Digital ad agency on growth path raises funds

BOULDER — Like many web hounds, Boulder investor and advertising legend Alex Bogusky often found himself frustrated by the ads on his favorite media websites. But it wasn’t the presence of the ads themselves that troubled him (he worked for an advertising agency for 21 years) but rather the advertisers, which were almost exclusively worldwide brands.

“Why is it that I get served eight Chevy truck ads in a row by CNN.com when I’m not in the market for a truck but never see an ad for something I might actually care about like a coffee shop in Boulder?” he wondered.

Though he didn’t know it yet, Bogusky had stumbled upon a giant hole in digital and programmatic advertising, arguably the most important communications channel of the modern era. (More than $32 billion was spent on digital advertising spends during the first half of 2016.)

As it turned out, only major brands with significant budgets could afford to access ad space on global publishers such as the CNN and The New York Times websites, while smaller ones were relegated to remnant inventory on properties such as YouTube and Facebook.

Bogusky partnered with fellow entrepreneurs Aquiles La Grave and Kelly Dotseth, and, after a bit of research, the trio set to work on developing a platform that would allow small brands with limited budgets, such as a local yoga teacher, to actually target and reach consumers on major publishers. Visibl (recently rebranded to Brandzooka), the resulting venture they launched 18 months ago, allows anyone to upload video advertising content to its platform, which places that content on global and media sites to reach highly targeted audiences.

“Brandzooka taps into powerful enterprise-level targeting and huge ad networks that allow us access to 98 percent of the programmatic video universe,” said Executive Vice President Patrick O’Neal. “But a number of other companies can, too. However, Brandzooka has simplified the interface for both and lowered the price of entry so that any company large or small can utilize it. No other company has created this ease of access, which sets us apart from all others.”

This accessibility and ease of use are among the platform’s selling points. La Grave said users can create a free account in less than a minute, with it taking an average of 2.5 minutes for a user to launch a campaign, rather than the several months of work typically required to do so through an agency. Launching a campaign is as simple as logging onto the platform, uploading video, entering the targeting parameters of the audience sought, which can be as general as entire countries (45 percent of Brandzooka’s user base is based outside the United States.) and as specific as college-age males in a specific ZIP code, and defining a budget for the campaign.

“If you wanted to just hit downtown Boulder, you can do that with Brandzooka, which is imperative for small local businesses which are leveraging the platform to talk to people in their neighborhood,” La Grave said.

Brandzooka’s scalability also makes it unique in the marketplace, as campaign budgets range from $50 into the hundreds of thousands.

“When we look at the space, no one has created a platform that scales that way outside of the Facebook ad manager,” La Grave said. ‘We don’t have multiple tiers or a pro platform versus a free platform. Everyone uses the same platform whether you are PepsiCo (a Brandzooka customer) or the local coffee shop.”

While much of Brandzooka’s user base is made up of smaller, long-tail brands, major ad industry players, including experiential marketing agency MKTG, have also become avid Brandzooker users.

“The way we are tapping into the platform is to extend the live footprint and to be able to serve up content in an intelligent way that can expand beyond the brick and mortar of what we do day-to-day,” said MKTG general manager Kevin Collins. “Any event execution where we are able to do a targeted promotion or increase impressions or awareness or even drive additional traffic to a live footprint has been huge because it has gotten us out of the game of how many people show up to a live event and shifted us into [looking at] the overall brand engagement lift for an experiential program.”

Collins said the ability to constantly shift the demographic details of the target audience is one of the most useful features of Brandzooka.

The burgeoning enterprise has found rapid success, with revenues increasing 1,600 percent in 2016, leading one observer to describe the company as a “juggernaut tied to a rocketship.” In the first two months of 2017, the data moving through Brandzooka grew 35,000 percent. This overwhelmed the company’s Google Firebase database, which is supposed to scale infinitely, and required the company to add two more Firebases as well as an IBM Watson supercomputer and other state-of-the art tech to help them keep up with the data ingestion.

The exponential growth in demand from users that began in the third quarter of 2016 led the company’s board to decide to double its seed grant from the $1.5 million that was initially raised. The company’s internal investors handled that raise. Brandzooka is now in the process of negotiating and finalizing its “series A” raise, which it expects to be closed and funded by June.

“We expect that raise to yield significant funding,” La Grave said. “It’s rare to see an early-stage tech company in Boulder take in $1.5 million in seed. It’s really rare to see one take in $3 million in seed. If you follow the trail on the multiple from seed to A, you can expect our A to be large.”

Brandzooka’s revenue and funding growth has been accompanied by an increase in its geographic footprint. The company recently opened an office in Seattle and has a permanent presence in New York and Chicago. The company plans to expand its foothold in those cities and is also looking to expand internationally later this year.

Brandzooka currently employs 20 at its Boulder office, with five more employees working in Seattle, Chicago and New York. The company plans to double its staff by the end of next summer. 

“One of the things we generally get asked is why Boulder and, by extension, why Colorado?” La Grave said. “When we truly think about it, we really don’t think we could’ve developed this platform anywhere else.”

“On the one side, the Denver/Boulder tech ecosystem has reached a level of maturity and talent that competes with any other tech ecosystem, including Silicon Valley. But on the other side, what happens specifically when Crispin Porter + Bogusky (Bogusky’s former ad agency) moved in was that it also brought in world-class knowledge in terms of creativity, advertising and media that intersect in very unique ways in Boulder.”

La Grave credits Boulder’s unique mix of tech and media talent with allowing Brandzooka to succeed where similar predecessors have failed. For example, he says the New York-based Spot Runner understood media but not tech, which prevented the company from scaling while other predecessors were strong with tech but not in media.

But while Brandzooka has benefited from Boulder’s rich advertising and technology ecosystems, neither of its founding executive leaders has a background in ad tech.

“I think that coming into ad tech and the tangential space without a preconceived notion regarding how we needed to operate is a large part of what has allowed us to build Brandzooka,” said Dotseth, Brandzooka’s chief operating officer. “Our lack of an existing paradigm regarding how we ‘should’ build a platform freed us to build a business that was reactive and really reflected the shortcomings of the space we were discovering.”

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