Online ads with the click of a mouse

It's a common cliché that holds the younger generation is quicker to pick up on and use new technology trends, compared with older generations that are slower to jump on new ways of disseminating information and communicating businesses and services. It certainly seems to be the case with Adexpres.com, a company not yet a year old that was founded by a 2008 university graduate, Jan Golgonek. His idea has been to make advertising online so easy it's almost on par with online shopping, taking out most of the middleman's duties and passing on the savings to clients. Galgonek sat down with The Prague Post to talk about his fledgling business, and how Adexpres.com has to also educate potential clients on just how to take advantage of its services.

The Prague Post: You seem to have gotten a head start on setting up your own business. Is the online advertising business something you'd been intent on for a while?

Jan Galgonek: In fact, no. I studied finance and economics at university and, after that, worked at a consulting firm for two years, specializing mainly in cross-border mergers and acquisitions. We had a lot of opportunities to work on projects that were in the area of online business. I was able to find out how these sites generate business, and I started to be interested in the field of online media services. I did research on business models in the United States, where there are more online advertising businesses similar to Adexpres operating than there are in Western Europe. There's a different market for online services in the United States. There's a broader amount of sites, and I think people are much more educated on how to do self-service Internet advertising. I knew how classic media agencies worked, but I wanted to be able to use technology to get together all the needed services - selling ads, media planning, invoices - in one place. As it turned out, many clients still wanted us to help them come up with a media plan and administrate it, so we had to split our services into two offers: self-service and full clients.

TPP: How does the self-service side work exactly?

JG: It's divided into two sides. There's a service for advertisers, and there's a service for the publishers, or us, the site owners. For publishers, the whole process might only take five minutes. On the other hand, it's more comprehensive for advertisers, but they're still able to do the whole process right there on the website. You don't have to send an e-mail or pick up the phone. You can pick out which sites you want to advertise on, design a campaign length, upload a banner and pay online. That generates an ad that's sent to publishers that shows them the banner so they can approve it, in case it's competition or something they don't want to display. They can also negotiate terms such as prices or different timing. Both sides are also able to look at all the associated data, the metrics of the campaign; it's all generated there on the website.

TPP: You claim that Adexpres.com takes up less of an advertiser's marketing budget than traditional agencies, so more of the client's money goes toward the actual ads. How do you manage that?

JG: Generally, the business works this way: A media agency will get a commission from the client who's advertising on the websites. But the media agency is also approaching websites with lots of clients, so the agencies are getting further discounts. The media agencies don't have to pass on those discounts to the original client; they can keep them for themselves as a back-end bonus. Our model is different; we're very transparent about our rates and commissions. If we get any sort of bonus or discount, we take it in the form of impressions or extra time for the ad banners on the site. In that way, the client gets more ads and ad time for their money. We only have one fee, for the original commission, and that maxes out at 25 percent of the client's budget, whereas that number can rise up to 50 percent when all is said and done with traditional media agencies. It helps because we have our own technology and also our staff is much smaller. Since a lot of it is user-friendly and accessible to the clients, we don't have to have one person assigned to each client.

TPP: You started in December 2009. How have the first eight months been?

JG: We did a press release in December and thought we were going to start slow with smaller companies. But we found there was a big demand from bigger clients to do a full service for them in terms of preparing an entire media plan, rather than entering themselves on Adexpres.cz. In January, we decided to split into two, with the self-service site and the full media service. Now we generate about 95 percent of our sales from the full media service, and we have about 20 small to mid-size enterprises that are running their own campaigns via the website. What we want to work on now is ways we can educate customers on how they can easily use the self-service website.

We're building an education program to invite more SMEs to the service. One way we're doing that is cooperating with the SME Union to run seminars and workshops. We want to show them how effective it can be, and how they can decide on their own what's best, and they can run it for themselves. It's a much cheaper option for them.

TPP: How is the online advertising industry right now? Has it been affected by the downturn?

JG: The impact has been that companies do not necessarily want to reduce their budgets for online advertising, but rather they want their campaigns to be more cost effective. For us, that's been a good turn of events, because I believe we're offering a service that can cost less but still be as effective. We offer a more practical solution not just in terms of cost, but also impact. We help them handpick sites that will target their customers more. That means not just putting ads on the biggest sites, but maybe smaller ones that will generate more conversion from site users to clients.

TPP: Were you nervous starting a business at a time when the economy wasn't doing well?

JG: We had an idea that we really believed in. We did a great amount of research and spent a long time putting together the technology - nearly a year. It has really taken off. At first, the larger agencies saw us as someone to cooperate with, but once they realized we were pulling in big clients, they realized we were in fact the competition.

Cillian O'Donoghue can be reached at
codonoghue@praguepost.com