This week, we picked PebblePost as our martech company of the week. Earlier this week, MailChimp announced that they’ll be foraying into the world of direct mail with postcards — but PebblePost has been in that game for four years now. They invented Programmatic Direct Mail® to take real-time online activity from users, and turn it into personalized direct mail that’s dropped into postal hubs within 12-24 hours of user activity.
In a time of intense competition in the adtech space, when it feels like every company is trying to cut through the noise and be heard by consumers, PebblePost has taken a different — perhaps even unique — approach.
They combine the power of digital tools and intent data, with the simple fact that 86% of consumers take the time to look through their physical mail. PebblePost was named to Business Insider’s 2016 list of the 100 Most Exciting Startups in New York City.
And to top it all off, in late August they announced $25M Series C funding to continue bringing higher conversions to brands and more relevant, less annoying mail to consumers.
We sat down with Frank Barbieri, PebblePost’s Chief Development Officer, for a quick Q&A.
ClickZ: Tell us a bit about your background and how you ended up at PebblePost?
Frank Barbieri: I have a 25 year career in media and advertising. I’ve built and sold a couple companies. I was at Microsoft for seven years, and I also run a small seed investment fund with my wife.
I met Lewis, the founder of PebblePost, ten years ago while fundraising for my past company, and he and I hit it off famously. When he came to me with the idea of PebblePost, it took about three minutes for me to say, “hey can I invest?” I was a seed investor and followed the progress of the company as it’s been growing like crazy over the past three years. Then I joined the company earlier this year to run a couple of teams — my title is Chief Development Officer, so I run the corporate development, business development, and marketing teams.
Lewis is a fascinating character. He was in VC, and essentially built seed investing in New York. He built a tremendous portfolio of advertising technology companies focused a lot on retargeting. Then he got so excited by the potential in the market that he went back to being an entrepreneur. He got the idea of marrying all the brains of online — with interest and intent data — with the brawn of direct mail, which is a high performing workhouse of the marketing mix.
CZ: What gave him the idea?
FB: Because he’d been investing heavily in the sector, he knew instinctively a few things.
Consumers use online to research purchases. You have to say about 90% of purchasing and intent data happens online.
He also knew that high consideration purchases are made in the household, with consultation with families or partners. When it’s a long cycle, or a high price, or has high emotional investment: art, furniture, things like that. If you look at the marketing channels we use today, online is very good at capturing data, but very bad at informing those high consideration purchases.
Nobody ever taped a banner ad to their refrigerator and said, “honey, is this the right one?”
Then physical mail has been very bad at capturing intent data. It’s often called pejoratively junk mail, but it’s actually very good at influencing those big purchase decisions. Members of a household can pass to one another, and they actually can tape it to the refrigerator and say “honey, is this the right one?”
CZ: MailChimp has announced this week that they’ll be going into direct mail. This demonstrates how much PebblePost anticipated the trend. You guys really created the space of programmatic direct mail — can you speak to how much you’ve seen the field grow, and how much competition there is now vs back then?
FB: When we started talking about programmatic direct mail years ago, it was hard to even get meetings with direct mailers. Today, a lot of our customers are digital buyers. These are systems and processes that are natural to digital buyers: intent, closed loop attribution, prospects, retargeting. For online marketers, these are their bread and butter.
But direct mail today — a $46 billion market — is built primarily on the thesis that if you carpet bomb the United States with mail, you’re going to collect some customers. It worked, but it’s also not relevant and respectful for many customers you touch.
The beauty of what PebblePost has done is created a system by which all mail becomes meaningful. When you do get programmatic direct mail, we go through great lengths to ensure it means something to you. And meaningful direct mail converts really well.
We’ll welcome MailChimp to the party. I just think marketers have to be very cautious that if we go down the path of simply replicating email campaigns on paper, they’re going to be very disappointed with the results. We really believe there’s a higher bar for performance for direct mail, and we use highly tuned audience targeting and performance to meet that bar, so customers get mail that’s relevant, timely, and actionable — and that’s really the difference maker.
CZ: What is the biggest problem you solve for your customers?
Programmatic Direct Mail can be 8x more effective than traditional direct mail and 400x more effective than digital display.
We take the best of these two channels – digital and direct mail – and eliminate the pain points of each. It’s 100% fraud free. You get exactly what you pay for. Bots don’t have mailboxes. It’s 100% viewable. 86% of consumers take the time to look through the mail and say they like to discover what is in the mail. And it doesn’t interrupt the user experience; consumers can put aside the mail they want to keep for further review at a time and place that suits them.
