Beast Mode Marketing
To our Valued Investors:
The tried-and-true means of delivering advertisements to consumers has historically included things like radio and television spots, magazine and newspaper ads, and roadside billboards. Somewhere along the line, though, some sharp executives concluded that a more effective means of promotion would entail personalization. By researching and targeting a potential customer’s interests and needs, or at least taking a stab at guessing what might seize the buyer’s attention, the promoter of a product or service would likely have a better chance of making that all-important connection. It was this kind of thinking that led to the birth of direct-mail marketing. Unfortunately, we cannot confirm whether those responsible for dreaming up this idea have served any hard time in prison for the offense.
Even though it is a commonly understood part of American life, the consistent proliferation of postal marketing campaigns today can be difficult to comprehend. How is that we, with about one fifth of the 21st Century in the history books, are still subjected to the daily onslaught of messages that we are highly unlikely to read? Making matters worse, those who are concerned about the protection of our natural resources see this futile method of shilling as nothing more than a reckless campaign to senselessly kill millions of trees. Rather than promote real estate agents, lawn care specialists, and window replacement services, it can feel like junk mail’s primary function is to supply us with more to place in the blue bins on recycling day.
As many good things evolve to become better, bad things sometimes mutate to grow even more invasive. In the 1990’s, internet usage exploded, and the possession of an email address went from a hallmark of Silicon Valley dwellers to a novelty for moderately tech-savvy Gen Xers to an absolute necessity for anybody wishing to function in modern society. The crossover of junk mail to electronic “spam” messages was abundantly predictable. Suddenly, the automobile dealership flyers and the promotion of local politicians seemed almost quaint in comparison to an endless stream of pitches for investment schemes guaranteeing returns, off-label drugs that will enhance one’s “performance”, and indescribable wealth that will be delivered by a Nigerian prince who happens to be in an unusual predicament. Spam is the grotesque Mr. Hyde to junk mail’s Dr. Jekyll, with Jekyll being no prize to begin with. Still, somewhere buried in all of that annoying muck lies the glimmer of an inspired marketing objective. If done properly, speaking directly to the consumer as a unique individual can lead to a rewarding experience for buyer and seller alike.
Founded in 2016, New York’s Attentive Mobile, Inc. recognized the benefits of directness in customer engagement, and they came up with a way to extract it from the seedy underworld of unsolicited emails. The solution was to move the communications away from emails, which many prefer to reserve for business or life management uses, to Simple Messaging Service (SMS) platforms, better known simply as “text messaging”. Brian Malkerson, Attentive’s Chief Revenue Officer, explains the fundamental epiphany in an interview with MarTech: “Consumers don’t like how businesses interact with them – between ads, spammy emails and intrusive messaging, brands are talking at their consumers. Attentive is building a platform to change that to focus on delivering personalized, relevant two-way and compliant communications. Messaging is ubiquitous, it is how people talk to each other and it is how businesses should communicate with consumers. When done right, SMS delivers a personalized experience. Consumers shared they want to receive relevant content from brands they have opted into. Our platform enables brands to deliver personalized messages across the customer lifecycle and we help them create personalized, direct campaigns that strengthen customer loyalty and drive traffic.”
Attentive is decisively making strategic acquisitions in a drive to optimize their effectiveness and to dominate the market. Last March, Attentive completed a healthy $470 million raise. Three months later, some of the newly gained capital was deployed for a boost of artificial intelligence (AI). On June 9th, Attentive announced their purchase of Boston-based Tone, a specialist in AI-enhanced human text message conversations. In simpler terms, Tone provides a “chatbot”, enabling Attentive clients to engage customers in dialogues with machine-learning computers.
Attentive falls in the category of Software as a Service (SAAS) providers. Their product is basically a license to make use of their programming. Part of the deal comes with heavy layers of compliance restrictions, namely, providing the ultimate recipients of text messages with the choice of “opting in” or “opting out”. The consumer, then, retains control of what she sees on her phone, making the entire experience almost completely unintrusive. Apart from maintaining regulatory requirements for Attentive, this flexibility serves as a most efficient protection from pushing Attentive’s corporate users into the shadows of spam’s ugly reputation.
The move from one-way email onslaughts is truly a step in the direction of creating a warmer, more personal association with the consumer. While emails are exchanged on a daily basis with less meaningful relationships like medical care providers, internet services, or the local electric utility, text messaging is the domain of friends, spouses, children, and other loved ones. Noteworthy, too, is the fact that SMS is the preferred method of communication among the crucial millennial demographic. Attentive enables its corporate clients to connect with their own customers in ways that transcend the tiresome hawking of products. Messages might be more along the lines of “Your delivery is on its way”, or “We hope Doug at our Springfield location met your needs”, or even “You seemed to like our chocolate protein bars. Did you know we also have them in mint chip flavor?”. Importantly, these messages are interactive. Recipients can respond by texting a reply like, “I would love to try that flavor. Where can I get it?”. The customer would then be directed via SMS to the closest retailer. The benefits of this kind of dialogue are almost too obvious to point out, but Malkerson outlines just how impressive the results are in the same interview: “SMS drives 10 times more revenue than email per message, with 99% open rates and 30% click-through rates. Text messaging is the consumers’ channel of choice with mobile making up 75% of e-commerce this year, and Attentive helps to humanize the ecommerce shopping experience by focusing on personalization and the customer experience. In 2021, brands using Attentive will collectively earn $12.5 billion in revenue through SMS marketing”. You read that correctly --- $12.5 billion in revenue that is directly attributable to Attentive’s text message marketing, almost tripling the $4.5 billion in revenue generated in 2020. More than 4,000 brands work with Attentive, engaging over 200 million consumers, and yet the practice is still very much in its infancy. It’s quite possible that you have yet to receive a message of this sort on your own phone. If this gives some inkling about how much potential growth lies ahead for Attentive, bear in mind that as a SAAS, the rates Attentive can charge for their licenses are directly related to how much revenue they generate for their corporate users, and those already astonishing numbers look like they are heading for “beast mode”.
The massive potential has been noticed by the best in the business. 2020 and 2021 saw a flurry of funding rounds for Attentive Mobile. The roster of Attentive’s investors is a veritable “who’s who” of the most consistently successful venture capital names on the planet. IVP, Bain Capital, Coatue, Sequoia, and Tiger Global have all placed their chips on this one. Iron Edge VC is extremely proud to join this distinguished group with a recent investment in Attentive. Of course, Attentive Mobile is a privately held company at the moment, making it impossible to buy at Merrill Lynch, TD Ameritrade, Robinhood, or any other conduit to the public exchanges. Iron Edge can, nonetheless, provide you with access to our Funds that have ownership interests in this company that supercharges commerce through intelligent marketing. If you would like to learn more, or if you know anybody else who would, please don’t hesitate to contact us by clicking “Get in Touch” below.
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All the Best,
Founder & Managing Partner