Interview
How AdRoll Group's RollWorks Division Surpassed $2M ARR in Its First Months as a SaaS Product (Interview with CEO Toby Gabriner)
- Interview Date
- June 12, 2018
- Interviewee
- Toby GabrinerCEO of AdRoll Group
Company Metrics at Interview Time
Total Funding Raised
$90M
RollWorks Division ARR (2018)
Over $2M
Profitable (2018)
Yes
Historical Snapshot
These numbers were reported by Toby Gabriner during the interview recorded in June 2018 and are a historical snapshot, not current figures. See AdRoll’s current numbers.
Key Takeaways
- 01AdRoll Group had raised $90M in total funding, with the last round completed in 2014
- 02The company reached profitability in 2017 and remained profitable going into 2018
- 03AdRoll Group launched its account-based marketing solution under the AdRoll banner in September 2017, then officially launched the RollWorks brand in February 2018
- 04RollWorks started with about 200 customers brought over from AdRoll, was adding new customers at about 10% a month, and had already passed $2M in ARR three to four months after launch
- 05Typical RollWorks SaaS contracts ran twelve months and came to $35,000 to $45,000 a year
- 06AdRoll's proprietary dataset included 1.2 billion digital profiles and over 300 million emails
- 07The RollWorks business unit was staffed with 100 people at the time of the interview
- 08AdRoll operated in 120 countries and had 37,000 clients on its platform, 80% of them self-serve
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Total Funding Raised | $90M | Interview, June 2018 |
| Typical SaaS Contract Size (RollWorks) (2018) | $35K to $45K per year | Interview, June 2018 |
| Profitable (2018) | Yes | Interview, June 2018 |
| RollWorks Business Unit Headcount (2018) | 100 people | Interview, June 2018 |
| RollWorks Launch Customers | About 200 | Interview, June 2018 |
| RollWorks Customer Growth Rate (2018) | About 10% per month | Interview, June 2018 |
| Proprietary Digital Profiles (2018) | 1.2 billion | Interview, June 2018 |
| Proprietary Email Records (2018) | Over 300 million | Interview, June 2018 |
| Countries of Operation (2018) | 120 | Interview, June 2018 |
| Clients on the AdRoll Platform (2018) | 37,000 | Interview, June 2018 |
| Self-Serve Client Share (AdRoll) (2018) | 80% | Interview, June 2018 |
| RollWorks Division ARR (2018) | Over $2M | Interview, June 2018 |
| SaaS Contract Low End (RollWorks) (2018) | $3,000 per month | Interview, June 2018 |
| SaaS Contract High End (RollWorks) (2018) | $7,000 to $8,000 per month | Interview, June 2018 |
| Last Funding Round Year | 2014 | Interview, June 2018 |
Growth Breakdown
Revenue
The RollWorks division had already surpassed $2M in ARR within just a few months of its official February 2018 launch, a milestone Gabriner described as validating the company's shift toward a hybrid advertising and SaaS model. The core AdRoll advertising business continued to grow at a good double-digit percentage rate, building on its established global scale.
Customers
RollWorks launched with approximately 200 customers brought over from AdRoll's existing B2B segment and was adding new customers at roughly 10% per month at the time of the interview. The broader AdRoll platform served 37,000 clients across 120 countries, with 80% on a self-serve basis.
Team
AdRoll Group stood up a dedicated RollWorks business unit of 100 people, including a robust sales operation, to support the division's aggressive growth. Gabriner framed RollWorks as a startup spun out of AdRoll with a strong foundation.
Profitability and Funding
AdRoll Group reached profitability in 2017 and remained profitable going into 2018. The company had raised $90M in total funding, with its last round in 2014, and was not actively raising at the time of the interview, though Gabriner would not rule out bringing in additional capital to help drive growth, and pointed to some interesting M&A opportunities.
Growth Strategy
Spinning Out a Dedicated B2B Business Unit
Gabriner said that once AdRoll saw B2B was a fast-growing part of its business, it was very clear it needed a unique standalone business unit for that audience, because the tailoring of the products and the customer lifecycle were very different from its B2C customers.
Leveraging a Proprietary Data Set
RollWorks differentiated itself by tapping into AdRoll's 1.2 billion digital profiles and over 300 million email records to enrich customer CRM data and surface intent signals. Gabriner said this set it apart from enrichment tools such as Clearbit or FullContact: RollWorks ties the data to the execution of the campaigns themselves.
