Click2Net’s Adam Simpson on Building a 50,000 Site Strong Online Ad Network

CEO Adam Simpson was only 18 when he launched online ad network Click2Net in May 1998 with a couple of thousand dollars from his parents. By the end of his first month in business, the network had signed up 300 little sites and was serving about 30,000 ads a day. These days Click2Net has alliances with more than 50,000 sites and serves up about 900 million ads a month. And Adam says, “Now I feel like I’m 30 years old.”

We called up this old guy last week at his headquarters outside Toronto.

Q: 50,000 sites! How did you get so many sites signed up for your network? Are they all teeny?

Simpson: We compete in the mid-range market -- we rep the up and coming ones. Fitness.com, Interview.com and Waterski.com…. We don’t have exclusive arrangements with sites, you use us at your will wherever you want.

They like us because of the fact that we’re non-exclusive and we have useful technology. They can block ads they don’t want on their site all by themselves. They can see what ads are doing well on their site. They can see what operating systems and browsers are doing well on their site. We provide a wealth of information to them.

Being around for two years helps. Sites know that we pay. They know we aren’t going to go away. That our software works and it’s reliable (some others are flaky.) Unreliable software can deter a potential customer, they think, “How do I know I’m actually getting paid for what I should be? How do I know you weren’t down when I was sleeping last night?” With our system, you can see hourly reports. You can check counts for last night at 2am if you want.

We haven’t done much active outbound recruiting in over a year-- we don’t have to anymore. Our site recruiters get like 20 calls a day.

We have started recruiting sites to add to some of our categories. For example, someone came to us with an ad they wanted to run on gay and lesbian web sites. We didn’t have many in the network so the AE walked over to development people and said ‘Guys I need these sites’ and they said ‘ok, we’ll have them for you in a week.’ We never did that until 3 months ago, but it’s getting more competitive out there.

Q: Let’s talk trade shows. Your competitors are spending substantial sums marketing at them. What are you doing at trade shows to market yourself?

Simpson: We do about 19 trade shows a year. InternetWorld 2000, all the AdTechs, the DMA’s NetMarketing conference in Sept … all the major industry trade shows. We create a lot of business that way.

I find those huge gigantic booths with four levels that people spent a ½ million on crazy. Ridiculous! Attendees going by figure there’s 50 people standing here who are all making $6 hour and ‘how can these people know enough to help me?’ When I go to a show I stand in our booth and people come up and say ‘Oh you’re the CEO, rather than some Joe Schmoe who has absolutely no idea what goes on day-to- day at Click2Net.”

Q: What do you do when you run into your competitors at shows?

Simpson: I talk to the CEOs, ask them ‘What’s working with you guys?” I think there will be a lot of consolidation going on in the next few years; so, we’re all friendly to each other because who knows what’s going to happen?

Q: Has anyone tried to buy you?

Simpson: We’ve a lot of people approach us. None of them have panned out. There are some we have sitting on the list … we’ll talk more in a few months sort of thing. We’re trying to go out on our own right now because we see so much potential. It’s a big market out there. I kind of relate it to the software industry of 1980s there were millions of small 5-20 people companies building all kinds of software; and then companies like Microsoft came along began acquiring companies with niche products. A lot of our competitors don’t deliver what they say they’re going to. I don’t think they are all in it for the long haul.

Q: Your network’s only option is CPC. Why don’t you offer CPM?

Simpson: We don’t offer CPM right now, because we have so many small sites. Marketers don’t want to say, ‘Let’s do 40,000 at this CPM rate and half a million there at this CPM.’ They say, ‘I have a budget. It’s $10,000. I want to reach people who are into online videogames.’ We’ll guarantee you those clicks during this time period.

Q: We’ve heard you’re expanding into the Far East. What’s up there?

Simpson: When we were at the Singapore Communication 2000 show, we did an hour-long call-in radio show on how to market yourself on the Internet … how to take a raditional company online successfully. There was a lot of interest. So we used a recruitment firm based in San Francisco and Asia to hire someone to lead the Asian business. It was tough, it took 3-4 months and we went through a lot of candidates before we found her.

You have to realize we’ve been international from the start. Canada was never a focus for us. At the time we started, the US was everything for us. Now Europe and Asia are the next focus. Canada’s still behind the States but it’s been catching up in past year or so.

We have account managers here who work from 12am-8am to work with other time zones. Our tech people are on call all the time with wireless emailers.

Q: Are you considering starting an affiliate program to get more media buying accounts?

Simpson: We’re adding a referral program for sites. We already do that a lot when talking to big sites, we say, ‘tell your friends to come too.’ But I don’t think referrals work well with advertisers. They’re more if it works they tell their friends. They’re at a bar and they tell people, it just kind of snowballs. That’s this business.