Marketplace Czech start up Socialbakers goes global on back of social media boom

05-03-2014 13:43 | Chris Johnstone

A Czech company is following on the coat tails of the Facebook and social media boom by developing and selling the monitoring tools and analyses that can tell companies which brands or campaigns are hitting or missing the mark or where they are running into trouble.

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Jiří Voves, photo: archive of SocialbakersJiří Voves, photo: archive of Socialbakers Socialbakers has grown from a handful of Plzeň friends and colleagues that at first had to explain to firms that Facebook was not a dating site into a fast expanding global company with a customer base that includes some of the world’s biggest brand names.

Youthful company vice president Jiří Voves explained what the business is based on and how there is still plenty of room left to expand as social media takes on a more significant role in company planning, marketing, and troubleshooting. I asked first of all what social media they monitored and interpreted for clients.

“Socialbakers is a social media analytics company and we are focusing on monitoring bands on social media, mostly on Facebook, Twitter, YouTube, GooglePlus and monitoring their marketing performance. How they do on social if they are spending money on social, if they have a return on investment. So we are basically putting in all the numbers on social so that they know what they are doing. ”

And how did you come up with this idea? If I understand right, you and some colleagues were already in this area developing web pages, so how did you make the transition to this analytics business?

“There were four co-founders of the business and we started as a social media agency. Before that, that’s correct we were doing websites as well. Then we met with Jan Řežáb. He basically told us: ‘Hey guys, Facebook is going to be big.’ So we said, ‘okay.’ We started focusing on developing applications and campaigns and basically evangelising the Czech market, saying what Facebook is, what it brings to marketers. That is how we started with a social media agency. And then we saw how much data we can get from the social networks. So we started creating some scripts, started creating the Socialbakers website and then we started focusing on doing the monitoring, creating the software for monitoring, because we needed it for our everyday social agency work to come up with the numbers and do the reporting. Then we became aware that everyone is doing the same thing as we were and that we would need some kind sort of software. So then we kind of restructured and started concentrating on developing the monitoring software.”

And this is going back how many years when you decided to focus on the analytics side of social media?

“In 2008 we started the agency and in 2009 we started developing the product.”

Facebook obviously existed then but it wasn’t such a phenomenon as it is now?

Photo: archive of Radio PraguePhoto: archive of Radio Prague “Right, yes. I think when we started Facebook had around 300,000 people in the Czech Republic. So it was really small, it was not big at all. And the first thing that we were doing when we came to brands was telling them what Facebook is and how they can market to it. Because, basically, they thought it was another dating site. So we had to introduce them to the concept and show them some in-use cases from the US market and how brands are using it there. That is how it got us to go into the companies and how we started our first business.”

Your first customers were Czech companies or was it a take up from worldwide companies?

“No, no, it was Czech companies.”

Such as?

“We had KIA, we had telco operators, so these were the very early birds of social media. So, we started doing some campaigns with them, some fan acquisition, doing some competitions on Facebook applications and some social media games.”

And now your customer base is global, worldwide, and you have go some very big names?

“Yes, right, now we are a global company. We have global customers such as Nestlé, Henkel, Audi, Adidas, all these brands. And basically our offering has changed from providing social media agency business to providing them the software as a service. So now we provide them with numbers so that they can evaluate their strategy and we also have a professional services department which helps them evaluate the numbers and gives them some recommendations based on the numbers and creating strategies for their social media efforts during the year.”

If we take for example, you mentioned Nestlé, what can you do for them or what do they ask that you do for them?

“They have hundreds of entities on social media all around the world. They have several Facebook pages, Twitter profiles, everything. And what they are doing at their headquarters at Vervey is that they are monitoring social media market from all around the world. What we provide to them is to show them the status on different markets, for example, in the US, in Europe, or in South America, so how their brand is doing on social media and also, how their competitors are doing. What, for example, campaign is running in Brazil, so that they can react to it, compare their results, and we also give some early warning if something is happening on some markets on social media. Because, as we all know, the message spreads very fast on social media. So we give them this early heads up that something is happening on a given market.”

Photo: Barbora KmentováPhoto: Barbora Kmentová As a result, do some companies rapidly change some campaign or some aspect of their business because of what you are saying?

