Sokrati: Optimizing Online Ads
By Punetech 

So you have a product / service to sell online and you are looking to place the advertisement. You pull out your plastic to pay for your message to be shown on reputed ad platforms like Google AdWords and wait for the commerce that may or may not follow. Wait! There is a Pune based Start-up Sokrati which is all about providing ‘one platform for your Digital Marketing needs’.

Sokrati is a company that provides technology and services to merchants on the web for automated optimization of the placements of their online ads. Any business will have anxious moments when the competition augments and those responsible will start to wonder where exactly to place ads, and what kinds of ads to go for to get maximum conversions. The Sokrati Founder Team, viz. Ashish Mehta, Santosh Gannavarapu, and Anubhav Sonthalia went about to found a company to alleviate just this fear. They were all previously working for Amazon in Seattle, USA, but then quit to form Sokrati, and moved to India about 3 years ago.

Initially, in the pre-Sokrati years, they managed the Paid Marketing for Amazon from business & technology perspective. They observed that Paid Search Marketing (and Online Marketing in general) is very tricky platform for advertisers with dynamic content on their website – typically catalogue based Advertisers in Shopping, Travel or Classifieds domain. The established players like Marin Software, Efficient Frontier or Kenshoo were not really on the spot with solutions there.

The core group had some ideas on how to make it work for advertisers in these domains and started working on this in November 2007 while they were still job-bound. Under the label of an Amazon Affiliate they spent all their spare time to build a proof-of-concept model.  Before a year had passed they had driven incremental revenue of $20 million to Amazon – and this was just from the simple PoC they had conceived away from their routine. The rest is, well, History.

In Dec 2008 they broke out of the corporate cubicle and landed in Pune to build a more production-ready, more sharp and sophisticated technology. The basic rudiments haven’t changed, the idea is the same, and so is the focus. But they continue to take feedback from clients and build product extensions to entail a larger piece of a more unified Digital Marketing & Analytics.

If you still think the stuff is hazy, look at this case. The client here is a prominent jobs portal in India. The client was managing Paid Search Campaigns (i.e. buying of search ads on Google and other search engines) in-house, incurring heavy spends. The key issue was – for the trailing 1 year or so, performance had started to plateau and there wasn’t much momentum in the campaigns. Scaling the campaigns with a controlled Cost-per-Action was getting very challenging & difficult for the client. And while experimenting various ways (mostly manual), the campaign structure + quality of keywords were just getting worse by the time. Sokrati helped the advertiser ramp up their volumes by almost 2x within 8 weeks of campaign management by Sokrati.

The basic approach Sokrati took was to use Sokrati’s proprietary data mining & clustering algorithms to generate extensive set of keywords (from about 68000 to roughly 1.5 million) & very targeted ads. This allowed a lowering of CPCs (cost-per-click) & improved relevancy – eventually leading to better CPAs (cost-per-action) & higher volumes. This combined with real-time optimizations leveraging decay-rate algorithms has helped lower the overall CPA by 25% without sacrificing on any of the volumes. In other words, to get exactly the same amount of resumes, it cost the client 25% less in ad spending using Sokrati’s algorithms.

Another value addition here was in the form of the ability to track beyond “binary” conversion flag. Sokrati’s proprietary tracking system is able to capture several more conversion parameters. For example, before Sokrati, the client was measuring only the number of resumes and the amount incurred to acquire them. Now, with Sokrati tracking, they are able to track the quality of the resume – whether it was an IT or Bank related; whether it’s a Fresher or had 5+ years experience. Not only that, the advertiser is now able to provide differential ROI targets for different “mix” of conversions; and Sokrati is able to optimize the mix in real-time.

So what Technology Stack is in use here?  They use Ruby-on-Rails for the front end and have Linux +  MySQL  + Java on the backend. The cloud is used quite extensively and they have close to 50 servers now, all hosted on Amazon EC2 (US & Singapore). They did evaluate a few vendors in India – but didn’t find anything interesting or as reliable. Asked about the talent pool in Pune and the difficulties of hiring, Ashish Mehta the CEO and co-founder says: “Hiring has always been a challenge & I don’t think, it’s a function of Pune specifically, but India overall. Though we’ve been very fortunate to get the key senior members of the team that are like-minded and truly start-up oriented, it has been lot slower than we would have liked. For example getting talent with data mining or machine learning skill-set is a struggle. We have interviewed over 100+ candidates but still haven’t been able to fulfill the positions; and have a long list of open head-counts in the company.”

Ashish is quite conscious of the status of being a start-up. “Our start-up stint has just begun and there will be many things that we will learn either upfront or by failing over the next few years.”  But he says that he would like to share a couple of facts he learned while on the job here.   The first is related to fund-raising. “One key learning that I’d like to share is to not procrastinate on raising funds. Once a start-up feels they are ready to raise funds or think they “need” to raise funds to grow faster (and only IF they feel so) – then the founders should not delay this process. As the funds will provide the stimulus to exponentially grow faster. I think we could have raised funds about 6 months back by being more aggressive but we let it take its own sweet time. In the internet world, where competition is so cut-throat & landscape so dynamic, even a small delay or a few missed opportunities could prove to be very fatal.

Ashish also thinks that Customer-service and Customer-feedback are priority items on the list of any entrepreneur. “Customer Servicing & listening to their feedback is ultra-important. Coming from Amazon, we ingrained this idea directly & indirectly, on how to value each and every feedback from customer (big or small). But we’ve experienced that several start-ups, especially in India, are so obsessed with their product / services that they tend to overlook this aspect of the business. It’s very vital to put yourselves into the customers’ shoes while building the product.”

Looks like the Sokrati team is here to lead, to teach and to perform, it’s no wonder that they are the recipients of Series A funding from Inventus Capital Partners. They haven’t disclosed the amount so far, but this funding is sure to help them grow multi-fold in the years to come.

Check them out at sokrati.com

(In Techgoss syndication arrangement with Punetech )