Founder Interview
How Brandzooka Reached 25,000 Users Across 110 Countries in 2016 (Interview with Co-Founder and CEO Aquiles La Grave)
- Interviewee
- Aquiles La GraveCo-Founder and CEO
Company Metrics at Interview Time
Users (2016)
25,000
Countries (2016)
110
Total Funding Raised
$4.5M
Year Founded
2015
Historical Snapshot
These numbers were reported by Aquiles La Grave during the interview and are a historical snapshot, not current figures. See Brandzooka’s current numbers.
Key Takeaways
- 01Brandzooka launched its public beta in late October 2015 and closed that year with about 400 users
- 02In 2016 the platform scaled to 25,000 users across 110 countries
- 03Brandzooka monetizes through variable targeting fees, not subscriptions or flat fees
- 04Targeting charges can range from 0% to 20 to 30% of spend depending on audience refinement
- 05The platform is free to access; revenue is generated only when targeting features are engaged
- 06Brandzooka leverages over 20 data management platforms for audience targeting
- 07The company had raised $4.5M in total capital at the time of the interview
- 08Founder and chairman Alex Bogusky originated the concept; Brandzooka launched in 2015 as a research project
- 09Brandzooka targets the long-tail advertiser market, enabling campaigns for as little as $5 per day
- 10The platform serves OTT channels such as Sling, Roku, Apple TV, and Fire TV
Company Metrics at Time of Interview
| Metric | Value | Source |
|---|---|---|
| Year Founded | 2015 | Founder interview |
| Users at Launch Year End (2015) | About 400 | Founder interview |
| Users (2016) | 25,000 | Founder interview |
| Countries Reached (2016) | 110 | Founder interview |
| Total Funding Raised | $4.5M | Founder interview |
| Example Daily Budget (a Coffee Shop) | $5 | Founder interview |
| Targeting Fee (variable) | 0% (no targeting) to 20-30% of spend | Founder interview |
Growth Breakdown
Users and Geographic Reach
Brandzooka launched its public beta in late October 2015 and ended that year with approximately 400 users. By the end of 2016 the platform had grown to 25,000 users spanning 110 countries, representing a dramatic increase in adoption in its first full year of operation.
Platform Volume
Brandzooka processed $1.5M in gross volume through the platform in 2016, up from about $40,000 in 2015, its partial first year. That is ad spend run through the platform, not Brandzooka's revenue: the company keeps only its targeting charges, and Aquiles declined to share its average margin, saying only that it is "many times higher than what you traditionally see in media." He called the ramp "absolutely stunning."
Funding
Brandzooka had raised $4.5M in total capital at the time of the interview. It was also in the middle of closing its Series A.
Team and Operations
At the time of the interview, Aquiles La Grave, a co-founder, ran day-to-day operations as CEO. Alex Bogusky, "the founder and chairman of the company," who has a distinguished track record in advertising, originated the concept: "this was very much the brainchild of Alex." The platform was self-service, a model that "allows anybody to, in a couple of minutes, launch a primetime TV campaign over programmatic."
Growth Strategy
Self-Service Platform for the Long Tail
Rather than targeting large agencies and enterprise media buyers, Brandzooka built a free-to-access self-service platform enabling small businesses to launch programmatic TV campaigns for as little as $5 per day. This opened a market that enterprise DSPs like Rocket Fuel, AppNexus, and The Trade Desk had not addressed.
Variable Targeting Fee Monetization
Brandzooka monetizes only when users engage targeting features, mirroring the model advertisers already know from Facebook and Google AdWords. This aligns the platform's revenue with the value it delivers, rather than charging flat fees or subscriptions that do not suit performance-focused advertisers.
Access to 20-Plus Data Management Platforms
Brandzooka leverages over 20 data management platforms (DMPs), companies that track behavioral segments online and sell that data to programmatic platforms and DSPs such as Brandzooka and The Trade Desk. That lets small advertisers target audiences by behavior on OTT inventory.
