After an initial punch in the gut during the spring from the Covid-19 pandemic, the Marina del Rey-based adtech company just posted “one of its most successful quarters” in the third quarter, according to Chief Operating Officer Jason Wulfsohn.
And for the fourth quarter, he said, results are “tracking to be substantially higher than Q3.”
Wulfsohn, who co-founded the firm with Chief Executive Reeve Benaron in 2014, credits the company’s array of clients in a range of industries for its ability to weather the pandemic.
“Because of our heavy diversification across different sectors of the U.S. economy, we’ve been able to identify areas of opportunity and growth during this period of economic volatility and really focus our sales efforts on those areas,” Wulfsohn said.
AudienceX offers digital advertising services to mid-market companies and traditional advertising agencies. Its proprietary software, tdX, provides access to automated exchanges where ad space is bought and sold via real-time auctions. AudienceX also specializes in search and social advertising, as well as branding and strategy.
Middle-market focus
Wulfsohn said the company “was built around the vision of being full-funnel, omni-
channel, focusing on performance marketing but understanding branding and really delivering that to the middle part of the market.
“We’ve been committed to that vision almost since our inception. We’ve been doubling in size year over year in each of the last four years because there’s such an acute need for that solution,” he added.
AudienceX posted revenue of $26.7 million in 2019, a whopping 239% increase from $7.8 million in 2017. It employs 57 people and has offices in Buffalo, N.Y.; Charlotte, N.C.; Chicago; Dallas; Detroit; Kansas City, Mo.; Miami; Seattle; and St. Louis.
Its clients include Ford Motor Co., Ubisoft Entertainment, Microsoft Corp., Mercedes-Benz, Intuit Inc., Suzuki Motor Corp. and AsusTek Computer Inc., as well as the Los Angeles Zoo in Griffith Park, Metro-Goldwyn-Mayer Studios Inc. in Beverly Hills, and Warner Bros. Entertainment Inc. in Burbank.
Warner Bros. hired AudienceX to create a campaign to generate awareness and build up ticket sales for “The Judge,” starring Robert Downey Jr. and Robert Duvall in its opening weekend. The plan included micro-targeting actors’ fan bases via display and preroll advertising.
Wulfsohn and Benaron are the company’s sole owners. They’ve invested in AudienceX “significantly over the years, and that’s always been sufficient to drive the kind of growth that we’ve been looking for,” Wulfsohn said.
The company made two early acquisitions — Invertise in Culver City and VisiSeek, a San Diego-based ad agency.
A recent influx of outside capital will provide opportunity for further growth. AudienceX received “a multimillion-dollar investment” in January from Decathlon Capital Partners in Palo Alto to help drive market expansion.
The funding will be used to bolster the sales team and support marketing campaigns to drive high-quality sales leads. Some of the investment may also be used for a potential near-term complementary acquisition.
“Reeve and I are both very entrepreneurial in how we think about AudienceX, and we’re very much focused on continuing to stimulate aggressive growth,” Wulfsohn said.
“We partnered with Decathlon to strengthen our ability to invest in various growth initiatives. One is continuing to scale the size of our sales team and show that we’re in every market where we see opportunity. … We are also increasing our investment in building the AudienceX brand, telling the AudienceX story and ultimately driving high-quality inbound lead flow. … We are also … always looking for acquisition opportunities,” he added.
The economic downturn has presented AudienceX with several potential acquisition targets.
“As a result of the pandemic and economic volatility, there are number of high-quality, distressed assets in our space — digital agencies in particular. … We think this is a very, very good time to pursue this because smaller independent digital agencies can be experiencing stress in terms of customer stability or in terms of cash flow.”
Software solution
In 2017, AudienceX’s former technology partner Rocket Fuel was acquired by Austin, Texas-based Sizmek in 2017. When Sizmek subsequently filed for bankruptcy, AudienceX decided to launch its own software offering with tdX.
“We had always intended to build a trading desk solution, but the collapse of Sizmek accelerated the development and roll out,” Wulfsohn said. “As a result, today I think we’re a much more dynamic, multifaceted and market-relevant company, and this is validated by how much impact and traction we see with tdX and the proprietary AI-powered recommendation engine that’s integrated within (it).”
Another reason for the success of AudienceX, according to Wulfsohn, is the ability of management early on to “define a competitive strategy and to commit in a singular way to executing that strategy.”
Wulfsohn said he and Benaron saw that “the middle part of the market was being underserved by digital performance marketing companies” and decided to make that area their focus.
“The task of execution against that strategy inevitably shifts and evolves all the time,” he said “The market shifts, the technology shifts, the digital landscape shifts, but the underlying strategy remains the same.
“I think that one of the reasons we’ve been as successful as we have is because we have a commitment to a singular strategy year in and year out and look at the best ways that we can execute against that strategy,” he added.
