Pureprofile: From surviving the dot-com collapse to going public to reimagining the future of advertising
Pureprofile, an online profile marketing and insights technology company, was born just as the dot-com bubble burst and companies folded. Fifteen years later, the company is set to open up its Initial Public Offering (IPO) and completely change the way consumers experience advertising.
Prior to founding Pureprofile in 2000, Sydney-based entrepreneur Paul Chan was working in Silicon Valley and noticed that companies were raising eye-watering amounts of capital – like $50 million – and spending about half that on marketing material (e.g. online banner ads and television ads) that weren’t well-targeted. Even today, many companies are designing ads to reach large and wide audiences as opposed to targeted customer segments.
Now that we’re nearly always connected to the internet, there is no easy way for people to monitor and control their global data footprint. When we visit websites, fill out forms and purchase products, we leave a massive data trail with countless companies; and companies are using that data to deliver targeted advertising.
In the grand scheme of things, being able to consume advertising material relevant to your interests is a good thing. However, advertisements are delivered based on assumptions about users; and those assumptions are informed by people’s online behaviour, social media profiles, and so on. But rarely are internet users being asked what their preferences are in regards to advertising consumption. What ends up happening all too often is they get stalked by ads they don’t want in their lives.
A hypothetical example is you come across an article on healthy eating, and you curiously click on an ad on the side of the article screaming ‘Lose 20kg in 20 days with this new method!’. As you suspect, the page you’re directed is advertising a scam. But worse, that ad is now following around the internet.
Consumers are now exposed to more advertising than ever before – about 3,000 a day – thanks to being always-connected, however they have very little control over what they consume.
“Now that we have the internet, you should be able to an individual dialogue with every person, even if you’re just asking ‘Here’s my idea. Would you buy it?’ If you get an absolute answer, you can change the way you spend your marketing dollars. Rather than spending on TV or direct mail, those dollars can go directly to the individual for their participation,” said Chan.
What Pureprofile provides is a platform that enables consumers to create and manage their online profiles; and Pureprofile’s data enables its clients – including global brands, market researchers, publishers and advertisers – to match surveys with, or show marketing material to, relevant consumers, based on the profile the client is looking to target. Consumers are then financially rewarded for filling out those surveys or consuming marketing material (e.g. by watching a video).
Pureprofile can be used to validate any type of product and throughout a product’s entire lifecycle, from wireframe to v.10. Brands can ask consumers about what a product’s next feature or flavour should be; they can determine whether existing ads are conveying the right messages; they can even identify new channels (or paths to customers).
Chan stressed that Pureprofile delivers more than just standard online surveys; consumers get to watch videos, listen to audio snippets, read content and visit websites. This way, consumers get a rich experience and brands get thorough responses. Pureprofile essentially acts as the ‘attention or data broker’, according to Chan.
“We have two types of clients: individual participating consumers and brands. The brand, the brand’s researcher or the brand’s agency wants the attention and opinion of the consumer and we take a margin of the interaction fee. So if you want to ask a particular consumer [segment] five questions and that costs a dollar per person, then we could charge anywhere between 30 and 50 cents of that dollar. Once the consumer accumulates $25, they redeem that directly into their bank account,” Chan explained.
Filling out survey after survey may sound like too much effort, but Pureprofile has found that two to four percent of the population are highly opinionated and love sharing their opinions on politics, popular culture and other subject matters through whatever means possible, be it social media, a blog, or Pureprofile.
“You could be a mother, a doctor or a lawyer, opinionated people come from all walks of life. If you are a person that gives your opinion – it’s not dissimilar to the person that is inclined to complete or build a wikipedia page – you’ll probably find us somehow. Effectively, a majority of the people that have signed up to Pureprofile have found us because we’re the best in terms of consumer experience. We also pay out the most, and we want to be much more than just a survey company,” said Chan.
“We want to make sure that people see the value of having a profile and most importantly that they see the value of their opinions affecting decisions that governments, businesses and academics make. It could be helping the government decide on a traffic policy, commenting on a new election promise, helping a beverage company decide on the label they should use on a beer bottle, or talking to academics about the quality of your life and what could be done to improve it. It’s pretty straight forward. People are just commenting on their own lives and sharing their opinions.”