Machine Learning for Media Optimization
Aquiles said Brandzooka's internal machine learning and algorithms allow its media buys to significantly outperform what humans at agencies are able to achieve.
OTT Channel Expansion
The platform served inventory across Sling, Roku, Apple TV, and Fire TV, and was anticipating the ability to address Hulu inventory within the following year as Hulu moved toward embracing programmatic advertising.
Best Quotes
“So Brandzooka is a video advertising platform that is for the first time unlocking the crown jewel of advertising, and that is the TV screen. So we basically marry digital advertising with TV, making it possible to run ads in the same way that you would expect to from Google in a very targeted way, and then delivering those ads on prime time TV, which we think it's pretty cool.”
“So in 2015, we started, we launched our public beta in late October of that year. And I remember we were pretty stoked because we closed that year with about 400 users.”
“2016, we scaled the platform to 25,000 users across 110 countries.”
“It is whatever the percentage of your targeting costs come out to. So if you apply no targeting, if you apply no targeting, there's no monetization for brandzooka. If you apply every bell and whistle to hyper target an audience, that can be 20, 30% in targeting costs.”
“To date we have raised 4,500,000 and are in the middle of closing our series A.”
“I'm the CEO, I run day to day operations, but for all extents and purposes, this was very much the brainchild of Alex.”
What Happened Next
In 2016 Brandzooka reached 25,000 users across 110 countries, and at the time of this interview it had raised $4.5M, with a Series A round in progress. Aquiles La Grave described the move from linear TV to OTT as part of "the largest media transition in history." This page captures the company as it stood at the time of the recording. Visit the Brandzooka company profile on GetLatka for current figures.
View Brandzooka’s current profile and metricsFull Transcript
Chapters
- 0:00Introduction and Guest Background
- 0:32What Brandzooka Does: Targeted Ads on the TV Screen
- 1:10How the Targeting Works: Over 20 Data Management Platforms
- 2:19How Programmatic OTT Advertising Works
- 4:36Self-Service vs Enterprise DSPs
- 6:08Monetization Model and Targeting Fees
- 11:05Launch in 2015 and Growth: Users and Volume by Year
- 13:42Funding History and Series A
- 14:18OTT Inventory: Hulu, Netflix, and Expansion Plans
- 15:24Famous Five Rapid-Fire Questions
Introduction and Guest Background
Nathan Latka
00:00Hello everyone. My guest today is Aquiles La Grave. He is the Founder and Product Leader at Brandzooka. He develops and scales web services that disrupt and delight in addition to building teams that create and create the space for people to deliver extraordinary results and develop product market fit. He writes for publications like Ad Age, Dow Jones, and speaks regularly on subjects ranging from entrepreneurship and ad tech to agile and product development practices for organizations such as Stanford
00:27and IDEO. All right, Aquiles, are you ready to take us to the top?
Aquiles La Grave
00:31Absolutely.
What Brandzooka Does: Targeted Ads on the TV Screen
Nathan Latka
00:32All right. So tell me more about brandzooka and also the revenue model. Is an agency or a SaaS model?
Aquiles La Grave
00:40Yeah. So Brandzooka is a video advertising platform that is for the first time unlocking the crown jewel of advertising, and that is the TV screen. So we basically marry digital advertising with TV, making it possible to run ads in the same way that you would expect to from Google in a very targeted way, and then delivering those ads on prime time TV, which we think it's pretty cool.
How the Targeting Works: Over 20 Data Management Platforms
Nathan Latka
01:10Okay, so hold on, hold hold on. So the obvious question, right, which I'm sure you have an answer for is, okay, you saw that I visited Travelocity on my computer. You know I have an upcoming trip to Tulum, Mexico. When I'm watching the voice tonight on ABC, how do you put a Tulum ad on my TV? Is it cookie tracking? What's the tracking?
