Spotfront is an automated vendor marketing platform that gives retailers the ability to generate revenue by providing brands with tools to promote their products. The Spotfront SaaS solution, PromoteIQ, provides a significant revenue gain to the retailer over traditional ad network monetization. The 5-year-old company is growing rapidly and their PromoteIQ platform is already used by a number of leading retailers including Overstock and B&H Photo.
AlleyWatch chatted with CEO and cofounder Alex Sherman about the Startup and how they have been able to thrive in the crowded Martech space.
Tell us about the product or service.
Spotfront is the first automated vendor marketing platform for e-commerce retailers. Using our PromoteIQ plaform, online retailers can offer powerful product marketing tools to their brand partners, and in turn those brands can use PromoteIQ to increase the visibility of their products on site and boost sales. The result is a massive incremental revenue stream for retailers; and a powerful new performance marketing solution for brands.
How is it different?
We are a transparent SaaS platform (vs. an opaque ad network), so we are able to offer the retailer a lot more control over how monetization works on their site, and maximize revenue from their monetization program. Retailers who use PromoteIQ grow monetization revenue by 3-5x compared to traditional ad network programs.
Vendor-funded marketing is a multi-billion dollar space and growing rapidly. For context, Amazon’s advertising division did over a billion dollars in revenue last year – the profits from which subsidize every other aspect of their business. Retail as a whole tends to be a low margin business (<5% on avg) whereas revenue from vendor-funded marketing is usually closer to 75%. Accordingly, every major retailer is racing to build out their own high-margin media group – we give them the platform to do it in a turnkey way at scale.
What is the business model?
Monthly SaaS license fee to retailers.
What inspired the business?
My cofounder Peter and I worked at adtech startup called MediaMath as early product/engineering employees. When we left to start Spotfront, we were looking for a way to apply the programmatic media trading principles we had learned there to another space. A retailer actually approached us and said “we are looking to build an auction-based system that our brands can use to bid on digital shelf space – would you build it for us?”. That turned into our first client and things took off from there.
They are! Brands want to control their destiny on e-commerce sites. PromoteIQ gives them an easy automated way to increase sales.
What are the milestones that you plan to achieve within six months?
Growth on all fronts! The master plan is confidential, but we’ve already begun expanding into Europe and S. America. We’ll likely accelerate those initiatives in the near term!
What is the one piece of startup advice that you never got?
Never, ever give up.
If you could be put in touch with anyone in the New York community who would it be and why?
We are always interested in speaking with retailers of all shapes and sizes.
Why did you launch in New York?
Can’t imagine a better place to launch an enterprise SaaS company. NYC has it all.
What’s your favorite rooftop bar in NYC to unwind?
Rooftop bar at the Met!