CZ: How does the technology behind it work? What kind of data do you capture?
FB: We partner with brands. We’re a platform that brands use to manage their programmatic direct mail. So brands buy our service, which includes code snippets that can go on their page that will capture events from consumers on their brand page. It can then devise and print a singular piece of programmatic direct mail in real time that will drop into a postal hub within 12-24 hours of the event on their website.
CZ: Do you do any of the design and creative?
FB: Brands upload their creative, and decide which creative goes to which customer and which point in their journey, then the program makes it happen. They can assign different creatives to different objectives and different events. They can do A/B testing of different creatives. The platform gives them power and capability around defining the customer journey, capturing the relevant events, and making sure the message is appropriate and performing.
CZ: What kind of data can you capture about the performance? When it’s a piece of mail and not email, how can you know if it was opened, or read, or what action was taken?
FB: We are able to capture if the purchases were made online through the brand — we get data from the brand about whether those purchasing cycles were completed, which gives us very strong attribution. We use test and control groups to see what the difference is between someone who received the mail and someone who didn’t, which gives brands a very clear picture of return on ad spend.
Brands also give us CRM and transaction data, so we can 1) suppress existing customers, who might already be buying things and they don’t want to bother, and 2) we can take transaction data from actual physical retail, and because we have the address, we can say a person at this address received a piece of programmatic direct mail in X time frame prior to the purchase.
CZ: What particular industries does this work best for?
FB: We’ve found it works really well with higher consideration purchases, not task or utility ones. So automotive, high end retail, travel. All things that have high emotional or financial investment. Furniture, a new credit service, a new car, or a Caribbean cruise. When there’s ample discussion and research into what you want to do. The task or utility based purchases, like dishwasher soap or staples, are less interesting.
CZ: Most of your clients are B2C versus B2B. Will you expand into lead gen, for instance?
FB: We believe we’ll get there. We’re knocking off one market at a time.
CZ: What kind of goals do you have for the new funding?
FB: So many plans. Primarily, to deliver on our vision to make all mail meaningful. Which means investment in our data scientists, in machine learning, to make our platform more useful. More reporting and analytics, so we can be trusted stewards of the brand’s spend.
We’d like to make it easier, for instance, to do shorter cycle attribution, so brands can adjust their campaigns faster. We can do real-time tracking online, and we want to shrink the timeframe for offline as well.
CZ: What are you most excited about in this industry now and in the next year?
FB: We started reinventing direct mail four years ago. Direct mail was not cool back then.
But now, our timing is perfect. Marketers are realizing that they’ve reached a wall with channels like Facebook and Google, and there are diminishing returns on those channels. They’re getting far more sophisticated about how some of these traditional mediums, that get a digital upgrade, can perform for them.
We’re at a perfect time to help marketers that already have great digital chops, and want to work with a high performing traditional media that has that digital upgrade. Which is why now, you’re starting to see that direct mail is cool again.
CZ: What are some things you’ve done, or traits you have, that have helped you get where you are?
FB: One of the things I personally work hardest on, and try to attract on my teams, is a healthy sense of curiosity and a good dose of self-awareness. I think if you have curiosity combined with self-awareness, you can go very far on any path you choose in life. I’m always thrilled to learn from those around me, to understand where I’m weak and don’t know things, and to be surrounded by people who know things better than I. It’s kind of a cliche to say, “hire people who are smarter than you are.”
I always tell the joke that in one of my founding companies, I told the board that I would always hire people who are smarter than I am, and one of them said, “that’s not a high enough bar.” But I try to be just humble, curious, and driven.
There’s a funny thing about status quos. Conventional wisdom can often get codified into driving people toward poor decision making. There’s a conventional wisdom that spouse teams don’t work in startups — but now we have EventBrite going public. That you have to be in San Francisco — but then we have Shopify in Canada going public. There are all these points of conventional wisdom that people take as axiomatic, and if they’re not curious and self-aware, they might miss an opportunity.
CZ: You mentioned you have a seed investment fund with your wife, so that’s a duo that works.
FB: It’s true! My wife is a rockstar, and I learn from her every day.
Year founded: 2014
Funding status: Late Stage Venture
Last funding type: Series C
Total funding: almost $50 m
Headquarters: New York & San Francisco
On the martech landscape: Advertising and Promotions — though as they describe it, “Many marketers have told us that we created the first new channel since search and social. Programmatic Direct Mail® falls in a whole new category, between Programmatic Advertising and Print.”