Aquiles La Grave
01:29Well, so in terms of tracking technology, we leverage over 20 DMPs. These are data management platforms. So there are giant companies, think of the NSA except not
01:47government funded, whose entire job is to keep track of behavioral segments online. These are companies like Oracle Datalogix that also help fuel targeting on Facebook. We're able to access all of that data.
Nathan Latka
02:04Why? That seems like a big deal. How are you able to access it all?
Aquiles La Grave
02:08Well, DMPs actually are marketplaces that sell that data to programmatic platforms and DSPs such as Brandzooka or The Trade Desk, for
How Programmatic OTT Advertising Works
Nathan Latka
02:19But why isn't ABC, again, I'm using the voice as an example here, I forget what channel it's on, but doesn't ABC, if the voice on ABC have its own sales and they're putting the GEICO commercial there and the other one there, how do you override that?
Aquiles La Grave
02:30Yeah, so let's talk about actually the higher level story here, which is really interesting. We are living through the largest media transition in history.
Nathan Latka
02:42Yeah, Aquiles, sorry, I want to go high level, but I want to understand the detail first. What is it that people listening right now, how should they think about actually experiencing the tech that you're providing?
Aquiles La Grave
02:53Well, the way you experience it is by going to brandzooka.com. It's a free to access platform. You can actually access it with a click of a
Nathan Latka
02:53Sorry.
03:02I mean, if an advertiser is trying to reach them using your tech, right? So if they're watching the voice tonight on ABC, you, they see a GEICO commercial and then after that, a hotdog commercial and something else you're saying your tech is the biggest breakthrough hasn't happened before, you can override essentially those commercials somehow and turn that TV ad space into
Aquiles La Grave
03:19No, no, no, no, we're not overriding anything. So there is this huge transition from linear TV to what's called OTT, over the top TV. We're all experiencing this by accessing services such as Sling, Hulu, the TV apps on Roku, on Apple TV, on Fire TV, etcetera. That is a whole different channel that is a digitally fed channel rather than your traditional linear
Nathan Latka
03:50Got it, you're playing on those OTT channels, not the linear stuff.
Aquiles La Grave
03:54That's exactly right.
Nathan Latka
03:55Got it.
Aquiles La Grave
03:56So when that happens, those commercials that you're seeing over OTT happen over the programmatic spectrum. So unless you're in media or in advertising, programmatic might be a new term for you. Programmatic is basically the marketplace that fuels the buyer seller relationships in advertising. We're very used to this on web. So when you load when you load cnn.com, the ads that you get served are different than the ads that I get served, right? Because they're targeted in
04:29a different way. We're carrying that thesis and that technology over to the TV screen.
Self-Service vs Enterprise DSPs
Nathan Latka
04:36And what do you do that's unique from everyone else? Why can't everyone just go buy access from these data players and do the same thing you're doing?
Aquiles La Grave
04:43So to this point, this space has been serviced by enterprise DSPs, as Rocket Fuel, AppNexus and The Trade Desk. These guys build very high end pieces of software that allow professional media buyers at large media agencies to transact media in this way. No one had gone out and made a self-service platform that literally allowed a coffee shop for $5 a day to do the same.
Nathan Latka
05:14I see.
Aquiles La Grave
05:15And so that is Brandzooka.
Nathan Latka
05:17So you would say the big difference is they're going off to the kind of the big enterprise folks. They have a big inside sales team. You're going after the long tail, which is much bigger, but it has to be a no touch sale.
Aquiles La Grave
05:25That's exactly right. So what we find is, you know, when you go out to a large agency like Starcom, unless you have a quarterly spend that's literally in the millions of dollars, there's nothing those media agencies can do for you. Because
05:42we end up seeing very large brands and it's very repetitive. Brandzooka gives you a self-service model that allows anybody to, in a couple of minutes, launch a primetime TV campaign over programmatic.