Hybrid Media and SaaS Model
Rather than choosing between an advertising model and a SaaS model, AdRoll Group pursued both simultaneously. RollWorks offered customers two paths: a traditional media path of retargeting and prospecting for customers not yet ready for account-based marketing, and SaaS data enrichment sold on contracts that typically ran twelve months.
CRM and Marketing Stack Integration
RollWorks pushed campaign results directly into tools like Salesforce, HubSpot, and Marketo, demonstrating pipeline movement through the B2B sales cycle.
Targeting Ambitious Direct-to-Consumer Brands on the AdRoll Side
On the core AdRoll side, Gabriner described a deliberate refocus toward what he called ambitious or upstart direct-to-consumer brands, a fast-growing segment the company had been serving and chose to double down on as a distinct growth driver alongside RollWorks.
Best Quotes
“What we bring to market basically is a powerful and easy to use platform for these resource strapped or forward thinking marketers, And the two big components of that are we have a proprietary data set that really enables us to be able to help our clients better understand their customers and the prospects that they're going after, that they're targeting, and then be able to really execute on that in a myriad of different digital channels.”
“We launched our ABM, our account based marketing solution in September of last year, under the AdRoll banner. So that was sort of our first, you know, kind of foray and then moving more aggressively into B2B.”
“We've raised 90,000,000 to date last round we did is in 2014.”
“Dipped into profitability in 2017, that was a big milestone for us.”
“I said to the team, I was like, most startups would kill to have the kind of growth that we're seeing this early. We've only been in market now for three, four months. So it's been a pretty exciting start.”
“We've been scaling about 10% a month in terms of new customers.”
What Happened Next
At the time of this interview in June 2018, AdRoll Group was in the early stages of scaling RollWorks as a standalone B2B business unit, having just passed $2M in ARR a few months after its official launch. The company was profitable, not actively raising capital, and focused on growing both its core AdRoll advertising business and the newly branded RollWorks platform. This page captures AdRoll Group as it stood at that moment. Visit the company profile for information on what came after.
View AdRoll’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction: Toby Gabriner and AdRoll Group
- 0:41AdRoll Core Business: What It Does and Who It Serves
- 2:00Business Model: Advertising vs. SaaS Hybrid
- 3:41AdRoll Core Business Scale and Global Footprint
- 4:59RollWorks Launch: From ABM to Full B2B Growth Platform
- 8:22RollWorks Pricing: Media Spend and SaaS Contracts
- 10:43RollWorks Customer Growth and Business Unit Scale
- 13:10Churn and AdRoll's Direct-to-Consumer Refocus
- 14:10Funding History: $90M Raised, Last Round in 2014
- 14:26Profitability: Reached in 2017, Continuing in 2018
- 15:04Famous Five: Books, CEOs, Tools and Life
- 15:58Advice to His 20-Year-Old Self: Practicing Patience
Introduction: Toby Gabriner and AdRoll Group
Nathan Latka
00:00Hello everyone. My guest today is Toby Gabriner. He's the CEO of AdRoll Group and oversees both divisions of the company's growth platform business AdRoll and the recently launched RollWorks, which we'll talk about today. He's got leadership experience at high growth companies that span two decades including the forefront of positioning AdRoll as a key company in the marketing technology sector. His experience includes serving as president of Carat Interactive, one of the first large digital agencies and one
00:25of the first demand side platforms as president and CEO of adap.tv. Under his leadership, that company grew revenue from 200K to over 200,000,000 in four years and was acquired by AOL in 2013 for $465,000,000. All right, Toby, you ready to
00:39take us to the top?
Toby Gabriner
00:40Let's do it.
AdRoll Core Business: What It Does and Who It Serves
Nathan Latka
00:41All right. Tell us about AdRoll and focus first kind of on the core business, what you're really have been known for over the past long period of time. And then let's jump into RollWorks, the new suite you've reached out.
Toby Gabriner
00:52Absolutely. So the genesis of the company was really focusing on providing what we would say are ambitious marketers, marketers who are early in their journey in terms of having resources and the tool sets to be able to compete effectively. So what we bring to market basically is a powerful and easy to use platform for these resource strapped or forward thinking marketers, And the two big components of that are we have a proprietary data set that really
01:31enables us to be able to help our clients better understand their customers and the prospects that they're going after, that they're targeting, and then be able to really execute on that in a myriad of different digital channels. So whether that be on desktop, mobile, in app, email, and even on-site creating, you know, personalized promotional experiences for users as they hit our customers websites.
