IP100 – SPOTLIGHT ON CATEGORY WINNER DIGITONIC

IP100 – SPOTLIGHT ON CATEGORY WINNER DIGITONIC

INNOVATE & INSPIRE

 

Innovation is fuelling huge growth for Digitonic, as we report

 

Digitonic is a young company, only founded in 2011, but already it calculates that it has powered more than a billion interactions between brands and consumers across six continents.

The company has grown to a value of £10m, a figure that has doubled since 2018, and reported 44% growth in the financial year ending 31 October 2018. It is also about to announce figures that show an even larger percentage increase in its latest financial year.

The Glasgow-based business has pioneered and defined smart mobile marketing – a term it has trademarked – to target huge audiences. The business uses its suite of proprietary technology to deliver marketing services such as conversational, “email-quality” image and video content directly to a consumer’s SMS inbox. It says that this has significantly improved marketing campaign conversion levels at a range of global organisations such as Audi, KFC and OilPrice.com.

Recently, Digitonic created an ad network in India on the back of building a popular cricket news site, called cricketnews.com. The website is integrated with Digitonic’s other technologies which have built up a new opt-in base of just under 2.7million people. This is a community of male Indian cricket fans aged 18-44 that live in major Indian cities, a growing audience for brands looking to tap into this emerging market.

“I can press a button and send a short TV commercial, a video or a link to a news article to all 2.7million people,’’ says co-founder and chief executive Grant Fraser. “We’re different from the norm because a lot of technology companies build tech for other people and organisations. What we do is build great tech for ourselves. We monetise and commercialise our own platforms first before we allow other people to tap into them.’’

It has been a winning formula. Digitonic was set up by Fraser and Iain Wilcox, who each invested £2,000 to buy two laptops, two mobile phones and settle the first payment for a small office in Glasgow. Since then, the company has had three successful rounds of investment. The first was in 2014 when four investment angels valued the company at £2.25m.

“We’ve never had an overdraft,’’ says Fraser. “We’ve also never needed to use those initial investor funds at all and I’m most proud of that. People might say that we didn’t need it but,

by having the funding there, we were in a position to make correct decisions and pick and choose campaigns and activities that we felt were right for the growth of the company. The funding lent me the peace of mind and freedom to do that.’’

Then, in April 2018, the business sold a 2% equity to an experienced Edinburgh-based investor, who now sits on the advisory board, valuing the company at £5m. A few months later, it sold 10% for a valuation of £10m, after successfully demonstrating to the buyer how powerfully the technology was working in the US and Canada.

Digitonic’s target for 2020 is to almost double turnover again. Growth will be fuelled by further international expansion, joint ventures with strong players in the organisation’s key target sectors and a potential company acquisition.

Apart from its success in the IP100 table, Digitonic has been shortlisted for several industry awards, including the Drum Awards for the Digital Industries and the Digital Marketing Association Awards.

Digitonic believes its strengths lie in critical databases. However, the introduction of GDPR and the imminent introduction of ePrivacy regulation could have been a huge challenge for a mobile marketing company. Nevertheless, Digitonic turned this potential threat into an opportunity.

Fraser explains: “We were pretty forward- thinking with regards to how could we pivot and continue to operate in a fully compliant and lawful manner, even when GDPR and ePrivacy came in. That’s why we started to focus on new messaging platforms like Facebook Messenger and Telegram, because it’s technically impossible to send a message to somebody through those channels without their consent and their opt-in. That is one of the reasons why we love that new form of messaging. We have focused on building up as big an opt-in base as possible across all those new channels.

“If GDPR had not been introduced, we may have continued to only run profitable SMS campaigns, but we were forced to innovate our way out of what could have been a difficult situation and that motivated us.’’

Digitonic’s platforms and technology have been the result of its stress on R&D.

“We put a massive amount of emphasis on R&D and we work closely with our accountancy firm in order to quantify our R&D and take advantage of the tax credits and grants that are available there,’’ says Fraser. “We have our own in-house tech team of ten people and almost every product that we utilise has been built in-house.’’

