The Steelberg brothers have had an incredible string of success with startups in the advertising industry dating back to 1995. Combined, Ryan and Chad Steelberg have raised more than $150 million in funding and managed more than 400 employees, while creating billions in shareholder value through acquisitions and mergers.
Brand Affinity Technologies, their latest endeavor, puts their solid backgrounds in the online advertising space up against the world of sports and celebrity. BAT offers a technology platform that lets advertisers -- large and small -- include athlete and celebrity talent in their campaigns.
By leveraging endorsement marketing in an easy-to-use platform online, BAT hopes more marketers and their clients will make use of the opportunity. iMedia Connection spoke with Ryan Steelberg, CEO of Brand Affinity Technologies, to learn more about the growing business and where it might fit in for digital marketers who haven't dug their heels into endorsement marketing thus far.
iMedia Connection: What keeps your entrepreneurial spirit alive and kicking after so many successful startups and exits?
Ryan Steelberg: For me, the thrill comes from applying technology to business in new and interesting ways. The companies my brother Chad and I have created (dMarc, 2CAN Media, AdForce, and now BAT) have all been built on the concept of introducing automation and efficiencies to the business of advertising. We're interested in using technology to reinvent the business models that govern advertising -- not just to make existing processes faster and easier.
iMedia: After going through the boom and crash of 2000-2001, what do you think is different about this recession? Are there any lessons you learned previously that can be applied, or has the entire game changed?
Steelberg: Survival and success ultimately comes down to managing cash wisely. As a startup, you need to stay focused on those things that take you further along your path to profitability, and know when to say "no." Particularly in tough economic times, it is tempting to chase down every revenue opportunity indiscriminately. Knowing that you do not have the resources or financial bandwidth to tackle everything, you have to make the tough choices, and be sure to choose wisely. The margin for error in this market is as close to zero as it has ever been.
Aside from the temptation of going "off plan," the other common pitfall is for recession-spawned fear to squash good ideas. Businesses in these economic downturns often fall victim to crippling aversion to risk where a gut instinct to "stay the course" overrides smart ideas. Innovation doesn't have to be expensive, and may present the best opportunity to secure competitive advantage in a high-stakes economic environment. In an ideal scenario, innovation provides an edge for managing cash effectively.
I see this "innovation vs. fear" dynamic at play in the advertising industry. Advertisers and agencies are under pressure to increase the impact of diminished budgets; however, many are also reluctant to change what they're doing "until the economy stabilizes." You can't have it both ways.
There are companies seizing this moment to take advantage of cost-effective and strategic innovation. One example: A case study recently presented at an Advertising Research Foundation conference detailed the results of a large CPG company's $1 million ad campaign, which ran on a popular social networking site and included interactive elements -- a major departure from the company's typical ad strategy. The campaign netted $1.28 million in near-term in-store sales, and is a great example of an unlikely innovator taking a perceived risk that paid off in a way that can be measured, adjusted, and replicated.
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