Business Model: Advertising vs. SaaS Hybrid
Nathan Latka
02:00And some figures have been released. It sounds like in 2016 you guys passed the $300,000,000 run rate now. Is that a pure play? Are you a pure play SaaS company or is there kind of a percentage of, you know, ad spend through your platform kind of model as well?
Toby Gabriner
02:15Historically, it's been the latter. However, as we moved into 2018, and it's actually a good segue into the launch of RollWorks, we're now what I would describe the hybrid. We have a traditional advertising type model that we bring to market, but now we're also have moved into a SaaS world. And we launched RollWorks really focused 100% on B2B marketers while we're solving a similar problem that we saw for our B2C customers. The, tailoring of the products,
02:55the customer lifecycle, there's just a lot that's very different. As we started to take a step back and see that that was a fast growing part of our business, it was very clear that we needed to create a unique standalone business unit that was going to focus on that particular audience. And what we do for them is we actually onboard their CRM data. Again, we enrich it with our huge proprietary dataset, and then execute on campaigns
03:25and demonstrate by pushing back into whether it's Salesforce, HubSpot, Marketo, how we're moving their prospects along the continuum of the different stages of a B2B life cycle sales process.
AdRoll Core Business Scale and Global Footprint
Nathan Latka
03:41I want to dive deeper into that model, but first let's just put a cap and a rubber band on the percentage of ad spend model. Does that continue today to be about a $300,000,000 business for you guys or is that still growing larger than that as well?
Toby Gabriner
03:54It's continuing to grow.
03:58It's still a great business. We've been very fortunate in a market that's had quite a bit of attrition of players. You know, we continue to be scaled and growing and it's something we're quite proud of. We have a global footprint. We operate in 120 different countries. We've got 37,000 clients on platform, 80% of them are self serve. So we've got this sort of big engine that continues to really drive and yeah, we're excited about our continued
04:29growth going forward.
Nathan Latka
04:30And Toby, what was 2017 revenue just on that product line?
Toby Gabriner
04:35On our, so the number you saw was actually our run rate going into 2017.
Nathan Latka
04:41Ah, I see.
Toby Gabriner
04:43As we go into 2018, we're building on top of that.
Nathan Latka
04:47Got it. I mean, three fifty, 400, can you share that number?
Toby Gabriner
04:51We're seeing, we're not yet releasing, we're seeing good double digit percentage growth.
RollWorks Launch: From ABM to Full B2B Growth Platform
Nathan Latka
04:59Okay, fair enough. Good. So I'll call it north of 10% growth. That's healthy when numbers are getting that big. So let's go full into RollWorks now. Okay. So SaaS, as you mentioned, very different kind of business. The way you just described RollWorks, the question I had in my head is there's a lot of these SMBs small to middle sized companies where they'll pay for licenses to things like Clearbit or FullContact to kind of enrich their data
05:20and time with their CRMs. How is this RollWorks product different?
Toby Gabriner
05:24It's different because of a couple of areas. One is that it's very tied to the execution element of their campaigns. So, you know, each of those companies that you described sort of provide different ways that they're enriching, oftentimes really enabling sales folks to, you know, get a better understanding of their named account list. What we're doing is actually looking at even things like intent signals, you know, where are the target accounts are in terms of their
06:01buying spectrum. So we're able to really kind of dig in layers deeper that are driving ultimately, as I mentioned before, the prospects through the various stages of the sales cycle ultimately. So it's a slightly different use case on the data, and again, what we've got are 1,200,000,000 digital profiles. We have north of 300,000,000 emails, And so we have a huge amount of intent signals that come in and we use that to really help drive the execution
06:41layer ultimately on the marketing side.
Nathan Latka
06:44And what month and year was RollWorks launched in?
Toby Gabriner
06:46So we launched our ABM, our account based marketing solution in September of last year, under the AdRoll banner. So that was sort of our first, you know, kind of foray and then moving more aggressively into B2B. Then on 02/27/2017, we officially launched the RollWorks brand.
Nathan Latka
07:07Okay, got it. And when was AdRoll launched as a company?
Toby Gabriner
07:102010. We've for bit over ten years now.
Nathan Latka
07:14Okay. Again, just on the RollWorks product, just used a different term, is obviously your ABM offering. Those are the same thing, correct?
