Entrepreneur Scott Kurnit regularly places his 18-month-old, pre-revenue, “platform” startup AdKeeper in the same company as Facebook, Twitter, and Google, and people don’t spit out their coffee at the suggestion.
It begs the question of whether Kurnit, 57, is a brilliant salesman, a visionary, or both. According to Kurnit, the technology behind New York-based Adkeeper — which invites people to “keep” display ads for later viewing in a digital locker hosted by the company – will be a common sight across the Web in five months’ time.
Kurnit says AdKeeper already has contracts in place to install its “keep” button across 27 percent of the Internet’s display inventory. (Asked how he arrived at the number, he says that the 60 advertisers to test AdKeeper, including Kraft Foods, AT&T, and General Mills, have agreed to incorporate its icons in 100 percent of their Internet display ads.)
He attributes AdKeeper’s success to performance. Since flipping the “on” switch in February, AdKeeper has peppered the Web with 6 billion “keep” impressions. Kurnit says these tests not only show that people are using his company’s small “k” icons to save targeted ads but that the icons actually complement – not cannibalize – advertisers’ campaign goals.
Kurnit offers a stream of statistics to support his claims. For example, he says that consumers who “keep” ads wind up clicking on them 3.4 percent of the time, versus the Web-wide click-through rate of 0.1 percent. Kurnit further claims that consumers spend 35 seconds looking at ads in their “keepers.” He says that’s 25 times the 1.3 seconds that consumers generally spend eyeballing a display ad unit. (One’s “keeper” appears whenever a new “keep” icon is scrolled over.)
What Kurnit declines to say is what percentage of users actually looks at the ads they’ve “kept” or how many people have “keepers,” which might better indicate whether the company’s numbers are statistically relevant.
He calls his a “chicken-and-egg” dilemma. “Most people haven’t seen a ‘keep’ button yet, and until they have, they can’t create a ‘keeper.’” The important thing, he says, is that AdKeeper has shown advertisers its product works, and now they’re going to blanket the Web with the technology. When that happens, Kurnit is convinced that AdKeeper will “get the perfect Internet virtuous circle where it feeds on itself and takes off.”
If he’s right, it will be an impressive feat. Then again, Kurnit has never been short on chutzpah. He led his last company, About.com, to an IPO in 1999, then sold it to the publisher Primedia for $690 million a year later, just as the tech market was fast collapsing. (In 2005, About.com was acquired by its current owner, the New York Times.)
He also managed to raise $43 million for AdKeeper last fall and winter, on little more than the idea.
Kurnit’s appeal to investors is obvious. His salesmanship is apparent to anyone who talks to him, and he dreams big. It’s also the case that Kurnit has an extensive network of friends in the media. For example, The Times Company has backed AdKeeper, and Kurnit is an investor in Business Insider. (Perhaps Kurnit’s connections make it easier to understand how AdKeeper’s fundraising prowess escaped the ridicule that befell Color, the exhaustively lampooned photo app that raised $41 million in Series A funds in March.)
Kurnit is also smart enough not to gloss over the company’s challenges, even if he downplays them. While he says the company’s increasingly ubiquitous icon will be self-reinforcing, he suggests that the company is now spending heavily to spread awareness about AdKeeper, including by running ads in major outlets and splashing the brand on everything from billboards to phone kiosks.
Meanwhile, the company — which already employs 70 people and plans to hire another 50 — has zero revenue. And though AdKeeper intends to make money by charging its clients every time someone revisits an ad in their “keeper,” it hasn’t decided what to charge or when to start charging. “If I discover something next April that makes the business worth 10 times more if I continue to give [the service away] then I’ll do that,” Kurnit says.
Kurnit puts AdKeeper in some pretty esteemed company despite such hurdles. “Because of the nature of our business, we’ll grow much faster” than Facebook, Twitter, and Google, he says. “It doesn’t happen overnight,” but it won’t take long, either. “By the end of this year, I’d say 90 percent of the Web will be ‘buttonized,’” he predicts.
We’ll see soon enough if he’s right.
