One of the perpetual themes of the technology news sites and blogs this year has been fairly nonstop coverage of Twitter, the microblogging site. Aside from constant coverage of whether the service is up, or down, or somewhere in between, there's also been a lot of attention given to how the service plans to make money. So, it was interesting to speak with Sean Rad, founder of Twitter advertising firm Ad.ly (www.ad.ly), on how his firm is looking to help users make money from the service, even if Twitter isn't. Ad.ly is based in Los Angeles.
Sean, thanks for talking to us. How does Ad.ly work?
Sean Rad: Ad.ly is about helping people on Twitter make money from the content they are creating. With Ad.ly, any Twitter user--ranging from your average Joe to a celebrity, can send a tweet on behalf of an advertiser, and get paid for doing so. The way it works, is the system sends a request from an advertiser, who then posts a tweet in their stream--just like any other tweet. Those users approve every single request. If they feel that the message from the advertiser is relevant and appropriate for their audience, they approve it, and Ad.ly takes care of the rest--sending the message, and providing the advertiser with the data to gauge the success of their campaign.
How'd you decide to start Ad.ly, and what's your background?
Sean Rad: I started another company called Orgoo, which was a unified communications platform. I was pretty young at the time, and that was my first company. It was a TechCrunch40 company, grew to many employees, and raised a large chunk of money. I left the company about 12 months ago, and decided to pursue Ad.ly simply because I am a believer that content creation and distribution is moving from static pages to the stream. The stream is potentially the future interface to how we interact with content, much like the web. Given that notion, I think that there needs to be a platform that helps serves ads in a format that is appropriate for the stream.
Is there some kind of matching on what ad gets presented to what user?
Sean Rad: It is targeted, and an advertiser can find a user based on a variety of parameters, ranging from the category that the publisher is in, and some analysis around their account. They can have different targets based on an advertiser's goals. We do our best to categorize and identify publishers. For advertisers, the opportunity here is social graph targeting--the ability to target people based on who an individual is. That's because, depending on your advertising goals, your target audience can be highly identified by an individual. People who like Kim Kardashian or like Sean Rad match a certain target demographic and audience, depending on who they are following and who they are connected to. It's a different way of approaching targeting.
There's been a lot of controversy about advertising on Twitter, how do you address those concerns?
Sean Rad: We believe that advertising in Twitter is inevitable, and our goal is to find a model that keeps advertisers happy, publishers happy, and the Twitter ecosystem happy. In order to do that, there are lots of things that we do--ranging from limitations in the system, to algorithms ensuring quality, and more to keep it a spam free environment with advertisement. In terms of the controversy, we view people on Twitter as content creators, and if you produce content, you should be compensated for it. A lot of the controversy revolves around the notion that Twitterers are more part of a social network than content creators. Twitter is a platform for broadcasting information and content, not just a social network. People are in fact publishers, and if you view them as publishers, you'll accept they need to monetize their activity. The most common way to monetize content is advertising.
Is there some risk that Twitter will not want to see your ads running?
Sean Rad: There is a lot of risk. But, that's why as a company, we're focused on the stream in general, not just Twitter. I wouldn't say its not something we're worried about, but we are not only about Twitter. We're building a platform for monetizing the stream, period. The stream resides on a variety of platforms, not just Twitter.
Are users paid for views, clicks, or per tweet?
Sean Rad: They're paid per-tweet.
Let's talk a bit about your funding--can you talk a little bit about how your funding came about? Did you have to shop this around a lot?
Sean Rad: It was a seed round, that happened to be from a venture firm. We were not shopping it around, and it actually came from very organic events that came to fruition. It was pretty much because we had a strong relationship with GRP and Mark Suster. It was a very natural fit, and a very quick, organic fundraising. We knew what we wanted, they agreed, and the deal was done.
Are you launched, and now matching up advertisers with Twitter users?
Sean Rad: Yes, we formally launched three months ago, but the business had been around for much longer than that. It's working for both users and advertisers, and so far we haven't received any complaints from users who are actual followers of accounts. Everyone is happy.
Finally, what's next on your plate?
Sean Rad: We're looking to grow and scale -- more users, more advertisers, and to build a more solid company and system.