Toby Gabriner
07:22Yeah. ABM is a acronym for account based marketing.
Nathan Latka
07:25Yeah. I just want make sure that is account based marketing is what RollWorks is delivering.
Toby Gabriner
07:30It a portion of that. I think this is one of the important differentiators is that we're really in market providing what we would call a really full solution, B2B, what we call growth platform. But you can think of it as almost like a cloud solution. So it's not only the account based marketing, we also do a fair amount in our heritage is in driving in new leads. We have of course our flagship retargeting that we bring to
08:01bear. Those actually are not necessarily what is considered true account based marketing, but they're equally important in terms of driving opportunities into the funnel, which then you're able to start to better understand and develop named account list. And then you go into more of an account based marketing type execution.
RollWorks Pricing: Media Spend and SaaS Contracts
Nathan Latka
08:22So when you look at the cohort that started using a RollWorks product since you've launched it over the past year or so, what are they paying on average per month to use the tool?
Toby Gabriner
08:31So first of all, we launched it with about 200 customers. So I think it's important, you know, going back to the heritage, it was one of the fastest growing segments in the company and we really saw an opportunity to lean in. We brought over about 200 customers, and the way the model works is just that our customers kind of can sign up for two different paths. One is that the traditional media solution, if they're not ready
09:03to use ABM yet. So that includes retargeting, prospecting, again, driving in sort of the unknown opportunities into their funnel ultimately. The account based marketing, and that by the way, and the media spends on that can range, you know, typically our minimum is around $10, but we have customers that are spending, you know, millions of dollars on an annualized basis. And then the
09:30SaaS space where we're doing the data enrichment component of it is, are typically twelve month contracts, and they range, you know, depending on usage, can range as small as $3,000 and we have some that are in the 7 to 8 thousand dollars on a monthly basis.
Nathan Latka
09:47Okay. Is it fair to say though, if we look at an average across those initial 200, about $3 a year is pretty standard?
Toby Gabriner
09:54On the SaaS side, I would say our typical contract sizes are probably between 35 to 45 thousand on an annualized basis.
Nathan Latka
10:04Oh, good. Okay, good.
Toby Gabriner
10:05Yeah, yeah. But I do think it's important, Nathan, to call out is that we are early days on that and that's sort of like our base level offering. We are, as you can imagine, we have a very active product roadmap and we'll be introducing a lot more. So that will iterate over time, but that's our baseline that we've gone after.
Nathan Latka
10:27That's code for if you're listening to us right now, don't email Toby and say, wait, your sales person just gave me a price that was four times what you said on Nathan Latka's podcast. Why can't I get that deal? And the answer is there's new products now.
Toby Gabriner
10:40I suspect they're not, that hasn't happened yet.
10:42But yes, it's coming.
RollWorks Customer Growth and Business Unit Scale
Nathan Latka
10:43Very good. Now, Toby, are you restricting the addition of new customers to this property now? Is there still just 200 as you fine tune or have you let other others on?
Toby Gabriner
10:52No, absolutely. We're growing really quite rapidly. We have a,
10:59I alluded to before, we stood up a full business unit that business unit makes up a 100 people. We obviously have a fairly robust sales operation. So we're absolutely out aggressively bringing in new customers.
Nathan Latka
11:13So how many customers are on it today?
Toby Gabriner
11:15So we've been scaling about 10% a month in terms of new customers.
Nathan Latka
11:19Okay. You know, if you...
Toby Gabriner
11:21The way I think about RollWorks is really is a startup that has been spun out of AdRoll, you know, with a of a strong foundation. But, you know, our trajectory, and you kind of went through my background, I've been in early stage companies. I said to the team, I was like, most startups would kill to have the kind of
11:44growth that we're seeing this early. We've only been in market now for three, four months. So it's been a pretty exciting start.
Nathan Latka
11:54I mean, fair to say too, if you've got 200 customers paying that average price point just for the SaaS product you just articulated, I mean, just that line is doing north of what five fifty grand a month at this point, correct?
Toby Gabriner
12:09No, it's not. Well, you got to think about it on total contract, it's not that. We are... The way I would look at it Nathan is what we've already tipped over into over $2,000,000 in ARR.
Nathan Latka
12:09Perfect.
12:21I should have just asked that directly. So you're already past a $2,000,000 kind of run rate on that product.