“I would say their social media strategies are constantly changing, constantly evolving because it’s a fairly new business still so a lot of companies are trying to find themselves on social media. And as you said, the movement on social media is so quick that they have to react fast. Also, the social media platforms are changing quite rapidly. So if Facebook changes some algorithm or the ways some brands can promote, then our clients have to react to that and it’s our responsibility to let them know, give them a heads up that something is going to happen and based on that they will then optimise their strategies.”

Can you give an example where some company has reacted to your input or the analytics that you have done and changed something fairly quickly?

“I would say we are also in social customer care, so we are able to find out if fans are asking questions on their social media profiles. So we are monitoring this for our clients and for the whole market. And based on that we are able to tell if the fans are active and, for example, warn the brand that there are a lot of questions which can be turned into sales opportunities or they have customer care related questions. So we tell them this is going on on their profiles and based on that they set up, for example, social media customer departments where they handle only social media requests, customer care requests from social media.”

So it’s sort of troubleshooting for them in a way?

“Yes, troubleshooting on social media.”

And it’s not just Facebook is it? You look through a whole wide range of media, Twitter, Facebook YouTube. How many others?

“Also, LinkedIn, Instagram, GooglePlus, we also look at Russian V Kontakte as it is a very big social network, so we are also monitoring that one.”

You started off in Plzeň and I think you are now in around a dozen countries worldwide. What is the development going to be because you also recently got around a half billion crowns from venture capital companies? Where are you going to develop in the future?

“That’s right, we started in Plzeň, that’s where our core development is. Now we also have a big presence in Prague. We have 11 regional offices around the world and we are going to strengthen the positions of where we are. So the South American market is very important for us, the Asian market also, and we want to strengthen and build our position on the US market.”

I presume there are rival companies maybe offering similar services. What are you offering that the others are not or is it basically that you were one of the first on the bloc as it were?

Photo: David Castillo Dominici / Free Digital PhotosPhoto: David Castillo Dominici / Free Digital Photos “We were lucky enough to be one of the first and we are also focusing more on the performance of brands. So there are competitor companies but they are focusing more on listening to the market, that is, what people say about brands. We are looking at it a bit from the other side, looking at the brand performance, what sort of content they are posting on their social sites, if users interact with this content, that means if its relevant to them. Then, if they ask questions, how quickly the brand responds. And we also help them optimise their advertising by seeing if they are targeting the right audience. This is what makes us stand out and I would also say that due to monitoring also of competitors, we are able to do market benchmarking, so, for example, we can say how is the whole airline industry on social media compared to the automotive industry for example.”

It is probably an indiscrete question, but how much are companies willing to pay for treatment of information, are we talking about tens or hundreds of thousands of crowns a year? What sort of ballpark are we in?

“There are different aspects. It depends on the size and the number of pages that you are monitoring. So we have clients that can monitor brands from 100 dollars a month, which is our base revenue which is for small companies, and it goes to several thousand dollars depending on the scale.”

How fast is the take up of new customers that you have got at the moment? Is the Facebook phenomenon and the other social media still growing?

“We doubled our customers in the last years so we now have 2,000 customers. It is still growing, though that depends on the market. The US and European markets are very good at what they are doing, South America is catching up very quickly, Asia is also catching up very quickly, but we have customers from all around the globe. And I would say now that it is now moving from the phase of experimenting with social media to really knowing what you are doing, so knowing how it can really affect your business. So, social media departments are not just parts of the marketing department sitting somewhere in the corner. They are really becoming much stronger in companies and they influence how the whole business is run.”

So far, you have grown really fast but you are still not making a profit. So when do you think you will see the black figures and how big do you think you can grow in the business model you have?

“We are still growing the business. We could be in black numbers if we wanted to but we decided to really expand into different countries, open offices around the world and hire the best people we can get in terms of development or sales, sales engineering and so on. So that’s why we took another investment so that we can continue this growth, speed it up even. We want to be in black numbers in 12 to 18 months with the growth that we now have.”

Photo: Philippe Ramakers / Stock.XCHNGPhoto: Philippe Ramakers / Stock.XCHNG And the market, how big can that grow?

“It can still grow (laughter). Definitely, it is for us to penetrate the US market much better to get a bigger market share. The South American market is still growing, the Asian is still very early on in terms of market spend on social. And if we look at the global social media marketing trend, it is still a small percentage of the whole digital marketing budget. And we see the trend on the social is still going more into digital and it might even blend in one day that digital will be social and the other way around. So there is still a lot of room to grow. ”

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