How MonetizeMore Reached Over 300 Publishers and $150 CAC in 2020 (Interview with Kean Graham)

Introduction and Business Model Overview

Nathan Latka

00:00Hello, everyone. My guest today is Kean Graham. He's a founder and creator of a company called monetizemore.com, which empowers ad monetized publishers. Alright. Kean, you ready to take us to the top?

Kean Graham

00:12Absolutely.

Nathan Latka

00:13Okay. So walk us through this. This is obviously in the ad tech space. Is it a SaaS platform or is it a different monetization strategy?

SaaS Plus Service Structure and Product Tiers

Kean Graham

00:21It's a SaaS plus a service. So it's kind of like a combination.

Nathan Latka

00:25Okay. So help us really understand that over the past twelve months, if you add up all your revenue, what percent was SaaS versus service?

Kean Graham

00:33It's combined for most publishers. So it kind of breaks down. We have a starter publishers, which resell a demand source that is like the premium version of AdSense called Ad Exchange. We have Pro where we sell an auction technology, and then we have Premium, which is a white glove service. And this is all intertwined with our reporting platform called PubGuru that gives them the deep stats to help them dig in and come up with a new

00:59ad optimization for their ad inventory.

Nathan Latka

01:01So again, if you look at all your revenue over the past twelve months, what percent of that revenue would you say was SaaS?

Kean Graham

01:09That would... With a SaaS combined, that would be about over 95%.

Nathan Latka

01:15Oh, got it. So 95% SaaS with a little bit of service.

Kean Graham

01:15Yes.

Nathan Latka

01:15Yeah. I see. Okay. Describe one of the customers that pays you. Can you name one?

Customer Examples and How MonetizeMore Helps Publishers

Kean Graham

01:25Yeah, like one of them, boredpanda.com, Lifehack.

01:32We're big and growing in the LATAM region. So we have a lot of big Brazilian pubs, for example. And we typically focus on the premium and that's kind of a difference versus our competitors. We go for the larger, more sophisticated publishers.

Nathan Latka

01:49So boredpanda.com, again, big publisher, art, photography, animals, funny, featured, all this stuff. Are they a Latam focused company?

Kean Graham

01:58No, they have traffic from all over the world. They're based in Europe.

Nathan Latka

01:58How do

02:02they walk us through? They sign up with you guys. How do you help them?

Kean Graham

02:06So before they were running Google AdSense to monetize their ad inventory, and then we started working with them, we replaced their technology with our auction technology. And rather than Google just competing for their ad inventory, we created this auction where Google competes against Facebook, Amazon, Index Exchange, all these different bidders. Our technology chooses the highest bidder and places the advertiser in the ad placement. And we do that for hundreds of millions, sometimes billions of ad impressions

02:38and that creates a large revenue increases and we take a revenue share of that.

Nathan Latka

02:43I see. And and is the rev share the 5% of your business that you call service or the rev share is the SaaS part of the business?

Kean Graham

02:50It's the SaaS part of the business.

Nathan Latka

02:52I see. Okay. Interesting. So just to be clear, monetizemore helps publishers like Bored Panda pit Google against Facebook, against other sort of platforms in terms of helping them get the best CPC or CPM.

Kean Graham

02:52Yep.

Nathan Latka

02:52Interesting. Okay. And so I guess give us some context here. What year did you launch the company in?

Kean Graham

03:15Sorry?

Nathan Latka

03:15When did you launch the company? What year?

Founding Year and Bootstrap Decision

Kean Graham

03:18Oh, two thousand ten.

Nathan Latka

03:192010. Okay. And then did you bootstrap or decide to raise?

Kean Graham

03:24Bootstrap from the beginning.

Nathan Latka

03:25Bootstrap. Love that, man. Very cool. And what's the team size today? How many folks?

Team Size, Remote Culture and Engineering

Kean Graham

03:31Over a 160.

Nathan Latka

03:32Okay. A 160 people spread out through the world, or what would they look like?

Kean Graham

03:36Yep. All over the world. A 100% remote.

Nathan Latka

03:39100% remote, interesting. So, I mean, what is that like? Were you remote before COVID or you just went remote?

Kean Graham

03:45We were always remote. The vision from the beginning was to go remote. It was me for the first three years and the reason I started the business was to live a location and schedule free lifestyle.

