Anyone remember AdExact Corp?
Sunday, August 20, 2006
I don't think many of you would recognize, let alone remember, the name of this company (AdExact).
I'm only remembering it today because I just read that google is getting into the targeted TV advertising
business. As a matter of fact, AdExact
tried this whole premise of targeted TV advertising--I think they were successful to a point, but in the end they ran out of money and closed down shop.
The company was started by PixStream founder Stephen Bacso, after Cisco bought
them (nice guy, he plays soccer in a couple of city leagues; by the way, he kicked me really hard once--part of the game, I guess).
AdExact went through a couple of CEOs before going out of business. At the beginning of their story they managed to generate quite a buzz because of the Bacso legacy and, mainly, because it was a really neat idea and VCs were willing to give them money.
However, I think they were too early in the game with their product. If they could have known: I think google would have acquired them, similar to Reqwireless
(another local high-tech shop), had they stayed afloat for another 3 years.
I wonder what happened to all that technology and know-how?
I'm sure most developers got absorbed by the Waterloo market, but I haven't seen any of them (I knew a couple from my days as a co-op at HP Waterloo), except for Bacso who kicked me, and went to become CEO of some local Waterloo company.
I have a feeling that google will probably make it work with all their mighty clout and loads of cash in the bank--and perhaps the timing is better.
Does anyone know what the rules are to revive failed companies' business models? I really like Enron's on-demand broadband service model.
AdExact's strategy, which, I'm willing to bet, will probably be very similar to google's:
Television advertising. Now it's a whole new ball game. ADexact uses technology to transform cable and wireless channels into precisely targeted delivery mechanisms. The result? A new way for advertisers, broadcasters, and network operators to target information and increase the effectiveness of television advertising.
Now messages can be targeted to television viewers based on a combination of fine-grain subscriber information, profiles, viewing activities, and subscriber-registered interests - all in a secure and audited environment.
ADexact brings together innovators from eBusiness, telecommunications, and digital television to provide the unique expertise required to make ADexact the leader in targeted advertising solutions. We integrate targeted advertising, content, and information with the attention-grabbing power of television to deliver advertising messages more effectively than ever before.
I worked there as well. It was a dumb idea - privacy laws and general public concern would never let this fly.
Uber random, just came across this. I worked there as well. The biggest issue (which Google will face as well) is convincing the archaic television advertising industry that they need a new model and then teaching them how to think within it and actually use it.
It's an old boys club and ridiculously complicated just to buy ad time as it is right now. They've already got demographic targeting based on channel, time of day, and show genre. Try convincing them that they can buy a virtual time slot that will be shared by other buyers but that their particular add will only go to the viewers that match their profile: "So I just bought 30 seconds during the super bowl, but wait it's not all my 30 seconds and other advertisers can get that 30 seconds also, so less people see my ad?"
It's a losing proposition. Making the technology is cake, finding someone to pay for it is like selling ice cubes to Eskimos.
The reason AdExact failed was because they made an incorrect fundamental assumption. Their assumption was that the size of the advertising pie would grow. Their business model was that they would deliver this technology that allowed for targeted advertising and in return take a fraction of the growth in spending.
In reality advertisers were not willing to increase their spending on advertising just because AdExact developed a new technology. In fact they were looking to spend less.
Given the size of the pie was not going to grow the other entrenched players in the value chain were not willing to give up a portion of their cut to AdExact and became a barrier.