Nue Media Mix™

Media buyers should be able to spend more time on the activities that create value for their clients, such as negotiating placement and rates, rather than manually collecting and organizing information related to a buy. That’s the premise behind Avenue Right’s web-based media buying software.

Avenue Right founder and CEO Brian Gramer was interviewed by “Media Man” Michael Massey on his Internet radio show Your Ad Here (February 12, 2010). This is the third and final post in a series of excerpts from that interview. You can listen to the full recording of the show here.             

In this excerpt Brian shares a bit of his background and experience in advertising, along with an overview of Avenue Right’s media buying software, the target user for whom the product is designed, and why a “pragmatic approach” to development works in this changing media landscape.

Michael Massey is also author of Your Ad Here: Demystifying the Business of Media and Advertising and an Avenue Right power user.

MM: Welcome to the Friday, February 12, broadcast of Your Ad Here hosted by Media Man, that’s me, Michael Massey. Today’s topic is streamlining the media planning and buying process, and I gotta tell you, anyone that does this can tell you it can be a daunting, frustrating process. Today my guest is Brian Gramer, founder and CEO of marketing technology company Avenue Right. He’s going to share how his company is working to make this process a bit less painful, right Brian?

BG: Correct.

MM: Why don’t we take a couple minutes and sort of explain how you got where you are, what jazzes you, and why Avenue Right.

BG: I got exposed to the advertising business from him when I was 12 years old. My dad brought me to his agency one day, and he said, “We’re going to do some mapping so we can target my clients’ customers and figure out where they’re coming from.”

In the 1980s with advertising, there wasn’t a lot of technology, and my dad’s agency was doing their books by hand. And shortly after that they got their first computer and with it an accounting process.

But he put up a map, which was the state of Minnesota and counties in North Dakota, and took the receipts of his clients and gave me some tacks, and he read of the zip codes from the receipts for where the customers were for his clients. I put the thumbtacks on the board, and that’s how we figured out the geography of where the client’s customers were coming from by looking at where the tacks were.

Then he’d draw up a report by hand and deliver it to the client and say, “Based on where the tacks were, here’s where most of your customers are coming from percentage-wise, and I’m going to break it down county by county. We can continue to build brand awareness and advertise where your customers come from to keep that competitive advantage, and/or we could market in other areas around where your customers come from to try to get other people to visit your retail store.”

But anyway, that was my first exposure, and I’ve been interested in it ever since. So I’ve been for more than 20 years now exposed to the advertising industry and that was my first love.

At the age of 28, I started my first company. It was a niche search engine to help high school kids find colleges, started in 1999. Then I got into the database marketing space and started a marketing automation company called Vtrenz, and after those two ventures, I decided to start Avenue Right.

MM: Tell me who your primary target is. You’ve said media buyers, but can you say more about that?

BG:  Yes. According to the Bureau of Labor Statistics, there are about 30,000 advertising agencies that have 100 employees or less in the United States, and represent about 20% of all media bought in the United States. But the smaller part of the media spend in the US is about $60 million dollars.

Depending on how well the economy is doing and what report you look at, there’s about $300 billion dollars spent on media, annually, in the United States. Most of that media buy is done by the largest brands and largest agencies, okay, and so 80% of it is spent by them, but 20% is spent by these smaller agencies.

MM: Like me.

BG: Right. So that’s who we’re going after. Because most of the products being built are addressing that larger side of the market, and they’ve neglected to provide products that are affordable and pragmatic for small advertising agencies.

MM: You know what, that’s a perfect mission statement right there, Brian. That’s one of the things that turned me on to this particular product.

BG: That’s why I was saying you have to pick what functionality you’re going to build first when you start these things, and so we decided to address the biggest problem first, which is collecting information. But now we have a customization rolling out in a near-term release where you can actually pull in and manage all the different media, even if it’s not in our searchable database. You can add stuff in there and customize it for budgeting and reporting purposes. And so that’s exactly one of the things we’re adding is the ability to do that, based off feedback, and it’s always been on our roadmap. The question was, what priority are we going to give it, and right now it’s a very high priority.

MM: We just got a question so I want to be sure we address it. Why would someone use this sort of product over something like a Strata or a Donovan or a SmartPlus or a Google TV.

BG: I think all those products have their place in the marketplace, and I don’t think they’re going anywhere. Some of them are very, very expensive, so we like to build pragmatic software.

One of the things I would say first off is that in relation to this, some businesses need QuickBooks to run their accounting, and some need programs like Microsoft Dynamics and these huge accounting programs for companies that have multi-national operations in 80 countries and they have 4,000 users using the accounting system, from office admins to controllers to CPAs, right? And with QuickBooks, it’s an office manager that needs to input simple invoices and billings and stuff, which most businesses need QuickBooks, not the big one.

It’s not that these other systems aren’t valuable; it’s just way too much functionality for their needs and way too costly. Some of the products they described, that’s the limitation—it’s way more functionality than a small agency needs, and it’s too costly. That’s going to be the determining factor for the agencies. People don’t need all that functionality in many cases, and they don’t want to pay for if they don’t need it.

Strata is a different product. I don’t even think of them as a competitor. They do a great job, but for a bigger agency that needs all that functionality. And so in many instances small agencies bit the bullet and said this is the only choice I have. I don’t need 80% of the functionality they’re delivering, but I’ll buy it.

The second thing is that they are limited by media type with a lot of the products. The third thing is that many are seller-side solutions and we’re a buyer-side solution. Our whole goal is to make tools to make media buyers more efficient, and we think the sellers will naturally come. So again, we’re making buy- side solutions, not sell-side solutions.

MM: Another question we got is to have you share, in your opinion, what are one or two strengths and one or two weaknesses that you feel are there in Avenue Right.

BG: One of the strengths is that we’re multi-channel, media agnostic, and not involved in the commission process. We don’t have any financial stake between the buyers and the sellers, which allows you to things a little differently, and better.

Another strength is that we look pragmatically and simply at the problem, we try to add the most valuable functionality that solves your biggest problems first. We know it’s not going to solve everything, but I think our pragmatic approach is why people are buying us, even though the system doesn’t do everything already that they wish it would today.

The disadvantage we have is that we’re new, so we’re finishing building our roadmap.

The other disadvantage we have—and this is a disadvantage for everybody—is that the media buying landscape continues to get more complicated. And this is always going to happen in media, so you’ve got to make the system flexible like we’ve talked about so you can customize it and have an open API. But the disadvantage for all of us is there’s always a new type of media. There’s always a new outlets being created. There’s always someone else providing content and trying to make money off advertising, you know. So being fluid.

That constant change is a disadvantage for a software company because you really have to think about how you develop the product in a world of constant change, and if you’ve never done it before, it’s really hard to do. So I think that’s an advantage for us is that we’ve done it before.

Read more from Brian’s interview on Your Ad Here. Check out part 1, Information Collection, Visibility, and the Value of Simplicity in Media Buying, and part 2, Tell the Courier to Fax Me: Adapting to Changing Technology.

Learn more about Avenue Right’s web-based media buying software here.