How to create targeted customer ads using zero-party data, with Dan Levin.

Hello and welcome to this episode of The Unnoticed Entrepreneur. Today we're going to the beautiful parts of America, Boston, Massachusetts, to talk with Dan Levin, who is the founder and COO of a company called ViralGains. For those of us that can see, he's actually got ViralGains on his t-shirt, which helps me to remember the company name. For those of you that can't see, it's a very fetching looking outfit he's wearing today. And Dan, we're going to talk about a number of things, but you've built a 9-figure business in the last decade in the advertising industry, and you've managed to take on big ad agencies and big tech to build a sustainable business. So you're going to tell us how you've done that and also how you have been able to market the brand to one group of customers and actually sell the product to another, and more besides. So Dan, welcome to The Unnoticed Entrepreneur.

Jim, thank you so much. It's always a pleasure.

It's a pleasure for me to be actually in your bedroom, Dan, with you. Don't— we better not tell anybody that's where we are, but in the best possible, in the best possible taste, this show. Dan, tell us about ViralGains and about what you're doing in advertising to help companies to market themselves to exactly the right audience.

Happy to. Yeah, so, you know, when it comes to advertising and marketing, there's the sort of half of the equation, which is always the creative, which is the strategy of, you know, what are we going to show to who and how's that going to look like? And at what stage are we influencing people in the buying journey? And then so there's this sort of creative part of it. And then when you get to the advertising piece of it, there's a ton of decisioning that needs to go into that equation. There's questions about, well, where are we going to serve, you Where are we going to serve our advertisements and our message? What kind of channels are we going to use? What levels of brand safety do we want? There's all these like sort of pieces of the puzzle, which are how often do you want to reach people over what timeframe or how you want to do it? One of the biggest, most important ones are is who you're actually reaching. So just knowing that you're reaching an individual that couldn't be more perfectly geared to receive that message. And so what ViralGains does is we're remarkably good and we've sort of built a business over the last 10 years. Of doing 2 things I'd say that are just core to ourselves. The first one is insights, and the second one is building audiences. And so I'll give you an ex— I'll give you sort of like a little bit of a fictitious example. It's like, what does all that mean? What are audiences? So imagine hypothetically if a company like Pampers were a client. And, you know, Pampers is a diaper brand, global but concentrated in the US. And, you know, Pampers could generically target, you know, let's say parents or people that they think are parents who might have little children. But if they wanted to go one level deeper and sort of understand, well, what's important when people are buying a diaper brand, they could use somebody like us. And what we do is we sort of, we drill down remarkably well to gather those insights. And we'll find out, okay, of those people that, you know, are are, are buying diapers, what's important to them? Is it the fact that it's soft to the touch? Is it that it prevents leaks? Is it that's eco-friendly? So maybe the sort of environmental impact of the diapers is important. And we deliver those insights back to the marketer and say, here's what's really important. But the magic comes in on what we do next. Not only do we deliver the insight of what was so important about this specific type of prospective end customer. But we say, now here's the audience. So we would then say, not only did we find out that the vast majority of your customers, and you might not have known this, care about eco-friendliness, but here's a million people now that in essence are people that are very much going to care about the environmental impact of diapers. And so you should have some messaging that speaks to that.

Dan, I have to ask you the question, In this day and age where, um, cookies are being blocked and where Apple iOS has come in and, and sort of removed some of the tracking, uh, elements— and I know we still have pixels that are going out in emails and so on— but how are you— how is ViralGains, if you like, curating this content and this audience and yet really remaining within, if you like, the, the framework of consumer confidentiality?

