Field Reports14 Jan, 2010 By: Thomas Haire Response
Zadspace Delivers Marketers’ Messages to Consumers’ Hands
By Jacqueline Renfrow ([email protected])
Gaining recognition in the DR industry as “the guys that slap stickers on boxes,” co-founders Todd Outten, CEO, and James Ho, vice president of products, are rounding out four years of testing and tweaking that led to the recent successful widespread launch of Zadspace Inc. Based in El Segundo, Calif., the idea behind the venture-capitalist start up, which started in January 2006, was the development of a fresh and innovative way for marketers to reach consumers using a new form of DR that utilizes the exterior of delivery packages for targeted messages. Currently working with advertisers such as ADT, Broadview, The Wall Street Journal, DirecTV, Jitterbug, PetCareRx and Omaha Steaks, Zadspace is able to ship 1 million “Zads” a month via package distribution.
Q: How did the idea of Zadspace come about?
A: Todd Outten: James Ho and I originally started an E-tailing company. We were looking for a marketing plan that offered a fresh and innovative way to reach consumers. We looked at all types of channels, and we wanted to know how to reach the consumer and provide them with a relevant offer at the right place and the right time. Zadspace has a unique characteristic in that it delivers a message literally into the hands of someone interested in our messaging. So we ditched the E-tailing, and the rest is history. We spent the first two years getting patents, developing the technology and speaking with direct response marketers to get early feedback.
Q: What can Zadspace do for its clients in the DR space that sets it apart from the competition?
A: One thing that makes us unique is that we are reaching the consumer in a fresh way, and it’s resonating. We can personalize the message. Also, we’re highly targeted — we can reach a consumer based on a set of criteria. It’s about getting the message to the right person and the right place and the right time, not wasting impressions on people not interested in the offer. The other thing that is really important in direct response industry is that our message is trackable. Our clients get measured results back and they are able to optimize their campaigns in real time — driving the ROI they need in order to be successful. If the targeted demographic isn’t working, we can change the demographic immediately and alter the campaign. We’ve taken the flexibility and real-time nature of an Internet campaign and brought it to the physical medium.
Q: Who are the partners and customers at Zadspace?
A: Beyond the advertising partners already mentioned, we’ve been getting a lot of interest lately in national franchise brands that have local stores. One of the things we have that they want is geo-targeting around a franchise location. They can offer good coupons and soft offers that are relevant to people. We also have distribution partners that we work with. They are companies that have taken an order from a consumer and as a result, they are sending them a package. This includes infomercial companies, catalog companies and E-tailers.
Q: What bumps have you encountered launching the platform and what have you learned from them?
A: The biggest thing we learned is the DR mantra — test everything, test again, and continue to test, reducing the moving parts as you are testing. Another thing we learned is that we had really good investors, who allowed us the capital and the time to do it right. Warehouse operations and logistics are a very precise science, and they operate at a high performance level. So in order to gain and win their trust that our technology could operate alongside theirs, and at that level of efficiency, we had to prove ourselves.
Q: How has the economy affected Zadspace and its partners?
A: If you look at the historical trends during the past 50 years, and the past seven recessions, direct mail spend has increased year-over-year since it started being measured because it is a viable channel. Because of the economy, people are more careful where they spend their marketing money, and it tends to be more ROI-focused. From our standpoint, because this is new and unique and today it’s much harder to attract new customers, we’re seeing advertisers step up to the plate faster than we expected. It’s a positive impact at this stage.
Q: What does the future hold for Zadspace?
A: Right now, we have come out of these market trials with evidence that suggests it’s a viable medium, and direct response marketers are coming to use it and coming back for more. In 2010, we will continue to get the message out and grow to the capacity of the network. Each month, we grow the number of boxes we ship. We expect to see growth on both sides. In addition, we recently opened an office in New York to be closer to a lot of the catalog companies, which is big traction for us. Plus, a lot of money spent on direct marketing comes out of the Northeast. Brick-and-mortars are not having the best time in the world, but online sales continue to grow. So that translates to more packages being shipped and more business.