Ask Bill Demas about the promise of big data, and he won't hesitate to recount a speech, now infamous in company lore, that he gave in 2009 when he took the reins as CEO of Turn, a digital advertising company. Deciding not to mince words, the new leader declared to his increasingly alarmed-looking staff that everything they'd known was over and that software-as-a-service was the future.
"I call it the 'burn the boat' speech," Demas recalls. "The notion was that there's no going back." In his tale, Demas headed Turn in another direction and totally ditched its business model.
Based in Redwood City, California, Turn was founded in 2004 by two executives from AltaVista, Yahoo's defunct search engine, as a digital advertising firm focused on search marketing and display ads. The start-up enjoyed moderate success. Three years later, however, sales were flat. According to Demas, this left the partners squabbling about how to fix the problem, which resulted in one founder's departure. (The other, Jim Barnett, is now chairman of the board.) "I think sometimes the misleading thing here in Silicon Valley is the start-up has started and everything has gone nice and smooth, and there's this big end-success story," Demas says. "That's very, very rarely the case."
Demas, who has extensive experience in data from managing parts of Microsoft's SQL Server and the search marketing company Overture, was brought on as a Turn board member in 2007; he became president and COO in 2008. By the time he was named CEO, he was convinced that the key to unlocking massive growth at Turn lay in a cloud platform that would allow clients to upload and analyze their consumer data and execute their own marketing campaigns.
Demas immediately stopped hiring traditional salespeople and cut off investment to the company's traditional ad network. Employees were told they had to learn new skills and become more tech-savvy than ever before. Though much of the staff was dragged along "kicking and screaming," Demas says Turn has doubled its revenue every year since its pivot into big data. Last year, Turn's earnings hit more than $100 million.
At the same time, "big data" industry growth has been soaring. From hospitals to retailers to phone carriers, companies are amassing hoards of data about their customers and verging on a near-frenzy trying to process and analyze it all themselves. Better data analysis means better business operations, which translates to better margins.
IDC, a market research firm, predicts the big data industry will reach close to $17 billion by 2015. IDC clocks the industry's annual growth rate at 40% over the last five years, which is seven times the growth of the overall IT market.
Demas recognized that chief marketing officers likewise need to learn new skills. After years of analyzing data to help marketers figure out who their key audience segments were, Turn's new offering, Demas decided, should help those marketers collect and store that data, in real time, and make better decisions based on the information.
The company does this in two ways. Its "audience platform" allows the customer to upload first-party data—CRM details, point-of-sale information, purchase history, catalog subscriptions—and then match it with demographic and psychographic data, such as income and hobbies, to create anonymous audience profiles. Think ranchers in Texas who exercise, say, for a sneaker brand.
Turn's "media platform" then helps the client create marketing campaigns based on the data and deploys ads across video, Web, and mobile apps. To handle all of the information—each profile contains 2,000 attributes and characteristics—Turn has built data centers around the globe; its fourth opened in April. The company has nine offices and has expanded into Europe and South America.
Demas claims Turn is winning as it goes head to head with Google. (Google sells its similar Big Query product somewhat under the radar.) "In many respects, this is the sequel," Demas says, referring to his experience as a senior vice president at Overture, a search engine that lost out to Google. "I've seen the original version of the movie before, and now, as the entrepreneur and CEO of this company, I've got a second chance at Google."
Today, Turn counts telecom giant AT&T among its largest clients, though he hesitates to name others since he says they consider the platform their "secret sauce." When asked if Turn is aiming to get scooped up by the likes of Oracle, IBM, or another large IT enterprise—in the vein of so many of its big data brethren in the past few years—Demas rejects the idea. He does, however, have his sights set on an IPO.
"We believe if we continue on this path, we could be an independent company that could one day go public," he says. "But when we’re ready."
Seems like burning the boat was not such a bad idea, after all.