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AdStage Invites Clients to Build Their Own Algorithms

2014-13-August-equations.jpgIn a market where the best known advertising platforms focus on high-end customers, a growing San Francisco startup is aiming for the masses.

AdStage today introduced a simple tool that allows its 1,000 beta customers to build their own algorithms for placing ads across the four networks it currently serves: Google AdWords, LinkedIn Ads, Facebook and Bing Ads.

The company's 11 engineers tried to find the right algorithm themselves, but quickly discovered that normalizing the code for such diverse networks tended to make the result less efficient. So AdStage designed a relatively simple interface called Automated Rules that lets its clients design the algorithm that suits their needs.

Looking for Patterns

"We'll see if it works. Maybe we will see patterns," Founder-CEO Sahil Jain told CMSWire in an interview. "Maybe there will be a certain rule that all these companies are building. Then we can make that the default rule."

Jain thinks the new tool will be popular with advertisers on the four networks he supports because, he said, LinkedIn and Bing currently have no such tools, and Facebook offers only a few. Google has advanced tools, but they require rather sophisticated scripting skills, he said.

The concept has its supporters. The company also announced today it has received $6.25 million in Series A funding that includes Verizon Ventures, Digital Garage, Newbury Ventures, Freestyle Capital and Bay Partners. The company previously raised $2.53 million from Freestyle Capital, Quest VP and others.

More than 10,000 businesses applied for the AdStage beta, but AdStage accepted only about 1,000 customers who together have generated more than 100,000 active campaigns.

"We want to build a business where tens of thousands of advertisers are using it each month," said Jain. "Our goal is to give a product to the masses."

Jain said he saw the clear need for a user-friendly ad platform in his last job. Still he said he had a hard time differentiating it from other campaign automation systems when he started out.

"This was a big problem that we struggled with when we made VC pitches," he said. "They'd say, 'It sounds like everything else I hear about.' There are thousands of these companies."

2014-13-August-AdStage Dashboard.jpg

 The global dashboard for advertisers on AdStage.

Smaller, Cheaper

Now Jain sets AdStage apart from the "big, bulky enterprise tools" used mostly by Fortune 500 companies. "Kenshoo and Marin are phenomenal companies," he adds quickly. "They have good products. We're not saying we have more features than them."

But the larger competitors also charge much more. AdStage offers a 14-day free trial that automatically converts into a SaaS subscription at a cost of $99 a month. That has attracted both smaller companies and some slightly larger companies like New Relic, Zenefits and CoTap.

Jeremy Bromwell, the marketing director for Zenefits, said AdStage "helps us integrate powerful native ad types at scale while simplifying our campaign management and optimization processes."

Another thing that separates AdStage from other companies is that it doesn't manage campaigns. Jain said it's tempting, but that would turn it an agency with narrower margins than he sees as a pure-play technology vendor. "A lot of the ad technology companies are really agencies masquerading as ad technology," he said dismissively.

Education Over Apps

Jain said the company has made it a priority to educate its users rather than adding services that are already available through third-party vendors. "If we can just teach and educate our users how to become better advertisers, that's going to produce far more campaign lists than arbitrary optimization app," he said.

"We realized we could build the tools ourselves," he said. "But we also realized there are a lot of amazing apps out there like ShutterStock, Getty and Optimizely. We said let's just integrate them into the AdStage platform."

Looking to the future, Jain recognizes there is  always a chance that another startup will come along with better products at an even lower price, but his attitude  is "more power to them." 

For AdStage, he plans to keep adding new features that could eventually lead to higher prices.  "I have no problem with charging a premium," he said. 

 
 
 
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