Byline: Gideon Spanier
WITH his cropped hair and plainspeaking manner, Sam Barnett does not look like one of advertising's slick Mad Men. But then the 27-year-old founder of Struq, a business that offers retailers highly targeted, personalised adverts on the web, has no desire to be part of an established order.
Barnett sees his start-up as a disruptive force that is using new technology to make online display ads as effective as search-engine advertising -- and in a way that some of the top media-buying agencies have struggled to match.
The big idea is "re-targeting". That means tracking consumers' online behaviour using cookies (tiny beacontype devices on your computer), identifying the most "predictably profitable" customers, and then refining the targeting to show more relevant ads to each consumer -- based on past behaviour and purchases. "It's all anonymised," stresses Barnett, adding that users can opt out of cookies.
His firm also offers creative input. It uses that customer data to personalise each banner ad by highlighting different products, using a range of colours, marketing devices, and so on.
Struq makes money by buying advertising space from websites in bulk but only charging its clients each time a consumer clicks on their banner ad. "We take a risk. We need 12 times the industry average of click-through rates on banner ads just to break even."
Barnett has got something right as Struq "serves" millions of ads a day. "On average, for every [pounds sterling]1 a retailer spends with us in media, they get [pounds sterling]19 in revenues in post-click sales. That's clicking on the ad and subsequently buying a product or multiple products."
Since founding Struq in April 2008 in the depths of recession, Barnett has seen turnover grow from [pounds sterling]500,000 in 2009 to [pounds sterling]6 million last year, and forecasts [pounds sterling]19.5 million this year. "Our growth figure doesn't just go up, it's getting steeper. It's astronomical."
He expanded into France and Germany late last year. "Now it is about global scale. I am pretty focused and ambitious about that."
Barnett, who grew up in Orpington, Kent, says his parents were not entrepreneurial.
After studying law at Leicester University, he worked for a year for entrepreneur Seb Bishop's internetsearch marketing company Espotting. "I learnt how to sell things to people."
The idea for Struq came after he moved to another site, AdJug, for a year. "I couldn't believe how much money went into online display advertising when it performed so badly," he recalls, referring to the problem of "banner blindness" when irrelevant ads pop up. "I thought 'how can you make display perform as well as search?'" He launched Struq with [pounds sterling]2000, and hired his first employee immediately. "The first year was torrid. No one would give us a loan or an overdraft -- thank you, banks. I was a 24-year-old kid saying, 'I'm going to change advertising and the ad agencies told me to f*** off'."
Struq survived by building technology for gambling sites. …