Chan said Pureprofile has always focused on the consumer first when it came to UX design. This is because obtaining survey data has been traditionally been annoying and invasive; researchers had to interrupt people while they were having dinner or stop them as they were leaving the shopping centre. Even today, many of Pureprofile’s online competitors blast emails or use pop-up windows to generate feedback.
Since its inception, Pureprofile has amassed over 500 clients, predominantly large companies like News Corp, Australia Post and Audi, though Chan is looking to capture a larger portion of the small business market as well as startups in the future.
Pureprofile also has more than one million registered users globally, of which ‘tens of thousands’ are participating in surveys or consuming marketing material every week, according to Chan. Pureprofile has paid out over $20 million to its account holders, a majority of which was paid out over the last five years.
Although Pureprofile was launched in 2002, after two years of development, Chan said it wasn’t until 2008 that the company reached profitability.
“I’m greatly appreciative of reaching profitability and getting to where we are now. The only frustration I can talk about is more to do with the size of the vision [rather than time it took to reach profitability]. What we want to do can have a really big, global impact … there’s always a sense of urgency. We’re not trying to be too bleeding edge, but we’re certainly constantly being pioneers … In fact, we were instrumental in disrupting a whole industry in Australia, moving from offline telephone research to an online environment where it’s win-win for consumers and brands,” said Chan.
Recalling a video Pureprofile create about a decade ago, Chan said there is a big opportunity for the company to turn profiles into assets on a larger scale. In fact, Pureprofile imagines a world where consumers get paid for providing their attention, instead of having TV and radio stations, telemarketers and search engines profit from it. In the Reverse The Search video, the following thoughts are presented: “In an unbelievably short period of time, the biggest media company in the world is now a search engine. The media and search engines are an integral part of people’s lives. But who’s been doing the searching? Who’s been getting the money? Who should be getting the money?”
“Why should businesses only be paying TV and radio stations, newspapers, direct mailers, telemarketers and search engines for your attention?”
Pureprofile believes the best marketing profiles are written, published and controlled by the people who own them: consumers. Although search engines have their own agendas as suggested by their ever-evolving algorithms, Pureprofile believes search engines can drive the ‘reverse the search’ movement. They can help businesses get instant access to relevant consumers by indexing their profile pages.
“We want businesses to work for you because you have that profile. This might mean matching content or the latest restaurants that are relevant and interesting to you, or making recommendations because of your profile and the information you’ve put in personally as opposed to their guesses,” said Chan.
He believes there’s an opportunity to remove unnecessary and complex algorithms and instead incorporate simple question-and-answer features. For instance, it would be very difficult for an algorithm to predict whether a person is looking to purchase car insurance in the next few months, yet it’s just one question that can be asked and answered easily. It would also be difficult for algorithms to identify a person’s brand preferences; even the Googles of the world would struggle with that one.
“Obtaining this kind of data and making sense of this kind of data make will change the marketing world completely and make advertising less frustrating and poorly targeted. It will also open up opportunities for publishers to invent whole new ways of delivering content, which is really exciting,” said Chan.
In the Reverse The Search video, the speaker sums up Pureprofile’s big vision: “For the first time, marketers of all sizes can now redirect billions of their advertising to reach and pay for the most relevant profile page publishers to interact with them. Marketing, for many, will now resemble a personalised friendly conversation between real people.”
“Profile pages are also available to market researchers and innovative businesses so they can develop better products and services using the opinions of millions of people who again are paid to participate. The money received from these marketers and researchers is used by people who purchase their music, video content, pay-for-subscriptions and charity donations. Exciting new media models will emerge to cater for these profile page publishers and their content demands.”
Although market research industry is big – valued at about $700 million – and arguably overcrowded, Chan said Pureprofile is moving towards a vision that far exceeds market research, and only sees three or four companies as competitors.
“Market research is really just one of the fundamental revenue drivers, and it’s certainly valuable. But I think personal data and profiles are really the future of all marketing and research and that’s really where we’re focused. We want to make sure this proposition make sense to the consumer, while also making sure there’s commercial value for publishers and brands,” said Chan.