It's a great question. It's totally— by the way, for your audience, this wasn't even scripted because it's such a great question. It's just such an interesting question. And it's in our— everything is about our approach. So, we sort of call ourselves a zero-party data gathering engine for marketers. And when you think about it, there's different kinds of data. Everyone's familiar with first-party data, second-party data, third-party data. First-party data is is stuff that you have as a result of the interaction between, you know, your customer engaging in some capacity with your business. Second, I'll jump to third because second one's a little bit of a nuance. Third-party data is stuff that you would, you know, buy completely elsewhere about that consumer that you wouldn't have otherwise known. Second-party data is actually, it's interesting where companies that usually aren't competitive will meet with each other and say, hey, you have data about our customer, about— we have a Venn diagram of customers, of these ones in the middle. What do you know about them? What do I know about them? And we'll share that with each other. Zero-party data, which is what we do, is different, 'cause in all 3 of those instances that I mentioned, it's not always the case that the consumer wants you to have that data about them. Best example I'd probably have to say is Meta or Facebook. You're on Facebook trying to connect with grandma, trying to stay in touch with your old friends, and you're talking about, you know, what you're eating for breakfast. And all of a sudden Facebook's like, oh, you like Cheerios? Interesting. I see you posted a picture of Cheerios. And so I'm going to write this down as you are a Cheerio eater. And so the best example of it, why it's an example is because With a lot of first-party data that companies have, it's information that the consumers didn't necessarily want you to have, but they're okay with you having it because they realize it's part of the value exchange. When you buy something on Amazon, you don't want Amazon to know what your credit card information is, but you realize you have to give it to them, your address and your information anyways. You just wanted toilet paper and you had to tell them where you live. With zero-party data, which is what we do, is it's entirely consumer-volunteered information. So what we do is, you know, part of how we do the magic, there's some AI in the background that we could dive in if anyone wanted to, but we'll just keep that maybe for another day. But a lot of what we do, almost all of what we do is survey-based. So we actually will ask consumers directly and say, hey, What's important? Like, is Pampers your favorite diaper brand? Yes. No, I don't buy diapers. Oh, they don't buy diapers. Great. Why don't you buy diapers? I'm not a parent. My kids are too old. Someone else does. Oh, that's information. Pampers is my favorite diaper brand. Great. Galvanize those. You do buy diapers, but Pampers isn't your favorite diaper brand. Why? What's important to you in a diaper? And so we actually will ask consumers, and we do so in the context of advertising. And one of the things that we— this is why a lot of the clients that we work with love us is because we're not even asking them to do anything that they're not already doing. So, in the context of the advertising that runs, you could conceivably see a Pampers ad and in a really nice aesthetically UX/UI pleasing way, we'll see a little overlay that says, you know, would you like to volunteer some information or gather some more of your feedback? And so, it becomes what we call zero-party data, Incredibly high quality. We're not inferring something. Oh, they posted a Cheerios, so that means they eat Cheerios, or they're reading an article about trucks, so they probably like trucks and we should target them with truck ads. We say, stop all that creepy stuff. Just ask people. And so to your question, a lot of the stuff happening in the industry, especially on the privacy side, with a lot of privacy regulation, you know, I'm sure you've heard GDPR over in Europe and the EU and CCPA in the US and all these frameworks, most of them come down to the use of third-party data, and the sort of ethics behind how you sourced it. And for us, it's music to our ears, because this, like, we're sourcing it in the most ethical way, asking consumers, and they have the ultimate consent of deciding to volunteer information or not. If they want, we can delete the information we have about them.

Okay, so it's really useful to know, Dan, that That then people can still participate in sharing their preferences at scale, but in an anonymous way as well.

Absolutely.

That's really, really reassuring. And I think from what I can see, you've got over 100 of the Fortune 500 companies working with you. But here's the kicker, Dan, isn't it? Those end brands, and I don't know why we're fixated on toilet rolls and Pampers today, but we're, you know, big brands as well. You've got banks and cars and so on. Actually, they're not your customer, are they, in a way? Because you have a slightly more interesting dynamic than that. Do you want to just talk to us about the fact that you're marketing your company to one community and yet you're selling the services to another?