05:56And then our internal machine learning and algorithms allow those media buys to significantly outperform what humans at agencies are able to achieve.
Monetization Model and Targeting Fees
Nathan Latka
06:08Got it. Okay, makes good sense. I get the product now. Tell me more about the business. So how are you making money? Is it a cut of spend through your platform? Is it a SaaS play? What's revenue model?
Aquiles La Grave
06:18Yeah, so, you know, we spent a lot of time looking as to the positioning of the platform from a revenue generation standpoint. And what we found is a lot of people have tried to provide self-service advertising platforms for folks, and they generally have gotten it wrong. You can't monetize the long tail through subscriptions. You can't monetize the long tail through flat fees. It just does not
06:51set the right relationship with the end user and what the end user is trying to achieve, which is performance. So at Brandzooka, take an approach that should be readily similar to what folks experience on Facebook or AdWords. It's again, a completely free platform to access and use. And we monetize off of the targeting features that do engage in the platform. So if you go in and you decide to launch a campaign that is targeted very broadly,
07:19let's say you want to target anyone in the universe, there's no value added features that
07:28engaging for that campaign. And so for that campaign, Brandzooka's monetization would be $0 If instead, as you're creating an audience, you decide that you wanna find folks who are in the market to buy a house in a specific zip code and have X amount of income as you refine that audience and you engage those targeting features, and we start engaging our targeting algorithm to deliver your ad to that specific pool segment, then you start seeing our
07:59monetization go up through our targeting charges.
Nathan Latka
08:03Yeah, but just to be clear, you have to pay Sling and the OTT guys some amount, how you win that inventory over all the other guys with the same inventory?
Aquiles La Grave
08:15Oh, that's a fantastic question. So then at that point, you're talking about what are the market dynamics that allow a yoga teacher to be GM?
Nathan Latka
08:26Well, I want to specifically figure out though where you have to be taking, by the way, revenue is not a bad thing. I just want you to tell me where you're getting the revenue from. So if the yoga teacher, let's use the real estate example, actually, you just talked, the real estate agent and specific zip code, let's say I'm making this up, they pay a $100 to run. I don't know what that would get you one
08:42ad and one market, very targeted. Walk me through where that a $100 goes.
Aquiles La Grave
08:47Yeah, so that a $100 is distributed into two costs, media costs, and that's what it takes, right? To get the ad on Sling. That is what I pay Sling to get that ad on TV, right? The other costs-
Nathan Latka
09:02Which is what typically, which is what typically on a $100, let's say it's a 100% of the spend, what percent typically?
Aquiles La Grave
09:08So Sling will charge you on a CPM basis, right? So on a per impression on average, you're looking at about a penny.
Nathan Latka
09:16Okay.
Aquiles La Grave
09:17Right? Yep. So to actually serve that inventory, you're paying a penny to Sling, depending on how refined or how broad, right? That $100 will be split also into targeting costs.
Nathan Latka
09:35And then what's your markup? You have to make money here.
Aquiles La Grave
09:38The targeting cost is the value that brandzooka is providing. It's our monetization.
Nathan Latka
09:43Yeah. Again, so Aquiles, if I put $100 through your platform, brandzooka.com, you'll say, okay, $80 of that's gonna go to Sling, $20 worth keeping. That's our targeting charges. What... I'm trying to figure out what margin are you taking?
Aquiles La Grave
09:55Well, it would be that 20.
Nathan Latka
09:57Oh, you're taking 20%. I guessed it right. Yes. Oh, okay. I didn't know that. You didn't say that.
Aquiles La Grave
10:02No, no. But it's not a flat fee, right?
Nathan Latka
10:0520% of whatever, it's 20% of whatever spend you put through the platform.
Aquiles La Grave
10:09No. It is whatever the percentage of your targeting costs come out to. So if you apply no targeting, if you apply no targeting, there's no monetization for brandzooka. If you apply every bell and whistle to hyper target an audience, that can be 20, 30% in targeting costs.
