Interview with Matt Roche, CEO of Offermatica

June 7th, 2007 by Lars Johansson

I’ve had the pleasure of talking to Matt Roche, CEO of Offermatica.

Matt Roche

The typical customer of Offermatica is a marketer or head of e-commerce who has been frustrated by the rising cost of media or the ability to market. Matt mentioned, as an example, a merchant who had to spend 75% of her time dealing with production and IT issues.

I asked Matt about the biggest advantages to using Offermatica’s solution compared to their competitors’ solutions. He broke it down to three areas:

Speed. The burden on IT is less compared to other platforms.
It’s a marketer-driven tool intended to be used daily by marketers.
It’s a delivery platform. Sort of like an Akamai for personalized delivery.

The average Offermatica customer runs 13 campaigns simultaneously and Offermatica is handling almost 10 billion impressions a month.

Offermatica

I also had to ask Matt how often he is right when simply guessing which of two options will perform the best. He said half of the time. I’ve found that to be true for me as well (for some reason this reminds me of Hans Rosling’s chimpanzee story). Matt went on to expand on his answer by adding that there is always something new to be found—new copy, layout, or segments. Things that we don’t think are relevant end up being phenomenally relevant.

One case that Matt found especially exciting was a category affinity test. When a visitor through surfing patterns showed an affinity for a subproduct area, they showed offers related to that area when the visitor came back. There was a 65% improvement in revenue per visit. Even more surprising was how it changed the behavior of marketers. There were merchandisers who previously never had the chance to place their products on the first page, meaning that the outcome of the test changed the ownership paradigm and not only copy or layout decisions.

Matt believes that Offermatica sells engagement of consumers and marketers. He mentioned the difference between cycles that are six months or longer to put things on the website to getting an idea, launching it, and evaluating it all in a week.

Matt is quick to point out that they are not just a testing company; they optimize content for the source of traffic and use behavioral profiling.

Offermatica

Matt thinks the remaining barrier to adoption is mainly organizational issues and not a lack of understanding the benefit of testing and personalized optimization. A certain amount of traffic is required to achieve statistical significance, but smaller websites can still use the targeting capabilities to change elements on landing pages based on source of traffic to achieve higher relevance.

It is possible to integrate with web analytics solutions from Omniture, WebTrends, and Coremetrics, and take segments from there and use in Offermatica’s tool. You could, for instance, import RFM scoring from your web analytics solution to Offermatica.

Offermatica has a database of almost 300 million profiles at the moment and uses an open API.

Offermatica is growing by roughly 30 clients per quarter, and Matt says he doesn’t want to make the largest amount of money from the five biggest marketers, but instead help the most marketers. He thinks that Offermatica will see a 200% growth this year as compared to 315% last year.

Offermatica is primarily used in North America where they have some 150 customers, but they do also have some customers in Europe. Skype is a customer, and so are five or six banks, predominantly in London. There are about the same amount of customers in Japan. Offermatica opened an office in London and has an established service partner in France.

Matt’s advice to someone who wants to get started with testing is to just do it. Since you’re not buying software, you could get started in a week. So what are you waiting for?

Press release: Offermatica Hosts Inaugural Strategic Optimization Council
The Merchant Versus the Machine

Parts of the interview are available in this podcast:
mattroche_podcast.mp3