Starting an Online Advertising Network

Interview with Hydra Founder and CEO Zac Brandenberg

Zac Brandenberg is Founder and CEO of Hydra, an online ad network that focuses on performance-based advertising. Zac defines the overall vision for Hydra and oversees operations, strategic growth, business development and relationship management for this fast-growth company.

If we were to make a list of talented Internet entrepreneurs, Zac Brandenberg would be right up there with the best of them.

When we first met Zac ages ago, he was the mastermind behind an ecommerce venture that had the exclusive rights to the official "Iraqi Most Wanted" playing cards deck. We were impressed with his skills then, but he's come a long way since that venture.

We recently caught up with Zac for one of our founder interviews.

Zac, thanks for taking the time to talk with us. So, what's your latest venture?

In 2003, I founded a performance-based online ad network called Hydra, which I continue to run as CEO. It has been an incredibly successful and rewarding experience. From the third month, we were profitable and last year, we exceeded $100 million in sales. We've been on the INC 500, Deloitte Fast 50 and all that, and we're still growing and evolving.

That's phenomenal growth. So are you competing with other affiliate networks like LinkShare and Commission Junction?

We don't directly compete with CJ and LinkShare. They primarily serve ecommerce advertisers and offer a fee-based platform for connecting with affiliates. Hydra, on the other hand, provides turnkey customer acquisition for direct response advertisers. Unlike them, Hydra only charges for results on a cost-per-sale or cost-per-lead basis, even if we develop marketing assets for our clients. So as you can imagine, we're hyper-focused on making sure we deliver results.

What would you say are the main things that differentiate your from the competition?

The most obvious difference is that we use a proprietary conversion tracking platform that's more robust and reliable than the off-the-shelf technology our competitors employ. Another key differentiator is that in addition to affiliate distribution, we now also offer internal distribution in display, search and email so we can deliver greater control over volume and quality--all on a cost-per-action basis. Finally, we're continuously investing and evolving our services to meet the need of large brands rather than the no-name neutraceuticals, cash grants, and other dubious online DR offers that are the staple for others in our space.

You had great success with your venture, in which you were the leading marketer for the official "Iraqi Most Wanted" playing cards. That had to be one of the most successful e-commerce ventures ever. How well did the venture do and what did you learn from it?

Certainly, GreatUSAflags was a wild ride that was a tremendous amount of fun. We grossed about $10 million within six weeks, and then ran the business for the next year or so profitably before we felt it had run its course. GUF was my first full-fledged ecommerce project, and it gave me and my team a lot of learning for a series of other product-based marketing endeavors we developed. It also certainly helped hone my relationship with a core group of people that joined me when I started Hydra, and with whom I continue to work today. Our success with GUF was, in a lot of ways, a result of immense drive and hard work, and the ability to be first; all are attributes that greatly contribute to success and are elements we focus on at Hydra.

Interesting. It seems like so many firms are investing a lot in e-marketing but many of them are wasting time and money by not doing it right. In your opinion, what's the thing that most companies do wrong and how can they go about getting it right?

From our Direct Response point-of-view, we see a lot of advertisers--even Fortune 500 companies--who don't understand what's required to drive conversions online. Many still tend to see the Internet as a supplement to their traditional efforts and therefore miss out on its incredible power for driving customer acquisition.

But if they do want to gain customers online, as a first step I would recommend they become informed of the best practices that have already emerged. More importantly they need to be willing and able to use performance metrics to continuously and rapidly test and optimize. The market will tell you what works and what doesn't very quickly. You just have to be able to keep up.

That's a great observation. One last question for you. You've established yourself as a successful serial entrepreneur. Many of the people who visit our site are looking for inspiration and advice. What words of wisdom would you care to share with some of the new entrepreneurs who come to our site? What's the best advice you have for entrepreneurial wannabes and business owners who are in the midst of starting and growing a company?

All of the usual remarks about being driven and aggressive and passionate about what you are doing remain true here. For me, one of the contributions to the successes I've had, as well as one of the great benefits, has been being surrounded by a team (some of which have been with me in various ventures for 8 years) that is bright, inspired and motivated.

Very few successes in life are the result of a singular action and building a company is certainly the work of numerous individuals; it's not all about the business model, and generally in my ventures, we've evolved or changed the model to adapt to changing market conditions or better capitalize on what was working. It has been key for me to collaborate with people with complimentary skill sets who are as passionate and driven; finding that core group has been critical to repeated success.

That's solid advice for every entrepreneur, Zac, and something that's not mentioned too often in our entrepreneur interviews. Once you get that core team, you can use them in startup after startup. Hey listen, thanks so much for taking the time to share your entrepreneurial experience with us. Good luck taking Hydra to even greater heights!

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