We moved away from arbitrage and media markup models early on, instead offering direct-to-publisher media buying alongside transparency into cost data and the minute-by-minute decisioning logic of our algorithms. We then moved to focus on building technology, algorithms and tools to help customers drive real business goals on social, like purchases and lifetime ROI – and at a time when the majority of the marketing world saw social as only a place for engagement.
In continuing our commitment to doing what’s best for the advertiser, we’re excited to announce a sharpened focus on Software-as-a-Service (SaaS), offering world-class ad automation technology and tools for the in-house advertiser. As part of this, we will no longer be accepting any new managed services business.
Why are we sharpening our focus on SaaS for the in-house advertiser?
After 4 years, hundreds of millions in social and mobile ad spend learnings, and hundreds of the world’s largest and savviest performance advertisers as customers, we know the very best results come from:
- Skilled operators,
- Employed in-house by the advertiser,
- Leveraging the best advertising technology.
We believe in the in-house advertiser. We believe in their ability to better understand and reach their customers than a third-party when armed with the right advertising technology — and especially with a skilled operator at the helm of that technology.
We are focusing all our resources on arming in-house marketing teams in ecommerce, gaming and other pure-play internet businesses with world-class ad automation software, and ensuring they have the support and resources necessary to take advantage of all that technology has to offer.
Our founder and CEO Ric Calvillo announced this sharpened strategic focus in an interview with AdExchanger’s managing editor Zach Rodgers. Excerpts from the article and interview are below:
Changes are afoot at Nanigans, as the Facebook ad partner repositions to serve in-house marketers strictly on a software subscription basis. The company has stopped signing new managed services business and will focus on getting its self-serve platform into the hands of marketers in the ecommerce and app verticals.
AdExchanger: What are you up to with the shift to SaaS?
Heretofore we’ve been all Facebook and all of our revenue is purely software and services fees. We don’t mark up the media. All of our clients pay the publisher directly.
That transition was somewhat difficult in that certain types of clients wanted us to take the media. It’s usually agency and brand partners that for whatever reason didn’t want to pay Facebook directly. With agencies, sometimes they want longer credit terms and they wanted us to be accountable potentially for the liability of the media.
But even after getting out of the media reselling or distribution business, which is not unlike an ad network or media buying agency (most of our competitors among PMDs resell media, and most of the DSPs fulfill media) we still were conflicted with two different businesses in different markets. And I decided in Q1 that we needed to pick one to be successful. The two businesses are selling traffic for Facebook, and selling software to enable the client to do their own campaign management and optimization.
Are we doing campaign management as a managed service and selling traffic to the client? Or are we selling software the client uses and taking at least some responsibility for the performance of their campaigns.
Selling traffic would be an I/O-based business?
Right. We’ll try you for a quarter and if it performs, we’ll stay with you.
Business was great last year. But what percentage of it was clients buying traffic and what percentage was clients buying software? It’s not black and white. Some clients are using some of the software – say reporting and analytics – but not pushing ads.
For me, it is pretty binary. There’s a litmus test: Mr. Advertiser, are you taking some responsibility for the performance of the campaign? And better yet, are you willing to sign a one-year contract where you pay us for use of the software independently of how much you spend on ads and independently of the performance of the campaign?
Is the Facebook platform in your future?
Our future is industry-focused. I’d like to consider us a vertically specific, more self-service version of the DSP. Where Turn and MediaMath and Invite [DoubleClick Bid Manager] are very horizontal and will sell to brands, agencies and performance advertisers, we want to focus on ecommerce and app developers and sell them a platform. And whatever sources of inventory are working with them, we want to support. We’re committed to Facebook and RTB.
The biggest disruption happening in ad tech is not necessarily RTB but the direct-to-publisher client relationship that Facebook and Google have created to the tune of – we estimate – $20 billion. They’ve taken 20% of the online media spend and offered a Web-based platform that SMBs can come to directly, and of the remaining non-SMB enterprise, they’re going to push we estimate a third of them to manage in-house with no middle men – no media agency, no ad network, no DSP.
If you look at Facebook this year, they’re on a $10 billion revenue run rate in Q1. We think half of that is SMB and a third of the remaining half is in-house managed. We’re going after that third non-SMB, that $1.5 billion that is in–house managed for which we think they need a better platform.Read the full interview on AdExchanger