Chan doesn’t deny that Pureprofile is competing with tech giants like Google, but believes that most businesses are to a certain extent. He said it’s important for competing businesses to maintain a ‘frenemy’ relationship where possible because there may be opportunities to collaborate. For example, when people search for something on Google, the search results could be added to their profile and they could benefit from the value of that secondary market. There are also opportunities for businesses to talk to consumers based on their searches, but in a way that’s invited by the consumer.
“Imagine sitting in the middle of 10s of 000s of different surveys for everything you can imagine, whether it’s for market research, academia or political polling. Pureprofile has been involved in all of that, so we’ve got designs and architectures around profiles that really give us an unfair advantage. Most importantly, you need to pimp out your profile because of the rewards it delivers you,” said Chan.
Given interruption advertising is commonplace even when people are paying for their content, there is a big opportunity for consumers to take full advantage of their profiles if companies like Pureprofile drive the ‘reverse the search’ movement forward. An interesting strategy would be for Pureprofile to work closely with content publishers, particularly ones that have built electronic paywalls around their content, to deliver content and advertising based on people’s profiles.
But if the advertising industry generates over $500 billion in revenue a year, Pureprofile’s mission is nothing short of ambitious. Chan believes listing on the Australian Securities Exchange (ASX) will propel the business forward and is a better long-term strategy than raising venture capital.
“We have a fairly large vision: to make sure that everybody’s got a profile and that we can connect them to what matters and is relevant to them. This will extend far beyond market research and into things like content and recommendations. But in order to enable all of that growth we need to make further investments in technology and hire really great people. Listing on the ASX allows us to do that. Plus, I want to build a company that’s going to be around for a long time. We’ve already been around for 15 years, but I can [envision] the next 10 to 15. Raising private equity would have only given us a three to five year window.”
Pureprofile raised $2.5 million from high-net-worth individuals and institutional investors in November 2014, in addition to $2.5 million since its foundation in 2000, though this is a ballpark figure due fluctuations in currency over the past 15 years. As of Monday last week, Pureprofile had raised $10 million of the $12.1 million it had planned to raise on listing. The company has not disclosed how much was ultimately raised.
In addition to accelerating growth in Australasia and other international markets like North America, Asia and Europe, the funds are being used to acquire Australian programmatic media buying company Sparc Media and its subsidiaries in India and Poland. According to the prospectus lodged by Pureprofile last month, the Sparc acquisition will allow the company to provide: 1) managed programmatic campaign services to advertisers and agencies, which involves using data, algorithms, computers and human expertise, to buy and sell online advertising inventory through advertising exchanges to advertisers and agencies; 2) media trading, which involves the buying and immediate resale of ad inventory programmatically; and 3) performance marketing/lead generation campaigns for education providers and other performance focused advertisers.
“The Sparc acquisition gives us the opportunity to start to unpack and deliver a valuable consumer solution by making your ‘uncleaned profile’ something that you can clean. Consumers have so many profiles out there, and they just don’t know where and how the data is being stored. There are a lot of ugly things happening in the background. We want to make sure we’re making that as transparent as possible,” said Chan.
“Transparency isn’t necessarily always what an industry wants; the industry is thriving without transparency. But we’d like to make sure that programmatic [trading] is, from an efficiency perspective, the way forward. Transparency helps the consumer make advertising a better experience for them, while also improving yield for publishers.”
The acquisition will cost between $2.5 million to $6.6 million, according to Pureprofile’s prospectus. The newly raised funds will also be used to help build a publisher-side platform for the management of a publisher’s audience-base and acquire additional databases, sources and channels.
Pureprofile is forecasting pro forma revenue for the 2015 financial year to total $20.6 million; this is expected to grow to $28.1 million in the 2016 financial year. Annual profits in the 2016 financial year will sit around the $2.5 million to $3 million mark, based on the numbers presented in the company’s prospectus.
Currently, Pureprofile employs 75 people globally and has offices in Sydney, New York, Los Angeles, London, Mumbai, Poland and Greece, with plans to open an office in Auckland. It also boasts a strong board, which includes Cliff Rosenberg, Managing Director of LinkedIn Southeast Asia, Australia and New Zealand.
Featured image: Paul Chan, Founder and CEO, Pureprofile. Source: Provided.