Nathan Latka
10:28Okay, got it. So, so So it's a variable. It's variable based off how many targeting things, but that is all tied back. I imagine to the fixed cost that Sling charges you for that same amount of targeting. Is that accurate?
Aquiles La Grave
10:42No, because it's a CPM basis. So Sling only charges us when they place an asset.
Nathan Latka
10:48I understand. Sling doesn't care, but you know that it's in a market with this household income in
Aquiles La Grave
10:48That's this exactly right.
Nathan Latka
10:48Sling doesn't care, you're making your margin because of that extra data knowledge that you have, which you pay to get that data from all these big data providers, the DSPs.
Aquiles La Grave
11:04That's exactly right.
Launch in 2015 and Growth: Users and Volume by Year
Nathan Latka
11:05I understand now, okay, very good. All right, when was the company launched, what year?
Aquiles La Grave
11:09So we launched 2015, very much as a research project. The founder and chairman of the company is Alex Bogusky, who's got a distinguished track record in advertising.
Nathan Latka
11:25What are are you founder? Are you co founder?
Aquiles La Grave
11:27What?
Nathan Latka
11:27Are you co founder?
Aquiles La Grave
11:27Yeah.
Nathan Latka
11:27Okay.
Aquiles La Grave
11:29That's right. I'm the CEO, I run day to day operations, but for all extents and purposes, this was very much the brainchild of Alex.
Nathan Latka
11:38That's great. So 2015, that would have been what, I guess three years ago. So you're obviously an early, I'd say, the kind of market adoption curve. This stuff is just now really, I would say, taking off. Walk me through some of your, you know, the metrics you care most about. For example, last year, how much volume did you process through your platform would you say?
Aquiles La Grave
11:57Yeah, so the ramp in terms of growth has been just absolutely stunning for us, right? So in 2015, we started,
12:08we launched our public beta in late October of that year. And I remember we were pretty stoked because we closed that year with about 400 users and did about $40,000 which, you know-
Nathan Latka
12:08In volume.
Aquiles La Grave
12:08Yeah.
Nathan Latka
12:23Pull that forward. What was that in 2016?
Aquiles La Grave
12:272016, we scaled the platform to 25,000 users across 110 countries and did a million and a half.
Nathan Latka
12:27That's great.
12:37Right. And then give me updated the year, 2017.
Aquiles La Grave
12:41Well, our guidance for this year, we're shooting for 5,000,000 in revenue and to top 100,000 users across
Nathan Latka
12:41Hold on 5,000,000 in
12:50revenue or 5,000,000 in dollars processed through your system. Those are different.
Aquiles La Grave
12:56In gross revenue.
Nathan Latka
12:58Gross Got it.
Aquiles La Grave
12:59Yeah. Yeah. Right.
Nathan Latka
13:01Cool. So once you take out your hard costs to sling and stuff, it'll be, it depends on what your, again, your variable kind of targeting fees are, but your revenue will be obviously less than 5,000,000.
Aquiles La Grave
13:10Yeah. I know you're really good at getting data out of people.
Nathan Latka
13:16Well, what do you mean? That's not a skill set. Yeah, just ask.
Aquiles La Grave
13:18Yeah, no, no, absolutely.
13:23I'm not gonna share our average margin, but I would say that it is many times higher than what you traditionally see in media.
Nathan Latka
13:35Yeah, yeah. Well, you said on the high side, it's 20 to 30%. So we can assume it's lower than 30%, but higher than traditional media.
Funding History and Series A
Aquiles La Grave
13:42Yep.
Nathan Latka
13:42Yeah, that's fair enough. I don't need a more specific range. It helps us understand the business. What about funding history? Have you raised or you're bootstrapped?
Aquiles La Grave
13:49Oh no, we have raised pretty aggressively. So to date we have raised 4,500,000 and are in the middle of closing our series A.
