8+1 principles that guide Lexity (aka, why we are the way we are)

We founded Lexity two years ago to build a different kind of an advertising/marketing company. While we’ve iterated our product, tried different pricing models, and watched experiments become full-fledged products in their own right – the core principles underlying Lexity haven’t changed.

We’re a fat startup – not measured by dollars in the bank (though we have a few), but by the grandness of the ambition, rigorous thought process, and relentless progress towards a clearly articulated goal. We believe that fundamental disruption in an industry as huge and well-established as advertising can’t come from feature companies (Dave McClure be damned).

In this post, I lay down some of our guiding principles – not only what we do, but as importantly, what we don’t do. All out in the open – for your feedback!

The complete list

  1. Small retailers first
  2. eCommerce first
  3. Simple, simple, simple
  4. Fair, affordable, upfront pricing
  5. Full transparency on ROI – and in real time
  6. Complete solutions for every ad channel
  7. Customized multi-channel marketing
  8. Relentless automation
  9. Bonus: Global ground-up

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DSPs are a lie. (should be dSPs)

I don’t get it. DSPs are demand-side platforms… but only demand of the Display kind. And only the Display of the non-Facebook kind. And the non-guaranteed kind. And only the remnant that’s allowed to flow through to the networks by the SSPs…

Are you a DSP? Really?

So it’s basically DSPs for small values of D?

In reality, it’s kind of silly for a fledgling industry like ours to have such fragmentation of terminology already.

Who’s building a DSP for real? That is, a platform that aggregates and optimizes demand of different kinds of media, and optimizes across all of them?

(Lexity is, but only for small businesses – who’s doing it for the big guys?)

Amit

It’s time for the iOS of Advertising

The inimitable Terence Kawaja tweeted many months back – ‘We need an Operating System for Advertising‘. I believe this is true – but we need to go further – what we need is an iOS of Advertising.

This post isn't really about iAd.

But first, let’s talk about the OS. From a capability perspective, the various media channels have started opening APIs methodically. Old ones have added APIs, and new ones are starting off building APIs even before they’ve built UIs (see: Twitter), and this is a good sign indeed.

A platform layer could be built that takes these APIs, as well as APIs from other components of the ecosystem (like the data providers), and provide a generalized, unifying platform, an Operating System, if you will, on which Ad Applications can be written.

The Geek in me loves this! It would be so awesome.

Typically, when the Geek in me loves something greatly, it’s a sure sign that the Non-Geek in me will not. Greatly.

I believe we should not be solving the problem of bringing disparate marketing channels, data providers and ecosystems into one seamless whole for someone to optimize over.

Instead, we should start from scratch, and sit down with our clients – the marketers. Read the classic Advertising tomes. What are they trying to achieve? How do they go about analyzing their market segments, their potential customers, to get insights on how to sell to them? What have their instincts taught them in the years of working with end-customers and businesses?

In other words, we need to insert a little bit of iOS into our thinking. What’s the marketing problem we’re trying to solve? Is it important that it require Hadoop? Or Machine Learning? Does it really matter that the bidding is Real-Time? Or that APIs need to exist?

Or what we really need is drastically simpler, user-friendly tools for marketers to think in human terms, manage marketing in non-technical ways, get insights that are human-readable and actionable by humans.

Steve Jobs’ magic is in making technology Human. The iPad works because it’s Human, not because it’s High-Tech.

The (still-fledgling) Ad Tech industry hasn’t yet learned this lesson, I’m afraid.

I’m wishing for an iOS for Ad Tech, not the OS.

Amit

The Customer Acquisition Gap in Small Business eCommerce

Image representing eBay as depicted in CrunchBase

We work with a lot of merchants that set up shop on the many excellent store platforms – Shopify, eBay ProStores, Yahoo! Stores, BigCommerce, Magento and many more.

A very familiar pattern we see is that merchants will set up their shop on the platform, and expect traffic to somehow materialize suddenly and automatically.

In some sense, we, the Internet Guys, are to blame for this. Somehow, somewhere, we missed building the right connections between eCommerce Platforms and Marketing Platforms.

As a result, there is a clear and present Catch-22 for small businesses. In order for them to market their products, they have to first set their products up on an eCommerce platform; which don’t integrate marketing tightly within their systems, if at all.

On the other hand, in order for merchants to set up their products within a platform, they have to first figure out what kind of marketing would make sense for them in the future – so they can choose the right eCommerce platform to begin with!

What a conundrum! Perhaps we need a standardized set of marketing tools and services that are universally available, or compatible with, all eCommerce platforms. Or, perhaps we need an eCommerce platform that can hook up to marketing vendors seamlessly.

Is eBay X.commerce going to be that platform?

