These Guys Are Betting You Can Still Get Noticed Online Without AdsAugust 25, 2014
New York Business Journal
by Ben Fischer
To hear some people people tell it, 2014 is the year free social media marketing died.
But Conductor, a venture-backed marketing software firm in the Flatiron District, is making precisely the opposite bet with a goal to " end paid media." Three months after announcing its expansion beyond its roots in search engine optimization, Conductor claims a strong summer of new customers and growth on its "web presence management" software platform.
After CEO Seth Besmertnik founded the company in 2010 as a pure SEO shop, Conductor is now thinking about clients' online reach more broadly. Its new products are designed to track and measure a brand's unpaid marketing efforts across the entire web, spitting back data to inform new efforts in social media channels, original content and search. It's a drastic expansion from plain SEO work, and is at the heart of Besmertnik's belief in unpaid media.
"All the banner ads next to your content on your site, they do get some attention, but they don't get clicked on nearly as much as organic, and that's what we do," Besmertnik said, citing research about how much more frequently customers are acquired through free channels.
While it's a logical expansion from SEO, it does seem like he's tackling an increasingly challenging space. By design and simple math, it's getting harder and harder to stand out on social media channels without buying ads. But Conductor isn't about closed networks like Facebook or any single channel, Besmertnik says, and there will always be a new channel popping up to create new opportunities for organic marketing — and users aren't going to suddenly start to appreciate paid advertising again.
"So I ask myself, three years from now, will I be clicking on organic ads on Pinterest, or clicking on content?" Besmertnik said. "Absolutely. I'm not going to all in the sudden become in love with banner ads. And that's the bet we're making."
As they've expanded their vision, Conductor is also scaling up, adding a San Francisco office in July and expanding its workforce from 100 to 150 employees, largely costly developers. They're still filling their offices at 2 Park Ave. in New York.
So far, it's paying off, the company says. In the second quarter, Conductor added AT&T, Aquasana, Johnson & Johnson and Overstock to its client list, and now has nearly 500 customers.
One of the new hires is Kerry Ancheta, their global head of sales who has been with the company since early May. Ancheta came from software platform firm Apprenda, and before that, and database providers MongoDB and MySQL.
Backed by about $33 million in venture capital from FirstMark Capital, Matrix Partners and Investor Growth Capital (with the last round coming nearly two years ago), Conductor remains unprofitable as it continues to build a book of business. The latest expansion has been costly, and Besmertnik says they'll likely return to the venture capital world early next year for an additional round, buoyed by a good year with the expanded vision.
"We're definitely investing for growth, which means we are burning capital, and it also means we're looking for new capital in the future," he said.