Gil Sperling, cofounder and co-CEO of Flow, is pushing for businesses to use what they know about their customers as a tool to deliver personalised targeted advertising through online platforms.
Flow, is a local marketing and advertising technology company that raised $4.5m (about R78m at the time) in funding in 2022. The company counts Woolworths, PriceCheck, Vodacom, VW, Land Rover, USN and Old Mutual Insure as clients.
Describe Flow’s business model.
Flow is a commerce media platform. We enable retailers, marketplaces and e-commerce businesses to monetise their audience, and we provide access to brands that may want to target [that audience] through advertising.
What is commerce media?
Commerce media is relatively new, but marks a significant shift in how digital advertising works.
It’s the ability for a business, a platform, or marketplace to take its audience — that is first-party data on clients and shoppers — and package it in advertising form, so that its suppliers, those whose products sit on the shelf, can advertise to the shoppers.
Twenty years ago there was a huge shift from traditional advertising — TV, radio, newspapers — to digital. Generally that was in the form of search. Google built a huge search business, about $30bn ... I think it was in 14 years.
The next big shift of social media, that’s when you now have the ability, as a brand, to advertise to people where they spend a lot more time, online, in a much more engaging way and far more targeted.
Facebook took about 11 years to build to $30bn. The next big shift is commerce media.
What makes commerce media different?
Let’s use an example. Before, a brand such as Unilever used to run an ad on social media and hope it translated into a sale at a retail shop. Today, they’re able to run an ad to target people who bought soap before at Woolworths, one of our clients, drive them back to Woolworths to buy the soap and we can completely measure everything.
What makes this effective?
The targeting is so much more precise because the retailer knows so much about their shoppers that they now have an ability to place an ad in front of their shopper that is way more relevant.
It’s actually a win-win because the shopper has a far more relevant experience with an ad, the advertiser gets a better return on investment and the retailer can offer a better service to that supplier.
Brands spend a lot of money on placement in physical stores. Is this the online equivalent?
The design of the shelf, highlighting the shelf, the gondola at the end [of the aisle], and the till-top advertising, that is a form of retail media, which is a subset of commerce media. It’s been about and brands are used to advertising to shoppers in that way. The difference, or rather the extension of it, is to do that online.
The opportunity online is that you have access to that shopper for far longer.
What sort of clients do you have using this?
We’ve got the likes of Hello Peter. They’ve got over a million consumers a month who review businesses [and products] before they buy something. What an opportunity for a business to target those people.
We also have Bike Hub, a platform for buying and selling bicycles, cycling equipment and apparel; Howler, for buying and selling tickets; DigsConnect, where students search for and find accommodation; and The Capital, a hotel group.
Is SA in step with or behind the trend globally?
I’d say we’re behind in SA. We’re not the early adopters. The US and Australia, I found that both those regions are very progressive when it comes to retail media, which is great, because [it means] there’s precedent.
There is about five years of precedent now, how it’s done, how it works, how best to structure it and the benchmarks. And there’s a lot of studies for retailers and marketplaces who want to come on board. So we are not starting from scratch.
Look at large retailers such as Walmart in the US. They’ve got a programme called Walmart Connect. That’s a huge business. Last I saw, it was about a $4bn revenue stream for them. Obviously, the US is huge.
How big of an online audience does a business need to take advantage of this?
You do have to have a sizeable enough audience to move the dial. The nature of the business must be some form of marketplace where it’s [preferably] consumer facing. Even if it’s business facing, it just needs the volume. Once you have 200,000-300,000 people, at least, who are visiting and browsing your website, this can be an opportunity that does move the dial.
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