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When you’re a big marketer spending a lot of money across multiple media channels, it’s hard to tell which advertising efforts are driving business. The TV commercial, the online banner or the beside-the-freeway billboard: what is really bringing you customers?
For a long time the only way of making these determinations about complex mixed media spending was done with consultants. Twice a year on a contract basis, “you’d give them your Excel sheets and wait for them to make recommendations,” Convertro CEO Jeff Zwelling said. The process was slow, laborious and expensive.
There had to be a better way. While working at YLighting, his former e-commerce business for lighting, Zwelling ran into this problem and began thinking about it in a different way. “I want to know mathematically what’s working and what’s not,” Zwelling said.
For Zwelling, a mathematical approach clearly meant software. And as he sold YLighting and began working on this new venture, it also meant a unique approach to building a company. Rather than building another mixed media consultancy with a long payroll, Zwelling said he preferred to build a company that was “super heavy on automation and light on people.”
“I’m much more interested in these money machines,” Zwelling said of hyper-efficient and software-centered companies.
Zwelling’s newest company, Convertro, is just that: a marketing attribution SaaS platform for marketing executives. Convertro tracks the impact of advertising across multiple platforms and automatically recommends how to shuffle advertising dollars to improve marketing return on investment.
With Convertro’s software “we are able to say this is the most productive ROI and this is the least productive ROI,” Zwelling said. And that is powerful because it gives marketing executives day-to-day control over their advertising activities that they did not have before.
“All our clients have spending recommendations recalculated by the close of business the night before,” Zwelling said.
What makes it especially interesting is that, “Convertro has discovered the value of tracking consumers through all marketing not just last touch,” Zwelling said. Typical online advertising provides information on the last click of a consumer; Converto’s Customer Path Attribution follows the consumer through the whole process, from product discovery to purchase. The software’s reach is so wide that it tracks 300 million people in the US and 700 million people worldwide by following the results of online and offline advertising channels including pay per click, SEO, display, affiliate, TV, radio and direct mail.
The software is also much cheaper than the old method of hiring consultants: According to Zwelling, consultants typically costs about $1 million per year compared to $120,000 for Convertro. That cost gap is a key part of the company’s strategy.
“If you intentionally come at the market with this incredibly low price, you force the organization to scale with all these clients,” Zwelling said. In Zwelling’s opinion setting Convertro’s prices higher might give the company an excuse to hire additional employees, thus taking its focus off growth. When the price is set lower “the company becomes an expert at renewing,” Zwelling said.
This low-price strategy has caused significant growth since Convertro’s launch in 2009. The company now serves a growing number of customers including Dollar Shave Club, Bonobos and 1-800-FLOWERS.COM.
“2012 was the year of education,” because the idea of marketing attribution software was still new, Zwelling said, while “2013 was the year of consideration,” because marketers were confident enough to start buying. Given industry trends, Zwelling said 2014 will likely be even better: “last year was unbelievable and I expect next year even more so.”