Nathan Latka

03:56That's a good way to live it. How many engineers are on the team?

Kean Graham

04:00About 25.

Nathan Latka

04:0125. So what do the rest of the folks do? What do the other 120 do?

Kean Graham

04:06A lot of the others are in ad optimization, kind of like customer success, working directly with them, account reps, doing ad optimization for them, helping them with their in house ad operations teams to make sure that they get the most out of our technology and ultimately hit their ad revenue goals.

Nathan Latka

04:26And Kean, do you have any quota carrying sales reps or no?

Sales Reps, Lead Volume and Inbound Strategy

Kean Graham

04:31We have sales reps. However, it's based on commissions, there's no OTEs.

Nathan Latka

04:37Got it, got it. So there is no full time salary. It's all based on commission?

Kean Graham

04:43There's full time salaries plus commission.

Nathan Latka

04:46Oh, there is. Okay. So how many sales reps do you have where there are commission components?

Kean Graham

04:52We have five.

Nathan Latka

04:53Five. Okay. Walk us through that process for a second. How do you make sure that you fill their calendars with hot leads?

Kean Graham

05:01Well, so we... One of our biggest competitive advantages is our content marketing and we get over 95% of our leads from inbound. So we have a very active blog, we have a lot of evergreen pillar posts, and the traffic's coming in. We're very active on social media, we're answering questions on forums, we have an active YouTube channel, and we're getting constant leads, and we're hitting new records actually recently these months in terms of the sellable leads

05:31that are coming in.

Nathan Latka

05:32How many?

Kean Graham

05:35Last month we were 160, and that's out of a total amount of leads of over 500. So we're rejecting most of them because we're on the premium end and we reject for traffic reasons, for policy, traffic quality, all that, we're very picky.

Revenue Share Model and Pricing

Nathan Latka

05:55Ignore the other components except just traffic volume. How much volume does a blog have to have? Well, first of sorry, are you selling to the, yeah, the blog is who's paying you. The blog is paying you a percent of the revenue increase that you drive. Is that right?

Kean Graham

05:55Exactly.

Nathan Latka

05:55Okay. Not total ad spend, just only a percent of what you increase over the baseline.

Kean Graham

06:14For some, yes. For others, it's their programmatic revenues, which is their unsold ad inventory, what they don't sell directly.

Nathan Latka

06:22I see. Okay. So of the 500 leads that come in, you only picked 160 to sort of work with. What's the traffic cutoff? What's the minimum traffic a site has to have to work with you?

Kean Graham

06:33So for starter, it's half a million pages per month. For professional, that's 10,000,000 pages per month. And for premium, it's 20,000,000 pages per month.

Nathan Latka

06:45Okay, and I imagine each of those plans, take a lower and lower percentage of the programmatic revenue?

Kean Graham

06:56Typically, the baseline is between 15 to 20%.

07:00In ad tech, things are negotiable. So the larger traffic volume makes it more negotiable.

Nathan Latka

07:06Yeah. Yeah. How do you... So like we had Bill Wise on with Mediaocean, right? And one of the things he told me is he feels like he's got a massive advantage because of the amount of volume he works with. He can really charge like a low, low, low percentage because of volume. And there's a lot of people that are bringing these sorts of teams in house to do ads because of this sort of ad tax,

07:25where there's platforms like you that sit in the middle. Now to be fair, I've heard of other founders where they're charging way more than 15 to 20% sitting in the middle. So I would say that you're pretty competitive there, but how do you think about that?

Kean Graham

07:36Yeah, yeah, for sure. Some really push on the revenue share side. Negotiation is really important in our industry. However, we compete with quality. I spoke about our auction technology, our reporting platform, we have other tools that are not offered by our competitors. And that's really what we bring to the table is that quality, we're a product led business and we want to compete on quality rather than price.

Customer Count and June 2020 Growth

Nathan Latka

08:06I think that makes good sense. And so how many of these publishers... How many of these customers are you working with now today?

Kean Graham

08:11Over 300.

Nathan Latka

08:13300? Wow. Okay. Got it. So so just to fill out earlier, when you said you had 500 sellable leads come in and one sixty qualified, was that in, like, June or what was the time they just came in?

Kean Graham

08:23That was last month. Yeah.

Nathan Latka

08:24June. And so of the 160 using your sales reps, about how many will you close convert to new customers?

