Wednesday, January 11, 2006

Interview with Nick Grouf, Co-Founder, Spot Runner

My interview this morning is with Nick Grouf, co-founder, chairman, and CEO of Spot Runner (www.spotrunner.com), a new firm that is bringing an Internet twist to the television advertising market. Grouf and co-founder David Waxman were founders of Firefly (acquired by Microsoft) and PeoplePC (IPO and acquisition by Earthlink). Spot Runner is launching its services today.

BK: What's Spot Runner, and how does it fit into the local search market?

NG: Spot Runner is the first Internet-based ad agency that makes it easy and affordable for local businesses to advertise on TV. With Spot Runner's revolutionary approach to commercial production, media planning and media buying services, local businesses now have access to a powerful marketing tool that was previously out of their reach. Advertisers can choose from a comprehensive library of professionally produced ads that can be viewed, purchased and personalized in a simple process online at www.spotrunner.com. With its proprietary media planning engine, Spot Runner also creates customized media plans by using some basic information entered by the advertiser, such as their industry and budget. The entire process, which can traditionally take months and hundreds of thousands of dollars, now takes just days and a fraction of the cost. Spot Runner manages each account by securing the ad buy, placing and tracking the ads, and analyzing viewership and demographic information. All of it is available online at www.spotrunner.com.

BK: How is Spot Runner backed, and when did you raise your venture round?

NG: Spot Runner is backed by a highly respected group of investors, including Index Ventures and Battery Ventures. We raised our Series A round in early 2005.

BK: What is the background of the founders, and why did you decide to start the company?

NG: David Waxman, Spot Runner co-founder, and I first joined forces in 1995 to create Firefly Network, Inc., which was acquired by Microsoft in 1998 and the Firefly Passport became the Microsoft Passport. Next, we launched PeoplePC, Inc., which went public in 2000 and was acquired by EarthLink, Inc. in 2002. All of the companies we've founded have had one overriding principle: harnessing the democratizing power of the Internet. Spot Runner continues that tradition by utilizing the Internet to give local businesses the benefit of the same powerful marketing tools previously available only to large national businesses.

We recognized the tremendous opportunity in providing the 11 million local businesses in the U.S. with advertising services that large ad agencies don't currently provide. This segment has historically been underserved by ad agencies because they believe local businesses' budgets are too limited, and local cable and broadcast TV is too time-consuming to reach - it would take as many as 9,000 local cable ad buys to reach the entire country. At the same time, local businesses avoid TV advertising because they believe it's too expensive. Traditionally, it would take weeks or months - and at least tens of thousands of dollars - to produce a commercial and then get it on air. To fill this void, we assembled a plan that would leverage our Internet expertise and tap into the potential of this market, and Spot Runner was born.

BK: What kinds of customers are you targeting with SpotRunner?

NG: Any local business that wants to attract more customers can use Spot Runner's services. We already have a broad range of clients - from law firms, dentists, hair salons, employment agencies, real estate brokers, flower shops and retailers to doggie day care centers and even a surfboard manufacturer. Historically, high-quality TV advertising has been the exclusive domain of the Fortune 500 companies because it was too expensive, time-consuming and difficult for local businesses. Now, with Spot Runner's innovative Web-based program, TV advertising is open to businesses of all sizes.

BK: Where are you in launch, and do you have any customers yet for the company?

NG: We launched Spot Runner on January 11 and it is now available to everyone at www.spotrunner.com. Prior to this, we introduced Spot Runner's services to a select audience. In doing so, we discovered an enormous pent-up demand. Up until now, local businesses didn't have an easy and affordable way to advertise on TV. Local businesses have been amazed to discover that they can create a comprehensive advertising campaign - including commercial production, media planning and ad time - in less than a week and for as little as $500.

BK: Why the TV space -- when it seems like everyone seems to be moving toward the Internet for local search?

NG: Television is the most powerful advertising medium in the world. The average American spends half of their leisure time watching TV - twice as much time as listening to the radio and almost four times as much as reading the newspaper. Television also has the ability to capture people's attention more strongly than any other advertising vehicle. TV has an aura of importance that enhances an advertiser's image and prestige. By offering a dynamic message that incorporates sight and sound, motion and emotion, TV advertising has the ability to generate trust and excitement better than any other medium.

BK: Thanks!