Snakk Media’s CEO Mark Ryan has his eyes pinned on three different futures – the now, the next, and the future of nascent technologies, as he takes the mobile advertising company on a growth trajectory.
The now is cemented in what Snakk already has in the bag, while the next is focused on developing and testing products over the next three to six months.
The nascent future is pinned on new technologies and data that advertising folks are pursuing as they try to reach consumers using online, smart devices, or screen applications.
“When I took over this job, I made it very clear to the board that I want the company to be living in those three channels – the now, the next and the nascent.
“We want a business that has its focus on these three phases – to have business practice today where we can tick the boxes around what our brands need (now and the future), but also having our eyes fixed firmly on the horizon, or we would have spent six months working on something, turn around and realise the market has turned.”
Mobile apps are the way of the future. Research company Gartner reckons by 2017, mobile apps will be downloaded more than 268 billion times, generating revenue of more than US$77 billion and making apps one of the most popular computing tools for users across the globe.
Globally, mobile advertising spend is expected to reach $41.9 billion by 2017, up from around $18 billion in 2014, and $13.1b in 2013.
Targeting multiple screen users
While mobile apps have taken the world by storm, especially in the world of messaging (think WhatsApp), Snakk is looking at new ways to not only target devices but uncover layers of consumer information.
The company is the brainchild of Derek Handley (now the chairman) and Andrew Jacobs. Handley and his brother Geoffrey set up mobile marketing company,The Hyperfactory, which was acquired by Meredith Corp in 2010.
Snakk is particularly interested in how consumers interact with their multiple devices, and those magic moments which present an opportune time to flash “buy” messages as the consumers interact with their devices.
Snakk spends quite a lot of time researching what the industry calls second screen advertising. “There is research every second week, on the amount of time people spend on their mobile device while they sit watching television, and how they interact with their multiple devices.
“Premium advertisers are still trying to work this out – they are saying, hang on a sec, how can we combine that and reach the gap between the ad and the device. We are doing some work around that which is looking very interesting.”
Snakk is also looking for the other advertising holy grail – to reach perfect synchronicity for ad campaigns that will elicit consumer response to an ad, across multiple devices. This potential customer is on the move, or slobbed in front of the television, Facebooking, texting or Tweeting.
“There is what we call the ‘moment’ – that certain amount of time where advertisers can show the same ad around the same time — to synchronise that the best you can. We are doing a bit of work around that. It sounds like something pretty straight forward, but it is an extremely difficult thing to do.”
Tracking meaningful conversations
The other on-going project Snakk is pursuing is figuring out how to apply the school of data analytics with social behavioural science.
“The other thing which we can feed into that (finding the moment) is how we monitor socially, what people are talking about, and understanding what the online conversation is doing. We then advertise against what’s happening socially so that you are not just feeding data against something happening on TV,” he says.
This sits in the realm of ontology development, defined as a knowledge-based system that builds semantics for vocabularies, catalogues and, glossaries.
This information is then used to build relationships between those different entities. It is a knowledge system that marries different disciplines, including data analytics, computer science, geographic information systems and artificial intelligence.
“It is a kind of big data, it allows you to develop a social schema, a map of the conversation…It is more than sentiment, it makes sentiment looks very simple. We have some ex-Facebook engineers we are collaborating with on that.”
Snakk is a startup which has taken the opportunity to invest in other startups. Its two investments are San Francisco-based Moasis Global and New York-based Plyfe – both offer different platforms to tap into consumer spend.
Snakk came across Moasis in the course of looking at technologies available in geo targeting (where ads are targeted based on where the consumer is located).
“Rather than just trying to be their supplier, we went to them, told them we really like their technology and would like to invest in them.”
Moasis has patented technology, SmartGrid™, which helps brands identify consumers at the grid levels (as opposed to circles of information which has overlaps), allowing them to turn on campaigns on the street level based on where the consumers are. The company’s marketing material claims this platform can help increase post-click conversions at 5 to 10 times industry norms.
For example, a customer could be heading close to a McDonalds outlet. The geo target technology, recognising this, would push advertising to the mobile user.
The technology would also recognise when a consumer located near McDonald’s competitor, and push McDonald’s offers or discounts to the consumer, Ryan explains.
Ryan says the investment has already paid off: “As it turned out, Moasis has since done a few more fund raising rounds and Snakk has already made money off the initial investment.”
Plyfe, which is a New York based startup supplying cloud-based advertising technology, provides advertisers with fun games and tools to run campaigns within an advertising unit.
Using Plyfe’s tools, advertisers will be able to offer rich media content to work on “what happens after the banner”, Ryan says.
Snakk’s plan to tap more funds using an Australian stock exchange listing is still on track, Ryan says.
There is still just over $6 million in the bank for him to juggle the company’s cash needs, he says.
Asia: Hastening gently
But as Snakk seeks to ramp up growth, particularly in the vibrant Southeast Asian (SE) markets, more serious money will be needed.
SE Asia has over 124 million active social mobile users with 75% mobile apps running on Android-based phones.
He is mindful however of the need to stay lean, and tackle the market a bit at a time.
“Hastening gently,” that’s what he likes to call the approach, preferring to focus on getting the operations right rather than going for the “land grab”.
The company raised $6.5 million in 2013 through a private placement and share purchase plan for eligible investors. It is now listed on New Zealand’s alternative market.
Snakk has set up its first Asian office in Singapore, a regional advertising hub and a bridge into the wider South East Asian market. Other interesting markets are Indonesia, and potentially Hong Kong, Ryan says, and maybe China at some stage.
As with most startups, Snakk is still burning money faster than it is generating it. For the 2014/2013 financial year, the company’s revenue was $7.05 million (2012: $3.65 million) while its total expense was $5.07 million ($3.12 million). Loss per share rose to 74c from 64c a year ago.
Snakk is the brainchild of Derek Handley and Andrew Jacobs. Handley and his brother Geoffrey set up mobile marketing company,The Hyperfactory, which was acquired by Meredith Corp in 2010.
The company had its annual general meeting on Sep 16 (today). It will also be singled out by B Corp as a company to have reached the top 10% of all certified B Corp members for its impact on workers, community and the environment. B Corp is a not-for-profit organisation working with over 1000 certified companies across 30 countries to redefine success.