STARTUP STAGE: Herdify enables hyper-targeted marketing for travel brands

What is your 30-second pitch to investors?

Herdify helps businesses acquire customers by telling them where people are talking about their products in the real world. We use this insight to target their ad spend to double their returns.

This is important because 95% of people trust recommendations over cold advertising, and most recommendations happen offline.

To do this, they simply connect their data to our SaaS portal via easy-to-use connectors. They receive monthly audience targeting data that can be used with all the advertising channels they use today, both on and offline.

Describe both the business and technology aspects of your startup.

The business is supported by 15 years of data science research. It uses machine learning and AI to determine where a business is being talked about in the offline world. The SaaS portal then gives the customer a series of insights that tells them:

• How much word-of-mouth their brand has
• How many sales that’s generated, and
• The percent of their revenue that has come through word-of-mouth

This is followed by a series of recommendations in the form of monthly super-targeted data sets for their ad channels.

Give us your SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the company.

Strengths:

• First to market – we are the first product in the world to detect offline word-of-mouth
• A practical application of behavioral science – most marketers look at behaviors, not behavioral science (how the brain actually works)
• A new way of targeting for marketers that puts them back in control of their advertising channels
• Much of the marketing world has been caught out by the removal of the tracking capability on IOS devices. This will only get worse as Google bans cookies. While many companies try to work around these restrictions, Herdify has created an entirely new approach

Weaknesses:

• Also the fact that we are first to market – we have an education piece to do on why the behavioral science behind influence (word-of-mouth) is so important

Opportunities:

• To help marketers take back control of their marketing spending
• Facebook and Google's dominance favors big brands who spend a lot. This is at the expense of the small guy. Herdify will redress that imbalance by handing control and power to small companies and advertisers
• For many companies advertising has become unaffordable. This may be because of shrinking budgets or increasing acquisition costs on the big platforms. Brands are looking for more effective ways to find and attract new customers – Herdify can offer this

Threats:

• Big social media platforms
• Advertising agencies
• Companies that provide Intent Data (e.g. Bombora)
• Companies that provide demographic data (e.g. Experian) 
• Executives who don’t understand AI and data analytics (“We already have lots of AI”)
• Internal performance marketers or agencies (“We don’t need another platform / “We haven’t got time”)
• Lookalike audience providers like program AI

What are the travel pain points you are trying to alleviate from both the customer and the industry perspective?

• Missed offline conversations and buzz hotspots - online influencer and reputation management only gives a fraction of the story 
• Difficulties in reaching and retaining new customers – a common challenge for all marketers!  
• Ads not performing, particularly in the light of weaker Facebook targeting  
• Slow conversion rate 
• Increased basket abandonment  
• Negative brand conversation (trust) and customers trading down from top-of-category products   
• Unsure what to do about privacy and the loss of cookies 
• Same old marketing strategy and lack of innovation / support to try something new 
• Difficulties in effectively personalizing 

So you've got the product, now how will you get lots of customers?

Ultimately, we are hoping to act as a self-serve platform for marketers. But before we get to that point, we really need to educate the industry on why offline word-of-mouth is so integral for their marketing strategy.

Tell us what process you've gone through to establish a genuine need for your company and the size of the addressable market.

We tested this targeting approach as a professional service to ensure that there was a genuine need in the market before productizing. We were able to achieve standout results for a number of businesses, including Comic Relief, who saw a 600% uplift in online sign-ups. We then took the decision to take it to market as a SaaS business, automating the process, reducing speed and reducing customer costs. 

How and when will you make money?

We’re generating revenue today. Our product is a monthly subscription service – pricing can be found on our website.

What are the backgrounds and previous achievements of the founding team?

Tom Ridges, CEO and founder, is a former Microsoft strategist who has spent the last few years creating the Herdify product through offering its capabilities as a professional service. Edmund Barter, lead data scientist, completed his Ph.D. at Bristol University and then spent time there as a researcher on topics such as what gives city neighborhoods their distinctive vibes, the spread of diseases like COVID-19 and novel algorithms for the Internet of Things. Victoria Murden, CMO, has spent over 15 years in the travel and hospitality industries, working in marketing for the BBC, Travelzoo and heading up the marketing team for Red Carnation Hotels, part of The Travel Corporation. Jonathan Hollis, head of business development, has sold marketing services for over 10 years, for businesses such as TrustPilot and Archant.

How have you addressed diversity and inclusion within your business?

D&I is at the heart of our business. However, diversity in tech is a challenge, and it’s our objective to tackle that. As a father of two girls, our CEO is passionate about challenging the lack of diversity in our industry. We are already involved in education initiatives with Bristol University, where much of our research took place, and have plans to mentor primary age children to foster an interest in tech and data science. We are also looking to partner with the Data Marketing Association, which has launched a campaign to readdress the skills gap.

What's been the most difficult part of founding the business so far?

We have faced challenges in identifying our target market and limiting our product reach to just one sector. There are many use cases for this research and work, and in order to scale we need to limit our outreach to one sector to make the most impact.

Generally, travel startups face a fairly tough time making an impact - so why are you going to be one of lucky ones?

There is an issue of trust right now within the travel industry – trust around flight cancellations, trust around businesses surviving long enough to deliver holidays, trust around quality of service. Word-of-mouth is a hugely powerful vehicle. We inherently trust those around us, and act on their recommendations must faster than we would a marketing campaign. Word-of-mouth is a form of social proof that can help advertising convert much quicker – if we have been primed about a brand by someone we trust, we are much more likely to click on their Facebook ad or Google ad the next time we see one. Using Herdify’s AI portal, brands can target a geographic area with strong word-of-mouth through targeted smart ads.

We are heading into a difficult period for all sectors with the cost-of-living crisis and marketing is always the first area of the business to be cut. The Herdify tool fixes two real-world problems – increased customer acquisition costs and declining ROAS. The tool also harnesses the power of first-party data – topical at the moment with the demise of Google third-party cookies next year.

A year from now, what state do you think your startup will be in?

We have secured follow-on funding for spring to extend our runway, which we’ll use to further scale. We hope we will have achieved success in educating marketers about the value of offline influence and why it should be considered an integral part of a marketing strategy. As we are the first to market, it’s important for our customers to really understand the value of our proposition. In a year’s time, we hope we’ll have done such a good job that there will be competition!

What is your end-game? (Going public, acquisition, growing and staying private, etc.

Right now, we’re focused on building a great company that answers a genuine customer need and growing a brilliant and diverse team of people who really want to come to work.