Kean Graham

08:32Of those, we had a sell through of 26%. So that would give, yeah, about like 40.

Nathan Latka

08:41Yeah, 40 new customers. That's great. Okay, wow. So you really grew your customer base a ton in June. I mean, you went from two sixty to 300 customers.

Kean Graham

08:49Yeah, things are really popping. It might be pandemic and the pie definitely shrunk during the pandemic. However, we've really hit our stride. We kind of had a big kind of growth mark in Q4, which continued into 2020.

Nathan Latka

09:03Why did growth shrink? When, for example, Target have to spend more money to drive clicks to their e commerce brands since they can't rely on foot traffic anymore?

Kean Graham

09:13There's aspects of that, but overall, like in programmatic, a lot of them are big brand advertisers that really kind of slash their display advertising funds. And overall, when the ad spend pie shrinks, that means there's less money overall for publishers earn. So the RPMs, you called CPMs, so the revenue per thousand ad impressions, those decreased overall starting in the middle of March.

Nathan Latka

09:41I see, okay. And give me a sense of volume you're processing. So in June, how much ad spend went through your platform?

Ad Spend Volume and June 2020 Revenue

Kean Graham

09:50Overall, in June, there was

09:55about 3,000,000.

Nathan Latka

09:57About 3,000,000. Okay. Great. So how do you... I mean, how do you get, like, 3,000,000? How do you turn that into 10,000,000 and 30,000,000? Is that like... How do you ex... Let's just say you can't add any new customers. You can only expand accounts. How do you get a larger portion of the inventory from those publishers and how do you win that inventory over from them using, you know, and selling it directly to Google?

Kean Graham

10:16Yeah, well, typically what happens, especially with the large publishers, is they only wanna start a little bit, right? They wanna do like a split test to see if you can outperform what they're currently running. So they'll start you at 10% and then once you kind of prove that you can make them more money, then they'll expand you more and more. So it's about winning the split test. Sometimes we're doing split tests against competitors. So it's about

10:38winning these split tests. It's about having very efficient technology so we're not slowing down the page. It has to be SEO friendly. It's about having these other upsell tools. Like for example, another tool that we recently launched is called Traffic Cop, and it detects and blocks invalid traffic. So it prevents these publishers from getting banned by say Google AdSense and losing all their unpaid ad revenues overnight.

Nathan Latka

11:06Don't some of these publishers though intentionally use some of these bots themselves to drive more clicks to their sites specifically so they can monetize more?

Kean Graham

11:15Yes, some of it is pub induced and we have to be kind of investigators to make sure we separate the ones who are genuine versus the ones who are not. And our Traffic Cop tool is part of that. We've also come up with other type of violations that publishers can do on purpose, like we call it ad setup policy violations. And it's things like hiding ads off the page, refreshing ads very aggressively, things like that. So

11:44we technology that can now detect it and provide that information to the publishers. And then there's certain things that we see that we know that it's pub induced, and we deal with it accordingly because it's... It can get pretty nasty and we don't wanna hurt our partnerships with Google and all the other ad networks.

Nathan Latka

12:02So I land in ink and they autoplay a video in the footer, which I'm never gonna scroll down and see. Does that count as an impression or not?

Kean Graham

12:09That is an ad impression. We do tend to stay away from the video sticky ads. They're very intrusive and they're kind of more short term thinking. We're more of a long term bootstrap company that wants to go with less intrusive ads that you have, you continue to grow your traffic and get return traffic. So we stick with the less intrusive ads.

Nathan Latka

12:333,000,000 through your platform in June 2020. So last month across 300 publishers that are using you, if you take again between 15 to 20%, 20% of 3,000,000 would be about $600,000 in revenue to the company in June. Is that accurate?

Kean Graham

12:50No. So when I say 3,000,000, because we accept the revenues on behalf of the publishers and some we don't, especially the big ones. So the 3,000,000 is an estimation of the ones we don't as well. In June, we were close to 400,000.

Nathan Latka

13:06Okay, got it. So on 3,000,000 going through your platform, whether you recognize it or not, you still made about $400,000 so that you could reinvest in your engineering, grow your team, support everybody and keep building new tools like this traffic tool.

Kean Graham

13:21Yep, exactly. We're pouring in a lot of resources into our engineering team to have the best product in the ad tech industry.