Toby Gabriner
12:27Yeah. And for us, it's really exciting. I mean, you know, we've been on this journey of really transforming the company as I mentioned before, really moving to this combination of providing media solutions and SaaS based, you know, a lot of around data solutions to sort of see that really taking off. And, you know, it's grounded in our firm belief that marketing technology and ad technology, ad tech and martech are really starting to come together and we've
12:57really kind of been on the forefront of pushing those two solutions to start working in concert with one another. And so far it's been on the RollWorks side, been really validating to see that marketers are buying into that.
Churn and AdRoll's Direct-to-Consumer Refocus
Nathan Latka
13:10We're running out of time here Toby, last few economics questions just on the RollWorks product. Obviously your business is much bigger than just the RollWorks, but this is what you're most excited about. What's churn right now on the product? Have you lost anybody?
Toby Gabriner
13:21No, early days on that. We're a knock on wood. I mean, obviously,
13:26you know, we don't want to get too far ahead of ourselves. We will certainly have some turbulence along the way, but so far, you know, we're and part of it is also, know, these are contracts. So, we won't really know until, you know, this time next year. I do want to call out, while we are very excited about RollWorks, the AdRoll business and sort of way we've been leaning on that side going after, you know, we've
13:53rebranded and we're really focused on what we call ambitious or upstart, you know, direct to consumer brands. I'm sure you've been following on this explosion of companies, you know, we've really been at the nexus of that for a while and so that's an area that we're very excited about as well.
Funding History: $90M Raised, Last Round in 2014
Nathan Latka
14:10That's great. Now talk to me real quick of funding history. I don't think you're bootstrapped. How much have you raised?
Toby Gabriner
14:16We've raised 90,000,000 to date last round we did is in 2014.
Nathan Latka
14:21Are you raising right now?
Toby Gabriner
14:22We are not.
Profitability: Reached in 2017, Continuing in 2018
Toby Gabriner
14:26Dipped into profitability in 2017, that was a big milestone for us. We're continuing to...
Nathan Latka
14:32Are you still profitable today?
Toby Gabriner
14:34Yes, and I was just gonna say 2018, we're continuing on that path. I don't want to say that we wouldn't consider bringing in additional capital to help drive our growth. We think there's some interesting M and A opportunities, but we, you know, our balance sheet is great and we feel really good about where the business is.
Nathan Latka
14:52Would you consider any secondary offerings just to make the early employees happy that took equity instead of larger salaries from the early times?
Toby Gabriner
14:58In my role, you know, everything is under consideration at any point.
Famous Five: Books, CEOs, Tools and Life
Nathan Latka
15:04That's the right answer, Toby. All right guys, let's wrap up here with the famous five. Toby number one, what's your favorite business book?
Toby Gabriner
15:12I'd say the business book that's resonated the most over the last few years for me is Multipliers.
Nathan Latka
15:18Number two, is there a CEO you're following or studying right now?
Toby Gabriner
15:21My latest CEO that I've really been digging in on is Jeff Bezos.
Nathan Latka
15:27Number three, is there a favorite online tool you've got for building your business besides your own?
Toby Gabriner
15:33That was tricky. I saw that. Wunderlist is like my most favorite tool right now in terms of just managing my life, which I think in turn helps me manage the company better.
Nathan Latka
15:43And Toby, how many hours of sleep are you getting each night?
Toby Gabriner
15:46I'd say an average about six.
Nathan Latka
15:48That's pretty good. What's your situation? Married, single, kids?
Toby Gabriner
15:51I am married and I have three children.
Nathan Latka
15:54Three kids and how old are you?
Toby Gabriner
15:56I am 47 years old.
Advice to His 20-Year-Old Self: Practicing Patience
Nathan Latka
15:5847. All right, take us home here. What do wish your 20 year old self knew?
Toby Gabriner
16:03What I would call practicing patience.
Nathan Latka
16:07Guys, there you have it. Practice patience. He's certainly done that. Launched AdRoll back in 2010, grew that to well north of a $300,000,000 business before realizing, we have a real opportunity to build a product here that's more account based marketing focused or growth focused. They've rolled out RollWorks over the past several months. Started with 200 customers. Now that product just several months in has already passed $2,000,000 in ARR too early to talk about economics on that,
16:32like churn CAC, ARPU, etcetera, but we'll stay in touch with Toby. Toby, in the meantime, good luck on the growth and thanks for taking us to the top.
Toby Gabriner
16:39Thank you, Nathan. Have a great one.