Absolutely. I think it's worth maybe just, you know, 30 seconds on sort of the existence of agencies because that's our customer. Our customers are ad agencies. They're coming to us on behalf of the marketer who's the brand. Now, we do do some brand direct as well. You know, some brands have in-house, they call them in-house agencies. They have that expertise themselves or they just like to do direct stuff. But— Our primary customer is the agency. And, you know, I think for anyone that doesn't quite know the landscape as intimately, it's like, well, it sounds like there's a middle person in between. And it's like, does that just seem inefficient? The answer is no. Agencies play an unbelievably important role. Imagine if you're Coca-Cola and you're trying to sell in 200 countries, and each of those countries has their own norms, their own rules, regulations about how you can speak about things. Just take the United States, just the US alone. You know, if you're talking about it, you know, if you're talking about Coca-Cola in the South versus the Northeast versus the Northwest, here you got to call it pop, here it's a social taboo to do this thing, and here it's not. You've seen some companies get in trouble here in the US with certain things. Now imagine multiplying that by 200, and for a multinational corporation, it's not feasible to know how to market in every single country, in every single city individually. And on top of that, to keep up with the technology like ours. You know, if you think about how many marketing technologies there are, there's a lot.

Yep.

And if you're a brand, you can't keep up with any of that. And so these agencies exist to sort of help with the strategy, to help with making sure you're doing the right things in the right markets, and also to field technologies like ours. So when someone like us comes up, in the market, they can take it back to the brand and say, hey, I found something cool. And so—

So there's agencies like WPP and Omnicom have got a role.

That's right.

But just explain to us, Dan, because, you know, you've entered the market as a startup, well, 10 years ago, and you've had to take on these bigger tech companies. And so just explain to us then how you've managed to get noticed by those really 2 different audiences that you've got, one of which needs to specify the use of ViralGains and one of which needs to actually commission and purchase from ViralGains.

That's right. It's interesting, the dynamic, because we have to get noticed on 2 fronts. We have to make our inroads with agencies, but there's always this saying that I'm sure you've heard, something like, no one's ever gotten fired for buying IBM or for doing these things and that. And we're not IBM, 'cause what happens is the agency will say, hey, I love you guys. I think this is remarkably interesting. And then they'll say, you know, we can take it to the brand and say, hey, we've got this program that we recommend and we think we should use ViralGains for a lot of the insights to audience piece of it. It's very interesting. And the brand's like, who? Is that, did you say Google? It's like, oh, I said ViralGains. It's like, Yeah, just, it's my job on the line because now the agency, you have the marketer and they report to the CMO potentially and they're like, if I haven't heard of it, I don't want to do that. And so we realized early on that we have this sort of, we have to make sure that we're noticed across all fronts, but there's a sensitivity. You have to be sensitive when there's these sort of structures in place because The agency does so much. What happens is it makes their job harder if you've got a million vendors selling, trying to sell directly to brands because the agency's there to make sure everything fits. It's a puzzle, like a nice puzzle piece and everything's clear. When one of those puzzles is making their way over to the brand by itself and things don't fit anymore, it's a problem. And so what we do is we spend a lot of time doing certain things like going to the conferences that brands go to and making sure our ads are in front of them, but not anything beyond what I would say is the awareness stage. Like we basically have a very clear understanding of what is awareness and how do you make that happen? How many touchpoints is it? Which sponsorships is it? You sponsor the coffee cup or the lanyard or the certain, all these different things. And the goal there is to make sure that if there is someone, because this wasn't intuitive for us at first, we were selling to the agencies and we were marketing to the agencies and our win rates were not what they should be. And it really, it's interesting if you're the kind of business that you have an end person that's really the decision maker and they haven't heard of you, It's their job on the line. And so your goal is to— you have to have 2 different marketing strategies. You really do. You have to find out where is this customer and where is that customer. And you have to spend an equal amount of time making sure that they, by the time it gets to you, they've heard of you. And I want to tell you a really funny story that I learned from one of my mentors and investors. And he shared the story when he was raising his round of venture capital. Same problem, unnoticed. You know, VC world, it's very much like who you are, who you are. It's very much like, have I heard of you? Have I not heard of you? He had the most clever idea. He realized that all the investors that were investing in his space were in like Menlo Park in California, like in this like small region. And what he did was he bought out the main billboards in the airport that specifically they fly out of. And when he was doing this deal with sort of airlines, they're like, oh, because it'll be Clear Channel or it'll be someone that sort of owns a bunch of billboards. Like, you want a bunch of airports or you want to be around the country? He was like, no, I want 2 billboards in just this airport and I want only these ones. And then what he would do is he would get the same— he's here local in Boston. He got 2 billboards here in Boston. So, he's only paying for just 4 billboards.