Enterprise Strategy and Year-Over-Year Revenue Growth

Nathan Latka

13:28That's great. Okay. So as you think about growing the company over the next twelve months, is it gonna be more of a strategy of winning more business from current customers, winning more of these AB tests, right? Or is it gonna be go, you just mentioned record month in June, 40 new customers, it's gonna be adding new customers altogether.

Kean Graham

13:47Yep, so that keeps on flowing in. We're still gonna be winning from that, but the big strategy is enterprise. We wanna go for the big boys. We're talking top 1,000 ad monetized publishers. Our BHAG is to have 25% market share of the top 1,000 ad monetized publishers. And we're building solutions that are better fit for these enterprise publishers that are very sophisticated and need to be approached in a different way.

Nathan Latka

14:14And so help me under... So people are going, okay, I wonder if Kean can execute that. They're gonna think, well, okay, well, what has he grown at historically? So if you're doing the cost $304,100 grand a month today, what were you doing a year ago? Do you remember?

Kean Graham

14:26A year ago, we were at, for June, it was around $225,000.

Nathan Latka

14:32So you still even have growth, even though sort of COVID has just shocked the world.

Kean Graham

14:39Oh, absolutely. Yeah, we've grown despite COVID. In Q1, we were at close to around double revenue growth. It slowed down a bit for the pandemic, but we're still rolling along and still have that momentum from the growth back in q four.

PubGuru Ad Inspector Chrome Extension and Upsells

Nathan Latka

14:57Besides your SEO strategy, you mentioned your YouTube channel. Are there any other channels you're using to drive growth? Again, you had 500 leads come in in June alone.

Kean Graham

15:05We we also have a free Chrome extension called PubGuru Ad Inspector. And what it allows publishers to do is they'll run it on their actual site that is ad monetized, and it'll crawl the whole page, find any errors, any warnings, any revenue opportunities, and it'll make very specific recommendations for their site to realize opportunities or fix those errors. There's actionables of how to fix each one of those, and some of those are natural upsell to our

15:34products. We detect they're not running any IVT detection, then we will upsell Traffic Cop. If they're not running any auction monetization, which you call header bidding, then we'll recommend PubGuru header bidding. There's a lot of natural upsells within there that we've also been getting a lot of leads from. And the audience that's running PubGuru Ad Inspector has been growing consistently week to week.

Nathan Latka

16:01So when you add up all of these sort of strategies to bring customers in, right, these great mouse traps, what would you say that your CAC is to acquire a new customer where you're making, you know, a grand a month from them?

CAC Calculation and Marketing Efficiency

Kean Graham

16:13Yeah, so because we're mostly inbound, when we calculate CAC, we include all our fixed costs of the whole marketing department that and comes to a $150.

Nathan Latka

16:22That's great. Yes. So many CEOs don't do that because they want the CAC to look the best. But the... What I say is, listen, do like fully weighted CAC. You take all your expenses last month and divide by all your new customers. That's your worst case CAC. And then you can do a version that's only your marketing team. And then you can do also do a version that's like only your paid spend, for example. But you

16:40choose to use just all marketing, salaries, expenses, support of a Chrome extension, all marketing.

Kean Graham

16:46Yep. Yeah. Yeah. We even cut up Slack, all that. It's definitely worst case.

Nathan Latka

16:50Well, $150 to get a new customer and they're, you're making on average across 300 customers about, what is that 1,300, $1,400 per month on average per customer, the math works.

Kean Graham

17:00Yeah, yeah, yeah. We're quite profitable and we have a conservative growth. We're doing the long play, but we're turning it up as we grow to more aggressively go for, especially these large publishers.

Ownership, Reinvested Profits and Buying Content Websites

Nathan Latka

17:14So how do you think about this as a personal... Do you own the majority of the company? Are you a 100% owner?

Kean Graham

17:19A 100% base equity.

Nathan Latka

17:20What does that mean?

Kean Graham

17:22We have stock options for our executives.

Nathan Latka

17:25Oh, got it. Fair enough. Fair enough. But you... Okay. So you have a 100% base.

Kean Graham

17:25Yeah. That's what meant.

