Building a successful company is no small accomplishment, but building a successful, growing and profitable Internet company was labeled in 2001 by Time, Newsweek, and many other popular publications as nearly impossible and a basically a joke. Internet companies, particularly online media, were the rotten apple and scorn of Wall Street, mass media, and average Investors everywhere. In 1998 venture capitalists flocked, and by 2001 they ran away and hid under their desks. If you’ve been fortunate enough to be a part of a winner than you should be proud. The Cydoor Desktop Media journey has been a winding road with many successes and failures along the way, I’m happy to say we survived and have thrived. I was kindly asked to write about the evolution of Cydoor Desktop Media and how we’ve survived and have grown to be successful so that others may appreciate the experience.
Cydoor Desktop Media was started in 1998 back when Engage, FlyCast, DoubleClick and many others were booming online media stars. Back in the day when having investment from CMGI was worn like a badge of honor, and tracking click stream data was the rave. Internet World was more like Mecca, hardwood floors and warehouse space was in demand and suddenly stock options became a common currency. These were intimidating times for all of us because while the DoubleClicks of the world appeared to be invincible, Cydoor Desktop Media was just getting started with some modest investment and a simple vision to rule desktop advertising. The vision was that the desktop was the most premium space available, browsers were hot, but in Cydoor’s opinion the desktop was where the user spent their time and there was no better time to reach them. Our inhouse ad technology was very inexpensive to operate, had modest bells and whistles and our ads got the job done. This was an exciting time where we signed tons of software publishers hoping to make revenue from their ad-enabled free software. Software publishers had a whole new revenue model and advertisers gained a new ad real estate.
The great thing about entrepreneurship is that it’s acceptable to try new things, adjust, try again and keep going till you get it right. We talked to everyone possible, the big agencies, networks, ecommerce companies, software companies, you name it we talked to them. We also signed many different business development deals in hopes that this would be the one software application to create tons of desktops available to advertise on. We signed Opera browser, Kazaa, Jet Audio Mp3 player, Imesh and Morpheus to name a few. This was all before Mp3s and P2P was flying high. Welcome to the ground floor.
Most of the time no one understood the whole desktop vision thing. I remember pitching a media buyer at Ogilvy in 2000 about going ‘beyond the browser’ and reaching the audience on desktop software. After several confused grins the buyer commented that no advertiser will ever go for desktop advertising, ever. This was a common ordeal for Cydoor. All anyone wanted to talk about was browsers. Agencies and buyers were in awe of the big networks and branded sites and spent big cpms to prove it. So deals, the Nasdaq 5000, employees with a dream, and funky furniture came, then left. We pressed on.
While Engage, FlyCast, DoubleClick and many others were riding high on the VC wave selling atmospheric cpms/cpcs, and promising razor sharp targeting, the market was evolving and having second thoughts about the whole Internet dream. The crash of 2001 was one of best things that happened to Cydoor because it was an awakening to reality. Sure we had to downsize and it was tough. However, the market woke up to the fact that online ads should be profitable and that it wasn’t all about the craze. ROI became a common requirement and CPA took hold as fast as CPM disappeared.
What helped us survive that period was that our ad delivery technology and the growth of our network allowed us to sell ads at rates which were a positive ROI for advertisers. We moved with the market and the insane ad serving costs others were locked into, helped us dramatically undercut our competitors. Frankly it was the Walmart approach to online advertising. Sure it doesn’t sound fancy, but at the time everyone was ‘Premium’ and drank their own coolaid. Let’s not forget Walmart is the largets corporation in the world. We decided online advertisers wanted mass volume, performance and affordable rates, nothing more, nothing less. There was a tremendous resentment by advertisers towards all the popular sites and networks for feeling misled, ripped off and scorched. Our sales people frequently heard from advertisers who felt they were lied to by others and would never touch the online media again. Cydoor provided a tremendous value and advertisers slowly flocked to our volume approach. To further promote this vision and help dozens of advertisers understand that online media wasn’t hopeless I personally began writing a column called Regular Rantings in a new Newsletter started by one of the early industry players called Adbumb. The response was incredible and I was constantly answering questions for big and small advertisers on how to make an online campaign successful. It became clear that with all the millions of dollars spent promoting online media through street signs for DoubleClick, few advertisers understood what to do with it. There was a lot of frustration and the column and newsletter helped lend a voice to address it. This was a great experience for Cydoor and me because we learned in mass what was on the minds of our customers and how to address it.
As things evolved, our only frustrating battle has been the ongoing misunderstanding of adware as spyware. From the beginning we’ve delivered our ads within traditional free consumer software applications, no different than magazine, web site, and newspaper ads amidst the content. Ads in software has provided software developers revenue that helped fund incredible free software that frankly has changed the Internet as we know it. Free ad supported desktop applications include: instant messengers, peer-2-peer, VOIP phone applications, browsers, and much more. Cydoor has never ever tracked or spied on its users. Unfortunately many companies sell products that make money from scaring the public of spyware. Fear is a great marketing campaign to sell spyware detection products, gas masks anyone? The whole spyware debate has been a black eye on our industry and while there are some companies that do unacceptable things, we’ve never been one of them. Hopefully one day this will be clear.
Today we’ve grown and benefited tremendously from the unprecedented explosion of desktop software and most mainstream advertisers now believe in desktop advertising and make it a core part of their media mix. We’re a profitable company with a healthy and very talented group of employees that are very focused on providing an ROI positive experience to our advertisers.
We’ve learned a lot these last 6 years, all of us have. Most important is to stay lean and mean and bring value to your customers. The moment you get big and slow is when the tide turns. The market is exploding with desktop, search, networks and even more newsletters all along with us and this is a very exciting time to finally deliver the promise of online media.
Robert Regular is the President, Americas of Cydoor Desktop Media bob@cydoor.com
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