Nathan Latka
14:01Are you... How much do wanna raise in the series A?
Aquiles La Grave
14:04We are raising 7.
Nathan Latka
14:06Okay. And you mind me asking on what valuation you're aiming?
Aquiles La Grave
14:10Well, it's gonna be... Our expectation is it's gonna be north of 20.
Nathan Latka
14:15Okay. 20 pre money?
Aquiles La Grave
14:17That's right.
OTT Inventory: Hulu, Netflix, and Expansion Plans
Nathan Latka
14:18Got it. Pre money. That's great. And I guess, well, I'm curious how this space is like, I've never used Sling or these OTT providers. I'm not a huge TV watcher. When I binge on something, just open it up in a browser window and go watch Shark Tank on abc.com versus using a bunch of these providers, but do you see any
Aquiles La Grave
14:35You'll direct see our ads there.
Nathan Latka
14:38So like
Aquiles La Grave
14:39That's on inventory we address.
Nathan Latka
14:40What about like Netflix, Hulu?
Aquiles La Grave
14:43Well, Netflix doesn't serve ads yet. We believe that Netflix will need to address a monetization tier through advertising at some point, but that's up to the good folks at Netflix. And Hulu is just in the process of moving from fully native advertising that is you need to call Hulu, get a service rep and buy inventory that way. I think their minimum rating just from 50,000 to a 100,000 upfront to last year they announced embracing programmatic and
15:16opening themselves up to the channels that we're able to serve.
Nathan Latka
15:19Got it.
Aquiles La Grave
15:20So we expect to be able to address Hulu over the next year.
Famous Five Rapid-Fire Questions
Nathan Latka
15:24Very good. All right, Aquiles, let's wrap up here with the famous five. One word answers here. Number one, what's your favorite business book?
Aquiles La Grave
15:31Getting to Yes.
Nathan Latka
15:32Number two, is there a CEO you're following or studying right now?
Aquiles La Grave
15:38Jeff Green of The Trade Desk. He's incredible.
Nathan Latka
15:41Number four or number three, is there a favorite online tool you have for building your business?
Aquiles La Grave
15:48I'm sorry, you cut out there. Yes, I didn't hear the question.
Nathan Latka
15:51The question was, do you have a favorite online tool that you like using for building your business?
Aquiles La Grave
15:57That would be Trello.
Nathan Latka
15:58Trello, number four. How many hours of sleep are you getting every night?
Aquiles La Grave
16:03Never enough.
Nathan Latka
16:04How much on average?
Aquiles La Grave
16:07I would say about four to five.
Nathan Latka
16:09Okay, four to five. And what's your situation? Married, single, kiddos?
Aquiles La Grave
16:14I have one perfect 5.5 year old who takes my entire weekends and I wouldn't have it any other way.
Nathan Latka
16:21That's great. And married or single?
Aquiles La Grave
16:23Single.
Nathan Latka
16:24That's crazy. All in on the company. Love it. And last question here. How old are you?
Aquiles La Grave
16:29I am 38.
Nathan Latka
16:30Okay. And sorry, actually I lied. Last question. What do you wish your 20 year old self knew?
Aquiles La Grave
16:37How amazing everything is.
Nathan Latka
16:40Guys, there you have a guy who's wearing a Venice t shirt. I would expect nothing other than that answer. How amazing everything is. You have Aquiles again joined up with his co founder back in 2015, taking advantage of a programmatic approach to OTT advertising, either through Sling, Roku, these kinds of platforms, maybe soon Netflix and Hulu as well. Again, a data layer to these placements. They have fixed costs in the form of placement fees with these
17:03guys. They make their margin essentially on their targeting capabilities. They've raised $4,500,000 in capital, currently raising another 7. In
17:132016, actually reached 25,000 users, 1,500,000 in volume going through their platform. That's gross revenue. Aquiles, thank you so much for taking us to the top.
Aquiles La Grave
17:22Hey, thanks, man.