Formvertise wants to inject transparency into mobile advertising
There’re are many ways by which an advertising campaign can be assessed: click-through rate, cost per thousand impressions, cost per click, cost per action, brand recall, purchase intent, website visitors and so on to infinity. It makes it a maddening field sometimes, fraught with jargon and strange acronyms.
But as Shaunak Khire - the CEO of Formvertise, a mobile advertising service that launched in August last year - explains to me, these are “fluffy” metrics as well as confusing ones. It doesn’t matter who clicked, who saw, or who looked. What counts are sales and building up an engaged customer base to market from, especially for smaller, local retailers, that aren’t the national and international brands that get to throw around fanciful ideas about brand affinity around the conference room table.
“Ninety-eight percent of all display ads are ignored. If someone does see an ad they go straight to the website, but a good half of them don’t come back,” Khire says. Studies have estimated that around 30 percent of all online ad impressions are fake, he adds.
Formvertise are trying to buck this trend of terribleness in mobile advertising. It launched its first product in August last year, brand ads that contained a short form within them, offering customers incentives to fill them out. Now, it is rolling out new "swipe to buy" ads which will take a person directly from an ad to a check-out page and a customer interface that lets a brand see how many sales and customers a campaign will net before launching.
Khire wants to guarantee results to clients with Formvertise, bringing an expected result to the subjectives of advertising. A $2,500 annual commitment to a campaign reportedly guarantees a brand 750 sign ups. For $5,000 they get 150-300 new customers. At $20,000, a customer can set their own demands. It’s advertising done on a "software as a service" pricing model. When a brand signs up for Formvertise, its algorithms scan over a dozen sites like Yelp, Facebook and Yellow Pages as well as a database of over 15 million US companies to analyze the business and apply it a score according to its viability, which the company uses in qualifying the promises it makes.
“The goal is to make customer acquisition super simple,” Khire says. “Proper customers, paying for products and services.”
“And with mobile advertising the checkout flow is not great, so with Formvertise the brand no longer loses that opportunity to convert a window shopper.”
Khire sees Formvertise as working in a niche in the online advertising market. His company is ostensibly a local advertising agency. The lower $2,500 and $5,000 yearly pricing models target only by location and interest. But as online advertising becomes the dominant paradigm, even its niches will be large. Forecasting data from BIA/Kelsey puts the digital local advertising market at $29.1 billion for 2014, up from $23 billion in 2012 and rising to $41 billion by 2017.
“I like to draw offline parallels and I think Formvertise is like a direct selling kiosk or a popup shop,” Khire says. “It is ultimately more about commerce than it is advertising. It is a big market, but not Google big.”
Targeting a niche audience has already backfired on Khire once. His last company Adlibrium was too early to local advertising in 2011 and went after small businesses with an Android only platform. It didn’t work and the demand was not there on the small business side.
As Khire looked to rebuild he says he saw a huge opportunity in creating an advertising product which utilized the data available on the mobile platform and worked within the design of the smartphone. By simplifying the process, he thinks he can win away small merchants who have relied on AdWords or Facebook to date.
“I think most small businesses are stunned as far as how hard AdWords is to use. They don’t handle that interface themselves,” Khire says.
“For the end consumer of Formvertise, the experience is really simple,” Khire says. Brands know up front what they’re buying with the new interface. The set up time for the forms and swipe to buy ads is minimal. They're simply designed and call for minimal information from the brand and its customers. If a sale is not completed, it can email a customer twice to remind them.
Formvertise’s challenge is two-fold: first it needs to show unequivocally that it can produce the results it promises, then it needs to lure smaller companies away from the amateur Facebook-and-a-Yelp-page model with that set return on investment. Online advertising can seem at best like a dark art, at worst like a sham.“I am very pleased that we have seen Mom and Pop business interest from regions as varied as the Midwest to Australia,” Khire says. He’d like to make online advertising more inclusive, bringing a sense of transparency to it that attracts smaller companies. If nothing else, it’s a worthy goal.