you'll do this year that you did last year, how many customers was that through?

Eric Frankel

10:59>> Probably 18 to 20 customers.

Nathan Latka

11:02Okay, so you're like a boutique ad agency with a productized ad service, right? You don't

Eric Frankel

11:06>> have Yeah, bad mean,

11:11>> and rather than shooting a new commercial, we're taking their existing commercial and coming up with a strategy to produce and deploy 100 or 20,000 versions or a million if it's email,

11:23>> and go out of things that look like letters and things that look like print ads and make them into things that are compelling that people engage with and that are activated by.

Revenue and Customer Count in 2022

Nathan Latka

11:31And Eric, when we spoke back in 2018, you had ten, eleven customers. You told me you did about 2,000,000 revenue then. Are you still around that range or you're much bigger now?

Eric Frankel

11:39>> We'll do close to 10,000,000 with 20 plus clients.

Nathan Latka

11:47This year?

Eric Frankel

11:47>> Yeah. That's great. And because we hit the 10,000,000 mark, now people

11:54>> start coming in and saying, You've passed this hurdle and we'd like to talk to you about investment opportunities.

Nathan Latka

12:01We're buying you. Would you sell the company?

Eric Frankel

12:03>> Sure, but I don't think we'll probably sell until we probably quadruple the revenue. But again, you're not looking for a standard buyer, you're looking for a strategic buyer. So as we start to do this for Fox, Rupert Murdoch can wake up one day and says, This differentiates my entire business. I want to own this thing and pay more than just your typical multiple against it.

Nathan Latka

12:28Is that the plan?

Eric Frankel

12:29>> Goes strategically. Well, him and 100 other people that in various phases of working with.

Exit Strategy and Strategic Buyers

Nathan Latka

12:37Yeah, that's very impressive. 10,000,000 revenue with 35 employees is 285,000 revenue per employee, which is double most VC backed companies, so you're running a very efficient operation.

Eric Frankel

12:45>> And by the way, and a lot of them are consultant types, not a lot, but a half a dozen are the former president of Warner Europe, the former president of Warner APAC, the former president of Warner Latin America, who were huge money earners and now go out and sell to their previous clients and they get paid on a percentage of revenue for a long term. So if they bring in channel four in The UK, they're getting

13:15>> compensated for quite a long period of time because you can't afford to hire salespeople like that because

Nathan Latka

13:21Guys, if want to try these custom ads yourself, check it out, adgreetz.com, a really compelling way to get here in a in a channel that won't be as competitive as those PPC clicks at the top of Google searches where there's perfect competition. Eric, in the meantime, let's wrap up here with the famous five. Number one, last business book that you read.

Eric Frankel

13:38>> Last business book that I read, didn't.

Nathan Latka

13:42Didn't.

13:43Number two, is there a didn't. You don't read business books, right?

Eric Frankel

13:46>> No, because I do this from 6AM. I finished last night with Disney Hotstar in India at 10:45. So then I crashed and got on the phone with my team in Paris this morning.

Famous Five: Books, Tools, and Habits

Nathan Latka

13:58Yeah. Okay. Number two, is there a CEO you're following or studying?

Eric Frankel

14:02>> Well, other than reading the books you're talking about, I'm a voracious reader and I read everything. I'm primarily addicted to the Apple News Feed and all day long to the four people who help me prospect. I'm sending them articles and stories and so on. So the answer is, I look at everyone, but it's not like, Oh, Elon Musk, I'm in love with him, or something like that. I'm looking for anything that's interesting, and then what we do

14:30>> is write them letters and a huge percentage say, I'd like to know more, and then we meet with them with the goal of

Nathan Latka

14:35Smart strategy. Number three, Eric, besides adgreetz, what's your favorite online tool for building the business?

Eric Frankel

14:42>> The simplest, least expensive thing I've ever wandered upon, Rebump. Have you heard of it?

Nathan Latka

14:49I have. This is a very niche tool. Very few people know about this, but it's an email follow-up tool.

Eric Frankel

14:54>> And we used to have a human being when I wrote a letter to you because you were the CMO of Macy's, Nathan, We would have this human being who a week later would send email number two, a week later if we hadn't heard back three and four, all different emails, and occasionally he would miss and we paid him a lot of money and we found a tool. I'm making it up, but I think it's $15 a

15:15>> month and it does the best job. And the percentage of, yes, I'd like to meet with you through this tool is just off the charts.

Nathan Latka

15:26Yeah, guys, those of you looking to go buy a SaaS company, by the way, Rebump is like the perfect target. Small but very passionate customers like Eric, and it just gets the job done. Eric, number four, how many hours of sleep do you get every night?

Eric Frankel

15:37>> About six and a half.

Nathan Latka

15:39Okay. And situation, married, single, kids?

Eric Frankel

15:42>> Married with to my same wife and grown boys

Nathan Latka

15:52>> who live.

15:52How many kids?

Eric Frankel

15:53>> Two boys. So I have a 24 and 28 year old, and my 28 year old's first movie is out at the festival circuit now and garnering great reviews. So we're hope Oh, fantastic. That he'll get some action on it.

Nathan Latka

16:06Very cool. And how old are you, Eric?

Eric Frankel

16:08>> I am 64 years old.

Nathan Latka

16:10Last question. Something you wish you knew when you were 20.

Advice for Younger Self

Eric Frankel

16:15>> I don't think I understood that every day, whether you're 20 or whether you're 64, you get smarter and better at what you do, and you don't know it all, and you'll never actually know it all. And even the Bill Gates's or the Elon Musk's don't know it all, and you just keep on learning and becoming a better leader.

16:39>> That's pretty much it is just

Nathan Latka

16:42Guys, there you have it. Enjoy every moment. Every day is a new one. Adgreetz.com will break 10,000,000 in revenue this year with 35 employees. Really impressive unit economics. Profitable. That's up from 5,000,000 revenue just two years ago. So healthy growth rate here. They help you launch hundreds or thousands of customized ads across 22 different streaming channels for as little as a $100,000, right? But multiple variations, you can name a date, a time, a city, a location,

17:07a specific store or action you want people to take. He's having a lot of success doing this right now with about 20 enterprise clients looking to scale. Eric, thanks for taking us to the top.

Eric Frankel

17:14>> Good to see you, Nathan. Good luck to you.

Nathan Latka

17:18One more thing before you go. We have a brand new show every Thursday at 1PM Central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on three hungry buyers. They try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday 1PM

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18:27for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode and if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, I do it so that we can all learn. We have to counter those people. We got

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