Nathan Latka

17:25So you could really choose to do whatever you wanna do with the company. You could launch a plan where profits are distributed out as dividends. You can just let profits, you know, pile up in the bank account. You could pay profits out to this, you know, the executive. I mean, how do you choose to handle profits as

17:41a Bootstrap Founder with full control?

Kean Graham

17:43Yeah, so right now we're keeping it within the company. There's a lot of reinvestment. One of the ways that we reinvest our profits is we buy content websites that are ad monetized, apply our technology, and then we increase the ad revenues immediately and we get the full increase rather than a percentage of the increase. And we have a growth hacking team that also increases the traffic. So that's been a really nice return. In terms of dividends,

18:11I've never taken dividends for myself. I live pretty frugally and happily as a kind of nomad entrepreneur that travels around the world.

Nathan Latka

18:20As we see the Christmas lights hung above your window behind you with sort of you know, homemade curtains, right?

Kean Graham

18:28Yeah, yeah, exactly. Yeah, I'm from a small town, so I'm happy with the simple life.

Nathan Latka

18:32I love that. And on $400,000 in sort of top line revenue each month, mean, much are you taking to the bottom line would you say before you go spend money on acquisitions?

Profitability Track Record

Kean Graham

18:41So, yeah, we're not gonna disclose the bottom line stuff, but yeah, we've been profitable every year, every one of our ten years. And I can say that this year we're on track to be the most profitable we've ever been.

Nathan Latka

18:55Congrats. That's great. Last question before we wrap up. What's churn look like? And I imagine you probably measure churn by, you know, if someone decreases the amount of spend through you, it's obviously revenue churn. If they leave you completely, it's full churn. So how would you measure churn?

Churn Metrics: Revenue and Customer Churn

Kean Graham

19:08Yeah, so we have revenue churn and customer churn. Revenue churn, we measure that as the publisher goes down to zero for sixty days, And that is 2.25% per month so far this year. But keep in mind that we had a big one in March, we had 10% churn in March. That one hurt, that kinda increased it. Usually it's close to the 1%. Our customer churn is 1.2% per month so far this year.

Nathan Latka

19:38Got it.

19:39Yeah, so you've got about 20% churn basically on a logo and revenue basis annually.

Famous Five Rapid Fire Questions

Kean Graham

19:46Yep. Something like that.

Nathan Latka

19:46Yeah. Interesting. That's great. Very cool. Let's wrap up here, Kean, with the Famous Five. Number one, favorite business book.

Kean Graham

19:54Never Split the Difference.

Nathan Latka

19:55Number two, is there a CEO you're following or studying?

Kean Graham

19:58Russell Brunson, another bootstrapper.

Nathan Latka

20:01I love that guy. And you're great too. I love I love... There's this flock of entrepreneurs, like, no one really knows about. I'm doing my best to try and get you guys out in the public more so people can realize there's another way to do it. You don't have to be like VC. You don't have to chase a billion dollar valuation. All right. Number three, what's your favorite online tool for building your company?

Kean Graham

20:19Google Drive. We heavily use it, all the different tools, and we apply a lot of automation.

Nathan Latka

20:24Number four, how many hours of sleep are you getting every night?

Kean Graham

20:28Around eight hours.

Nathan Latka

20:29And situation, married, single, kids?

Kean Graham

20:32Newly single.

Nathan Latka

20:33Newly... There you go, guys. Listen up. Newly single. And, Kean, any kids any kids running around or no?

Kean Graham

20:33Nope.

Nathan Latka

20:33Alright. And, how old are you?

Kean Graham

20:43I'm 34.

Nathan Latka

20:4534.

20:46Last question. What do wish you knew when you were 20?

Kean Graham

20:48To hire my CTO about two years earlier than I did.

Nathan Latka

20:53Guys, there you have it. MonetizeMore serving 300 publishers right now as their customers. Those publishers put 3,000,000 in terms of ad spend earned through their platform of which key in it made $400,000 in top line revenue just in June from that. So the company is doing north of call it a 4 or $5,000,000 run rate in terms of revenues, all bootstrap, which you love and highly profitable. He uses profits to go buy other content websites and

21:15run them internally with his growth hacking team. They've got a total team of about 160, 25 engineers that they look to continue to scale at healthy economics, $150 to get a new customer, payback obviously less than a month there. Kean, congrats on the growth. Thanks for taking us to the top.

Kean Graham

21:28Thank you so much.