Wow.

But when he did this for like 6 months, and then eventually he invited the— when he was seeking around, he invited these VCs from Menlo to come meet with him. And when they met with him, they said one phrase that he said he'll never forget. They go, I've seen you guys everywhere. I don't even know where I've seen you, but I feel like every time I go somewhere, you're everywhere. And what he did was psychologically trick them. Even when they're going to Texas or Florida or the UK or the EU, anywhere in the world, they constantly were going out of that airport and subconsciously seeing his logo, seeing his company's name. And he extra did it when they— and he only did it for a week. He only bought a billboard in Boston for just that one week. So, they flew in and even if they didn't notice it, as they came in, they're like, yeah, we've got to talk to you guys. You're everywhere. And he said, it cost me like pennies of the pennies of the dollar that it would've cost otherwise. And what I loved about that story and I took away from it was how clever it was. It was just like, if you know where the person's gonna be and you know where they spend a lot of their time, you can actually cut out a lot of the stuff that's not gonna work. And it, it is a little bit of clever psychological engineering. And I've been using that strategy ever since. It's a little bit clever, but also it's just, it's efficient. What are you going to do, buy a billboard in the middle of the ocean?

Why would you do that? Yeah, no, Dan, I love that idea of being very targeted. There used to be a company that made broadcast antennae and they would buy the advert just in the local town of where they wanted to sell a radio mast to the local radio station for nowhere else. And so, but they seemed ubiquitous to the person in that town because that person didn't read anything else. So a great psychological game.

Exactly.

Dan, you know, on this show, I also like to ask people to help us feel a bit better about ourselves. Anything that you as a successful entrepreneur has done that didn't work, is there anything that you can share that from a marketing perspective for Viral Gains, you kind of, you wouldn't recommend people to try or that you wouldn't do again?

Oh, that didn't work. Yeah.

And that's a difficult question, this one, but useful to know what doesn't work because we often learn as much from people's and our own failures as we do from people's successes.

Yeah, it's interesting. I mean, I sort of already shared a little bit of that, which is I would roll it up. Into a broad lesson for me of, let's call it, I don't know if it's sensitivity, but it's empathy. It's a little bit of EQ. And in this case, what I mentioned was when we would try to sell around, we have 2 decision makers, very important, and you got to treat them both as equally important. And we weren't doing this out of just some malice. We just didn't understand. We were early on in the space. But I think in all the marketing that we do, We always just, I mean, we do 2 things and in some ways it almost sounds oversimplified. But the first thing I said is kind of, it's like, and it's funny because it's the irony is because what we do is being really specific to what is the thing that's gonna be the end sale. So just like for Pampers, I know toilet paper or diapers.

I'm going back a bit. I think you also mentioned about product market fit. I think we were talking before we started recording about building a product and trying to sell a product that was a bundle and, and that actually wasn't quite the right market for— perhaps you just take a minute, not too long on that, but because you talked about the sensitivities, that's great, but I'd love you just to talk about trying to sell someone something that they don't want to buy. Just talk to us briefly about that.

