When CEO Nada Stirratt took over at Verve 18 months ago, it seemed that mobile ad tech was on the cusp of really breaking out — with more and more brands and marketers understanding the importance of the new technology and backing that commitment up with serious budgets. As mobile has risen, the importance of location data has grown apace, and has become a vital asset in the marketer’s toolkit.
Verve, which has built a business around location-based mobile marketing, announced in June that it was girding for the next value — taking in $30 million in debt financing from Silicon Alley Bank with plans to expand into Europe and and make a few strategic acquisitions.
Stirratt, who will be a speaker at October’s Street Fight Summit in New York, recently caught up with us to talk about how brands are coming to understand location as a part of their mix, why high-quality location data is so vital for marketers, and where the “white space” is in local tech.
Tell me a little about where Verve is at these days and what your focus is on.
Over the past 18 months … because the industry is morphing, the business has shifted a little bit.
On the one hand with our managed services businesses, which is working with mostly Fortune 500s, we serve their ad across anywhere from 25 to 30 thousand different premium content apps.
In the past, the story would have been: somebody is walking past Starbucks, they get an ad on their device, they go into a store, and they transact. Because the way that consumers use their phones and what apps they’re on and what they’re doing on the behavior side of that, that’s less now the story.
The story instead is very much about location data, and really precise location data becomes such a strong indicator of who an individual is that it lets Verve and our algorithm and our expertise determine the optimal time to serve the optimal creative for a response.
Does that require a lot of hands-on envisioning for each campaign?
No. The entire business is based on that being automated. Part of it is that we have a very rich points-of-interest library because we had been doing it (and, quite frankly, doing it manually) for 10 years. So while the points of interests are logged, for every single campaign we have the ability through a whole bunch of sources and services to continually update and verify points of interest location. So getting that right is mission-critical and that is ongoing. We’ve got a ton of IP around that and it’s very core to our business.
And now we’re also able to use device IDs and our Roximity acquisition to further validate the accuracy of points-of-interest. We then also take that information and tie it to a home. So we have a really strong home-association IP, which then allows us to know who these people are. All of that is part of our platform.
How do you think location tech is progressing, more generally? Do you feel like companies are getting closer to solving the big problems?
I think there’s a huge amount of white space. That’s proving out certainly over the past year. Every marketer that we speak with now gets it. Up until now, people like myself who’ve been in the digital space since the ’90s — our behavior is so different than the rest of the universe; we buy stuff on Amazon, and Amazon Prime delivers everything from toilet paper to dishwashing detergent.
But the fact is that anywhere from 93 to 96 percent of all commerce — if you can believe whichever one of those numbers — is conducted in the real world. When you talk to some of our biggest partners, which are all the major CPGs and retailers they always say: “This is exactly what we’ve been saying. We’re sick of all the digital people coming in and saying it’s all about e-commerce.”
So knowing that — and even when that drops to 90 percent, it won’t drop to 90 percent for another five, six, seven years — you really have to understand location. The mobile device coming onboard gave everybody a false sense of security that “because I have some kind of location capability then that location of course is accurate. If I target to nothing but location I’m going to be wildly successful.”
The elimination of uncertainty of a location signal is a non-trivial problem to solve and we have put a ton of muscle behind it and we have a lot of data scientists to solve for that because it’s really a critical foundation for any kind of mobile targeting. If you’re not giving any kind of mobile targeting with respect to location and location precision you start to miss a really, really big differentiator. …
The second thing is what is that creative experience? You’ve got this data that you know what you need to do and who you need to reach and then boy, oh boy, there is a ton of white space in this industry and what that creative experience is. Because it isn’t a native ad on a scroll of Facebook, and it’s certainly not a pop-up or interruptive type of banner. Everybody’s talked about it. All of our research has validated it.
We went so far as to create a group called Verve Foundry. My second new hire when I got here, Walter Geer, who had worked for me at MTV and at MySpace. He’s an engineer and when we were at MTV he filed four different patents on unique video delivery across websites. Now in a short period of time he’s already filed two patents on unique delivery that draws from both location and consumer experience to really reimagine how marketers can reach consumers on this device. So those are the two big white spaces that we feel we have a very big advantage and we’re spending a lot of muscle on.
Do you think that marketers, particularly from brands or retailers, are getting more savvy about location data?
I do. Everybody uses that Starbucks example [above]. All marketers initially equated location advertising with direct response. For the a couple of years that’s all anybody did was say “I want to immediately send somebody to McDonald’s to buy a burger. I don’t care if they’re in the middle of a funeral parlor.” I feel like marketers are now getting far more sophisticated. …
We did something with [a major motion picture studio]. They had a faith-based movie coming out. It was going to be really hard to target faith-based people because it’s a very under-reported or over-reported statistic. So what we did is we geofenced and targeted places of worship and we tracked devices over a period of time on Sundays during the hours of nine and one. We started to see some habitual behavior between those hours. It became a faith-based population, and we then used that for segmenting and targeting. And now they have this really great population on which to build a relationship for future, and that particular movie, that’s faith-based. That’s how they’re using location.
So are there a lot of things like that where you have to lay the groundwork way in advance and build audiences based on locations for future uses like that?
Yes. A lot of other people have to do a lot more work there than we do, given that this has been the only business we’ve been in for 10 years. We’re very good at being able to lay that groundwork in near-real-time. The other thing is because of our app ecosystem that we have and our publisher relationships that we have, we see 198 million devices a month. That’s not 100 percent of everybody but that’s a lot of people. Those are devices that are in our database and we have a lot of information on those devices. …
There’s a lot of noise and there’s a lot of really bad, crummy data. We’ve done experiments in the past where we tried to get device IDs and location data from the exchanges. When we see that of every 100 impressions that we pull from an exchange, 30 have location data that is accurate. So we immediately have to eliminate 70 and of those 30, 10 are devices that are valid devices. That’s a big differentiator for us.
David Hirschman is a co-founder of Street Fight. This interview has been edited for length and clarity.
Hear more from Verve’s Nada Stirratt at Street Fight Summit on October 25th in New York. Click here for tickets and more info!