Summary
Digital advertising is expensive and time-consuming. And worse, much of it is ineffective. AdParlor found that American companies in its sample wasted 20-50% of their social media spend. One reason why many paid ads fail is ineffective creative (graphics and videos in the advertisement). A common form of this is creative that has gone stale from being reused for too long.
Insense wants to fix the problem of stale ads through its marketplace. This Deal to Watch startup is connecting mid-sized businesses with content creators as well as providing data-driven insights on how effective an advertisement is. We sat down with founder Danil Saliukov to learn how Insense was started and what investors should know about the company.
Can you give us a brief elevator pitch for your company?
Insense is a data-driven marketplace bridging brands and influential content creators. Our marketplace makes it easy for marketers to create highly effective video content through a network of creators and data optimization with an ML engine. All posting, tracking, and engagement takes place within our marketplace — making it a one-stop shop for advertisers looking to boost their brand or message.
We have done $1.5M in sales in 2019 and are on the way to double it in 2020. We work with marquee clients like L’Oreal, P&G, we are a Facebook Marketing Partner and are backed by top growth investors including Ariel Lebowits (Head of M&A, OLX Group, Naspers) and Ihar Mahaniok (ex-Facebook, WeWork, Google).
What inspired you to take the leap and build this company?
My inspiration for founding Insense was quite simple — our experience with advertisements in social media. While browsing Instagram back in 2016, we noticed that a lot of advertising was just disgusting — content similar to banners from the early 2000s.
Anton, my brother and co-founder, had his own social media boutique agency serving brands such as Uber (UBER) and McDonalds (MCD). He worked a lot with influencers and content creators to deliver great creatives for organic and paid channels.
Some creative projects worked well, but many did not. The scale of 25 creators and over 50 projects made the process complicated at every step. Anton decided to build a platform to help other entrepreneurs and presented this idea to me.
What past experiences prepared you to start, build, and lead your company?
I was a mid-top manager at QIWI (NASDAQ: QIWI) with quite a fascinating career path ahead of me. I joined as an international business development manager, became industry head after 3 months, and then head of department 12 months later with the responsibility of 13% of net revenue of a $1B public company. Anton and I are brothers, and Anton still says that getting me as a co-founder was the best sell in his life 🙂 . Before joining Anton, I analyzed the video ad market and found it to be a $90B+ market, with a strong trajectory for growth because of the digital video segment. Ultimately, the most important thing for me was the belief of Anton. We launched Insense in August 2016.
What is your vision for the future of the industry you are operating in?
People hate ads [like the] old fashioned banners. Ad blockers made people blind, and only creative content can change the way we consume ads. Video ad revolution is already happening with new platforms such as TikTok, Likee and other new formats like Stories. However, creating the video content is still challenging and expensive. Moreover there are no signals of the potential performance on the production stage. We believe that the combination of the creator economy and machine learning tech can change the industry.
Our vision is to build a $1B+ company. Within the video ad market, generally, many opportunities exist. Once we achieve a certain market share in the social video ads market, we are going to provide our solution to connectedTV and programmatic markets as well. Be that as it may, if there will be a strategic player who can help us realize our ambition faster and evaluate our company accordingly, we will be happy to take a look.
Our goal is to be a one-stop shop for UGC video production and optimization, for any marketing channel. Imagine you are a marketer that wants to have ROAS (Return on Ad Spend) and spend less time for content production, but still be relevant and interesting for your customers. This is the situation where we will ideally serve as a solution. Also, we dare to challenge ourselves. Therefore, we plan on going public within the next 5 years.
Who is on your team and how did you come together?
My brother, my friend and I started this business together in 2016, and we are 31 now including great engineers, product team, sales & marketing and amazing creators team. Three of us — the co-founders — have known each other almost all our lives and had our own paths to start a company: entrepreneurship, corporate experience and building partnerships, experience in creative & ad industry. We call our team #insensefamily because we support each other and believe in our vision: “Simplified brand discovery driving social commerce.”
Do you have any competition, if so, how do you differentiate?
We are one of the only marketplaces that combines efficient video production with paid performance relevance. Off the top of my head, the only other ones are Vidmob, Vidsy or SocialNative. However, they focus entirely on enterprise clients, and our target is mid-sized businesses. Also, we invest in real tech that connects the performance world and creativity, not consulting or analyst work.
What does your business model look like?
Our business model of a “marketplace” with network effects has great scalability and strong defensibility. Insense has two components:
- The content production fee (up to 30%), in which marketers add money to their balance to spend on content creation. Insense keeps these funds in escrow and pays creators once the job is done.
- The premium monthly subscription (with three priced tiers) which provides users access to premium features and support.
What brought you to equity crowdfunding and how do you intend to use the money you raise this round to scale the business?
Republic became our client a year ago. We never considered running a crowdfunding campaign before we met Republic. But we changed our mind when we saw great companies listed there and followed their idea to open an investment opportunity to our network of content creators & influencers.
We would like to invest in customer acquisition, marketplace health (supply side) and R&D to continue our 20% MoM growth and implement network effects into our marketplace.
What do you want potential investors to know about you and/or your company?
We’re not newcomers here. It’s been a 4 year journey in typical 5-7 years of the initial building of any marketplace. It is time to accelerate our growth, and we would like to have investors who share our vision of building the leading creator marketplace with $1B+ valuation.
As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?
We are open to being listed on the stock exchange or partnering up with the strategic player on the market.
We at KingsCrowd are excited to see where Danil and his team take the company. Insense is currently raising on Republic.