Amit

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Retargeting companies should go out of business (but won’t)

Last year, I predicted the sudden and precipitous collapse of retargeting vendors like FetchBack, Retargeter and AdRoll. Given they’re all still around and doing well, it does seem like I was wrong. Fortunately, I never claimed this in print, so no one can make fun of me for the outrageously wrong prediction.

Oh wait… oops!

My reasoning was simple – Google launched a Retargeting solution 18 months ago. Of course, they don’t call it Retargeting; they call it Remarketing: because the Product Naming Committee needs to justify their paychecks, even at Google. It could be that they didn’t like the word ‘targeting’, preferring the more innocuous-sounding word ‘marketing’ – but the fact remains, Google has made the dark art of retargeting accessible to all advertisers – no intermediaries required.

What’s more, Google’s solution offers you all the flexibility you could ever need. Just follow their instructions, and you can show retargeting ads to the only 200 visitors that saw Product A, and did not see Product B, but did not put Product C into the shopping cart, and did not end up buy anything. In fact, you can even choose to show a different ad to the 20 of these 200 people if they happen to be visiting a sports blog, but a different one to the 50 that specifically went to a specific sports blog, say ESPN Sports Center blog.

I’m not even kidding!

Of course, it took our engineering team, who knows this sh** inside out, a couple of months to finally get the system to work. Now that we’ve figured it out, it works beautifully! But we don’t believe there are too many other people who could figure this one out, and make it work, without a lot of expert help.

And so, retargeting companies, you’ll survive. Until Google really decides it needs to simplify their UI, processes, documentation, and fix the many bugs in the system.

I wouldn’t hold my breath on that one.

Or, hold your breath at least until Vurve decides to come after you! (Kidding, kidding, we’re only helping small businesses right now!)

Amit

eCommerce Advertising is in the dark ages (but you knew that)

Both eCommerce and Advertising have grown fairly rapidly in the last 15 years – that’s the good news. The bad news is that they’ve grown somewhat independently.

Only the larger eCommerce merchants have had the wherewithals to stay on top of both of these trends. And so it goes:

   The rain falls the same/on the rich and the poor fella
   But the rich man’s got the poor man’s umbrella.

Small eCommerce businesses are getting clobbered, but the tools for their survival are all hiding in plain sight! The problem – these tools were built by engineers, for engineers. You need a formidable engineering team just to do the most basic of marketing!

Here’s a quick example from Vurve. It would take 45 minutes to set up a small business with accounts on Google Adwords, Google Analytics, Google Webmaster Central and Google Merchant Center. If you know exactly what you’re doing. And if you make zero mistakes. And if none of the Google services is down.

Why would you need to do this? Because all of this setup is required to enable Google Product Extensions. Which is supposed to be a great ‘free’ feature for all users – except only the biggest eCommerce retailers seem to be using it.

Now multiply this for every feature the big eCommerce merchants use, across the many ad platforms – Google, Bing, Yahoo!, Facebook, Twitter, to name a few – and you realize why no small business ecommerce merchant will ever be able to compete in a fair fight with Wal*Mart, say, that can drop $500 million just to hire some engineers!

Well, not without a little help from Vurve, anyway 🙂

Amit

Technologists hate Marketers, but they’re wrong (and Steve Jobs got it right)

Virtually every Ad Technology CEO I know is conspiring to kill off the marketers. That means the Ad Agency execs. The Media Planners. The Inhouse Marketers. All fair game. They should all lose their jobs and hand over the reins to the Technologists. After all, which of them went to MIT? Certainly not those guys!

Why? The conventional wisdom down Silicon Valley and Silicon Alley seems to be that the traditional marketing roles that revolve around ‘Strategy Development’, ‘Media Planning’, ‘Creative Direction’ etc are antiquated, and they should be simply replaced by DSP technology, Yield Management, Dynamic Creative Optimization technology, and so on.

Truth be told, no amount of technology can generate profits from nothing. Technology is a tool that humans can use to make magic happen – but it’s still just a tool!

It will always be a human, a ‘marketer’, who will absorb everything there is to know about a business, and formulate the strategy to attract the right customer. This marketer could be the owner of the business, or the in-house marketer, or those ‘agency guys’ – but the strategic imperative will always lie in the hands of a human being.

What we, the technologists, need to do, is to bridge this ridiculous, unhelpful divide, by making this technology accessible to the marketers, instead of trying to replace them. Hide all the complexity we’ve introduced to advertising in the last 10 years, and go back to the basics of solving the core customer acquisition and retention problems.

See, the genius of iPad, Steve Jobs’ beautiful creation, is not that it screams technology – but that the technology barely registers; all you remember is the beauty, the utility, the function.

And so it should with the product you’re building. Did you help Mark advertise the Evolux bulb to only the 20 people that spent time looking it over, but left before buying – or were you too busy selling your hyper-targeted retargeting solution with automated creative optimization and data feed integration instead?

Amit