I love that. I love that question. It was less about the marketing that we were doing and more so just about, um, I guess you could say it's connected. Yeah, so early on, evolution of viral gains, right? It's not that for the last 10 years we've been doing exactly the same thing in exactly the same way. That would take some, quite some foresight in a space that moves and evolves, and you've gotta evolve with it. So, yeah, early on we were trying to do multiple things That— the best way to put it is you could say it almost like trying to chase 2 rabbits, but in some ways, you know, we had a secret sauce. Our secret sauce was always the insights and the audiences, which is why it so rolls off my tongue now, but it wasn't always the case. We used to also do another thing. We used to operate as a demand-side platform, and we don't have to dig too much into that, but it's basically like a big marketplace that facilitates the sort of algorithmic automatic buying and selling of media. And we had this demand-side platform. And we had layered on top of it our secret sauce of generating audiences and insights. And the problem was that the majority of our customers already had a demand-side platform of choice. And so the best way I would describe it is like, we had this bundle. And we had this bundle of stuff that we sold, this products and services, products and we would say, you've got to buy this. So I got to buy this thing. And they'd look at it and they go, well, I already have this part of it myself. And we're like, yeah, yeah. Well, replace yours with ours because we have this great bundle. And it worked in certain instances and didn't work in others. And again, I'm explaining it in such a simple way that in hindsight, it seems like, did you not realize this sooner? It's like when you're in it, It's just not as clear because you've spent so much time building all the connections between the things, your literature, the way you sell, the product itself, the technology, the way you service it. You know, everybody in the organization understands you do the thing. And it was palatable to the innovators and the early adopters. But to go beyond that, to get the majority of folks to use it, We had to do what we thought at the time was unthinkable. We had to take this baby of ours. Well, that's a terrible analogy. We had to take this thing of ours that we had.

As we're going back to Pampers. Yeah, I was gonna say we had to chop it in half.

Basically, we had to bifurcate the two. We had to deprecate a part of what we did because it wasn't our secret sauce. And so the conversation, it transitioned from this. Hey, would you like to buy our audiences in DSP? It's like, I already have a DSP. It's like, well, replace yours with ours. It's like, well, let me think about it and I'll get back to you forever. To, hey, we've got this thing. And they go, oh, but I already use this DSP. We'll go, oh, that's great. We don't even— like, we actually sit on top of any DSP. We work complementary to your DSP. They go, oh.

And Dan, I, I love that. I'm gonna, I'm gonna start to move you on because as we agreed before this, I'm gonna try and keep us into our timeframe. But I get— but the idea of, if you like, listening and not trying to sell people something they don't want to buy from you that, that you're keen to sell, but selling them what they want to buy.

And it's the classic case of not chasing 2 rabbits.

That's what it is.

Yeah, it's just a classic chase. If you try to chase 2 rabbits, you'll catch neither one of them. So you want to be the best in the world at doing one Yes, Google now has Gmail, they have, you know, Android, they have all these wonderful things, but they didn't start out that way. They have Chrome, whatever. They started out being the best in the world at search. That's it. And they dominated that. And then they said, is there something we could do? When you enter into anything and you say, I'm gonna try to do jack of all trades, and you're not the best in the world at any one of those, you get commoditized.

Dan Levin, you are plainly the best in the world at helping brands connect with their audiences. How can people get hold of you and ViralGains?

Oh, you know, I'm like an open book. So D Levin, so first initial, last name at viralgains.com. Go through our website, find us on social. I mean, there's If you can't find us, right, uh, that'd be crazy.

It's just— All right. And presumably if you get a popup saying, are you interested in Pampers, uh, we'll, we'll just write in, yes, please tell Dan I said hi. Dan, thank you so much for joining me from, from Boston today.

It was a pleasure. It was really a pleasure. Thank you for having me.

Wonderful. As you said before we started recording, we could have gone on for much longer, but you know, I try and keep these shows down to 20 minutes or a little bit more. We've gone over today a bit. So thank you for staying with us. It's been Mr. Dan Levin, and I will put his details in the show notes. Thank you very much for joining, uh, me, Jim James, here in the UK. If you've enjoyed this and learned something, do please share it with a fellow unnoticed entrepreneur. And if you have the chance to rate it on your player, that also really helps. And until we mic again, just encourage you to keep on communicating. Thank you for listening.