This week marks the one-year anniversary of the launch of Widgetbucks, the online ad network from Seattle-based startup Mpire. Founded in 2005, Mpire’s story makes for a pretty compelling case study in adapting to the market. Although the verdict isn’t in yet—we’ll see how much market share it ends up taking from Google ads, for instance—some early signs of success are apparent. Some 20,000 publishers and blogs use Widgetbucks. The ads get more than a billion impressions per month. And the network has the support of savvy investors like Ignition Partners and Draper Fisher Jurvetson, to the tune of $10 million they put in this past June.
Earlier this week, I had a chance to speak with Matt Hulett, the chairman and CEO of Mpire and the mastermind of Widgetbucks. He’s a fourth-generation Seattlite, was one of RealNetworks’ first 50 employees (“I was the RealPlayer”), and went on to be president of the corporate travel division at Expedia, a founding partner of Atom Films, and the president of Atom Entertainment (which sold to Viacom for $200 million in 2006).
First, I wanted to know how Hulett became involved with Mpire, and where the idea for Widgetbucks came from. Looking at his background, Hulett says, “I’ve picked things to work on that are ‘flanker’ brands. Corporate travel—why are you paying American Express $50, it should be free.” And indie alternatives to big, dumb Hollywood movies. “I like that kind of stuff,” he says. So taking on Google in the ad space is a natural fit for him.
Hulett started as a board member of Mpire (the founder is a friend of his). In the beginning, Mpire was trying to make it as an eBay seller-tool business. “It wasn’t doing well,” he says. “There wasn’t a market for it, but I loved the team. They asked me to come in.” That was 2006. “We started to do a comparison shopping site. But the way to get distribution, I thought, was to turn it into an ad network. Consumer websites, from an investment perspective—it’s hard because most investors won’t invest unless you get critical mass. The easiest way is not to drive traffic through Google, but to put my ads [on other sites]… I was running against time, I had to come up with an idea. I started working with eBay, and they liked the analytics we were doing to find the most popular products. We built really cool widgets for them, had a lot of success, got people bidding more. Voila—I thought that would work on other sites.”
That was early 2007. Hulett and his technical team launched the Widgetbucks ad network in October of that year. “We had no idea how it was going to do. We thought we’d get a couple hundred million impressions in the first 6 months. We hit that in the first 4 weeks,” he says. “Oh my gosh, we hit something.” The key, Hulett says, is that publishers want better ads. “We’d show the most popular products in each category—MP3 players, HDTVs, cameras…Our ads just look cool. We build rich media around smart technology.”
Widgetbucks’ ads are easy to set up, says Hulett, and they’re “smart.” Mpire’s software figures out “what are the right types of ads to show and when,” he explains. “In shopping, we’re checking the performance of our ads. We’ve just launched travel and local ads. We’re wiring up all these different kinds of advertising. The secret sauce is more ways to make money…We constantly monitor what kinds
