AdRoll Group is a nimble survivor in the shifting world of ad tech. Started in 2008 as a network that sold ads on specialized blogs, the firm morphed into a leader in retargeting, i.e. showing users ads for products they recently looked at but didn’t buy. By 2012, as AdRoll added more and more services, Inc. magazine ranked the company as America’s seventh-fastest-growing company. Then, last year, AdRoll Group surprised everyone by shedding businesses and restructuring itself into a pair of more focused units. We spoke to Scott Gifis, president of AdRoll, about the new business unit focused on marketing solutions for the Direct to Consumer economy.
Why the radical change?
I’m not sure I would call it radical as much as logical. We’d been too many things for many companies. Originally, we caught a great wave with retargeting. Then we built an AI-powered advertising platform and expanded into products like website personalization, measurement, and email marketing. Eventually, we realized we had to focus these technologies on solving specific problems for specific sets of customers or we’d risk choking on all the opportunities.
How did you pick from all those opportunities?
We did our research and spoke directly to our customers. What we found were two very exciting business opportunities where our tech has what it takes to address real pain points and be successful in the market. So we split into two separate units, each focused on a specific profile of customers: RollWorks, for B2B account-based marketing; and AdRoll, now focused on B2C marketing.
What did you stop doing?
On the B2C side we decided not to pursue enterprise customers. Nobody wants to turn away business, especially from your biggest customers, but we saw that larger companies required a level of sophistication and customization that would end up distracting our roadmap and pulling us away from our vision. It was not an easy choice, but it was an easy decision.
How has that worked out?
When we told our large customers that we’d no longer develop custom solutions, some found other providers. But many continued to use our platform. We suffered some losses but were able to more than compensate in the areas we made investments, and those investments are growing rapidly and are more profitable than before the split.
What’s been the impact on your employees?
There was a lot of change—some of it painful. We reduced our footprint in Japan and in Sydney, where the market was more enterprise-focused so that we could invest further in R&D. It was hard saying goodbye to some great people, but seeing the team embrace the changes—to understand the decisions we’d made and rally around the new vision—was inspiring.
What’s been your biggest learning?
A lot of great, important lessons—many very positive—some tough lessons too. Experience is that thing you get right after you need it. We underestimated how much work would go into the reorganization. For example, we didn’t realize how important it was to have consistent language for what we did. We knew it was important, we spent time, but we did not spend enough time. Nomenclature seems minor, but it bleeds into everything both internally and externally and can create misalignment. We were changing the way we talked about customer segments, teams, products, and more. We had some challenges with inconsistent processes and tools as we reorganized groups. We also discovered that parts of the company had developed different mechanisms for managing the sales process which creates a number of challenges across internal teams from Operations to Finance.
Hindsight is 20/20 so...
There is no mistaking the benefits we’ve gained from the decision. The two Business Units are thriving and the focus on the needs of specific customers has significantly improved the quality and velocity of our product roadmap and our business. That said, if I could do it again I would have spent more time identifying potential confusion points and communicating about terminology. I also would have changed even more to simplify aspects of the business that had grown up over time. If we’d taken time to really think through roles and responsibilities—and nomenclature—we could have moved a little bit faster and easier.