This AdTech Startup Makes $5 Million a Year Via Games, Quizzes, and Contests
Jebbit co-founders Tom Coburn, 26, and Jonathan Lacoste, 24, launched Jebbit while students at Boston College.
PHOTO CREDIT: Getty Images
There's a Seinfeld episode in which Kramer, pretending to be the Moviefone guy, directs unsuspecting callers to punch into their keypads the titles of films. Unable to guess what they've typed, he blurts out: "Why don't you just tell me the name of the movie you've selected?"
That, in essence, is the business model of Jebbit. The company helps brands offer mobile experiences that prompt consumers to answer direct questions about what they're looking for in a product or service. Such information gathered by brands directly from customers--known as "declared" data--is more accurate than purchased data that infers consumer preferences by tracking their online behavior. Voluntarily surrendered, it also mitigates privacy concerns and eliminates the "creepy" sensation of being stalked online by faceless marketers, say Jebbit's founders.
Those founders are Tom Coburn, 26, and Jonathan Lacoste, 24, who launched Jebbit in 2011 while students at Boston College. (A third founder, Chase McAleese, left the company.) The business, which is in the process of locating to Boston's chic Newberry Street, employs close to 50 people and expects to double that number over 18 months. It has raised slightly more than $10 million, with revenues north of $5 million.
Jebbit is "very good at knowing why a consumer would opt in and declare their data," says Paul Falzone, whose Manifest Investment Partners led Jebbit's Series A round in August. "And they know that the enterprise can make much better marketing decisions and know their customers far better. That's why they're succeeding."
Running from ads
Like most college students, Coburn and Lacoste spent a lot of time online--much of it dodging advertising. "One of those 30-second pre-roll video ads would appear as we were trying to watch Hulu, and our first instinct was to open a new tab and check up on Facebook while it played," says Lacoste. Coburn came up with an idea to help brands increase consumer engagement and, with Lacoste and McAleese, submitted it to B.C.'s business plan competition. They tied for first place.
After that "we probably would have gone back home and got summer jobs," says Lacoste. But among the competition's judges was a partner at venture firm Highpoint Capital Partners, who offered them office space and introductions to other entrepreneurs and investors. Early in 2013 the three dropped out of school and were accepted into Techstars in Boston. They hired seven employees. All 10 moved into a house in the suburb of Brookline.
Jebbit's original business model, which it deployed with early customers like Bose, was a destination site that targeted college students willing to read content about a brand and then answer questions about it in exchange for money: 25 cents for each correct response. "It was almost like a weird digital scavenger hunt where the student would go browsing for the information," says Lacoste. With that first iteration Jebbit earned a couple of hundred thousand dollars, recruited some angel investors, and raised a first round of capital.
But with few customers represented on the site, student incentives--and interest--were limited. Plus, paying people to hang out with your brand is not an optimal marketing strategy. Anxious to rethink their approach, Coburn and Lacoste sought help from the large network they'd nurtured assiduously since college days, when they'd begun meeting with mentors and advisors almost every weeknight and weekend.
Two key suggestions emerged from that network: adopt a software-as-a-service model and focus strictly on mobile. Jebbit struggled for two years while it pivoted the business model and completely revamped its technology. The new emphasis was on providing interactive experiences--things like quizzes and fashion lookbooks--that prompt consumers to share, for example, their vacation dream spot or what size shoe they wear. Such primary source intelligence, Jebbit reasoned, was far more valuable than the third-party data for which many brands pay millions.
Ask and ye shall receive
The new iteration launched in 2015. An early customer was Cathay Pacific Airways, which has used the Jebbit platform to create interactive quizzes, photo galleries of destinations, and contests showcasing in-flight products. "Through the content the audience lets us know their travel preferences and amenities they're drawn to," says Robecta Ma, vice president of marketing for the Americas. "It's an opportunity to learn more about the emotional aspects of the customers that we don't usually capture.
"The efficiency and ease of using the product," says Ma, "makes it very appealing to work with them."
Today, Jebbit works with around 80 brands, chiefly in the ecommerce, travel, media, and sports sectors. Customers include eBay, NBC, Expedia and several NFL and NBA teams. In September the business launched a partnership with Snapchat to collect declared data for its advertisers. It plans to open a San Francisco office in 2018.
Lacoste says he and Coburn "are not nave" to consolidation in the industry and have been approached by potential acquirers. For now though, he says, "we are excited about just building something and seeing where it can go."