This is the sixth in a series of profiles of companies emerging this summer from Mountain View, CA-based startup incubator Y Combinator.
AdGrok is at an interesting point in its evolution as a startup. Right now, the company is probably better known for a series of controversial blog posts by its CEO, Antonio Garcia-Martinez, than for its actual product.
AdGrok has developed a browser-based tool that helps small businesses grapple with the complexities of managing search engine marketing campaigns. In essence, it’s a user-friendly front end for Google’s AdWords platform, the system that the company uses to sell ads on search result pages. Considering that 1) Google earns close to $30 billion a year on AdWords ads, 2) those ads presumably generate much more business than that for the companies who place them, 3) anybody who advertises through AdWords has to cope with its notoriously clunky user interface, there could be a huge market for AdGrok’s service.
But you wouldn’t learn any of that from Garcia-Martinez’s posts, which have focused on such subjects as the spiritual poverty of the “quant” lifestyle at Goldman Sachs (that one prompted 109 comments and 539 “Likes” on Facebook), New York City’s shortcomings as a technology hub (278 comments, 814 likes), and the precise amount of money a young startup entrepreneur would have to earn on his company’s exit if he wanted enough “fuck-you money” to retire at age 30 (35 comments, 72 likes, and the answer was $4.2 million). The posts have been widely tweeted and retweeted over the last month and have generated hundreds of heated responses at forums such as Y Combinator’s Hacker News.
I wasn’t too surprised when Garcia-Martinez confessed to me this week that he studied journalism in college—the posts wouldn’t be nearly as provocative if they weren’t so well written. And there’s actually more cunning to his blogging strategy than you might imagine. The posts have drawn thousands of visitors who never would have discovered AdGrok’s website otherwise, without costing AdGrok a dime. “We got a lot of free PR based on my blog post about New York City,” he says. “It was like, whoosh—tens of thousands of page views and lots of signups.”
So maybe handing a blog to a literary-leaning CEO who’s given to “grandiose propositions” (Garcia-Martinez’s term, not mine) is a pretty good way to advertise a startup that’s all about advertising. To hear Garcia-Martinez tell it, AdWords customers are victims of a profound lack of innovation at Google, and AdGrok is just the company to solve the problem.
Google didn’t invent keyword-based search advertising, but it did introduce two very useful twists. One was relevance: you can’t get your ad to show up on a search-result page simply by bidding for certain keywords; it also has to meet Google’s criteria for relevance to the user. The other innovation was to get rid of the traditional ad sales force and automate the whole process of creating ad campaigns and bidding for placement.
“Bob the smiling ad sales guy was gone—you could now log in with a credit card and do your thing and be online quickly,” says Garcia-Martinez. “But the reality is that they just substituted one middleman for another. They got rid of the sales guy, but now you need a professional campaign manager. It’s very complicated, and the average mom-and-pop e-commerce site just doesn’t have time to duke it out with the pros on AdWords.”
Garcia-Martinez and his co-founders at AdGrok, Matthew McEachen and Argyris Zymnis, know how uneven the playing field is: they used to work together developing search engine marketing platforms for big-budget customers at Adchemy, the Foster City, CA-based digital marketing agency. Platforms like Adchemy’s free users from dealing directly with AdWords, but mom and pop have to cope with a user interface that Garcia-Martinez derides as “craptacular….It just sucks. Google can get away with it, because they are basically a monopoly. They aren’t motivated to change the interface because they don’t need to.”
But that doesn’t mean there aren’t users who would pay for something better—perhaps enough of them to provide a tidy revenue stream for the right startup. AdGrok is reinventing the AdWords interface in two major respects. First, the company is taking a