Clearly, the fruits of the R&D only remain valuable if they are protected and the company also places great emphasis on looking after its IP.

“Our eyes have been opened to what IP we actually had and what we are building. As a business, we have a wiki – a secure online content base – on which our 26 team members document, and continually update, every aspect of their job function.

“Within Digitonic, we have large IT, marketing and design teams and getting a successful project out of the door involves working across all of those divisions. Our wiki means that – as we grow and increase headcount at scale – we are able to onboard staff as efficiently and thoroughly as possible. The tools they need to do their role are detailed for them in writing, so they can pick them up extremely quickly.”

The work undertaken on safeguarding Digitonic’s IP and in performing an IP audit proved particularly valuable when it came to the last round of fundraising.

“Because of the work that we had done on our IP, we were able to quantify and qualify what that investor was getting. I have heard from friends who have sold businesses in the past that buyers took a look under the bonnet and then revised the price downwards because they weren’t getting exactly what they thought. However, our IP audit gave investors complete reassurance and confidence that they were making a good call.”

The business has also trademarked the phrase ‘smart mobile marketing’. “That came from the work we’ve done on our IP – such as looking at our patents – and we were able to thoroughly back up our smart mobile marketing credentials,’’ says Fraser. “For the first seven years after the business was set up, we solely offered mobile marketing. This might sound a bit alien to most marketers because, typically, businesses are happy to take money from almost any type of marketing activity, whereas we wanted to be the go-to people for mobile marketing. But, within our own IP we were able to create the fundamentals of what makes up a successful campaign. A campaign that can be deemed a smart mobile marketing project. It’s about compliance, it’s about the correct opt-ins, it’s about the correct structure and it’s fundamentally about delivering ROI’s for a client”.

Having successfully raised funds, developed its technology and platforms and put in place the appropriate protections, Digitonic is now poised for further growth. It has invested ‘a six-figure sum’ to convert previously disused office space opposite Glasgow’s Central Station. It’s three times bigger than its previous office and will serve as the company’s HQ as it continues to expand across global markets. “We wanted to remain based in central Glasgow, while a lot of businesses are going to the outskirts to save money,’’ says Fraser. “The office is treble the size of the last one but we’re already wondering whether it’s big enough.

The choice of office came about from asking the staff what they wanted. A lot of them travel long distances to get here, so it was a unanimous decision to remain within the city centre and avoid further travel to the outskirts. Our head office will always be Glasgow.’’

Now the company will focus on emerging markets such as India, where it has enjoyed such success with cricketnews.com. It also sees huge potential in North America in the financial and investment sector where its technology has been particularly well received. Fraser says: “We’re trying to revolutionise what marketers have been doing in that sector for years, which is relying on email for communication. That’s a huge growth area for us.’’

As well as having an office in London’s Aldgate, Digitonic has a base in Lucknow, India, and is opening an office in New York later this year. So, while Digitonic is firmly rooted in its native Glasgow, it’s very much international in its outlook.

Fraser says: “We were born global. From day one, our clients have been international and, although our roots are in the UK, we see huge opportunity by internationalising. Technology does not have boundaries and we are definitely seeing that. Where we are getting the growth from is by taking what we have done in the UK and then adapting it to work as well in other parts of the world.’’

Digitonic has a number of platforms to support its smart mobile marketing

mDoc is Digitonic’s proprietary mobile messaging format, designed to outperform traditional bulk SMS communication methods, providing email quality content for the SMS inbox of any internet enabled mobile device. It allows the sending of Jpegs, Gifs, MP4s and PDF documents, all optimised for the end users’ device.

Yapper is a conversational marketing platform. Such platforms offer marketers the ability to listen, build trust and establish rapport with their audiences. They ask specific or open-ended questions and adopt paraphrasing to show genuine interest and understanding. Technology such as Yapper enables marketers to respond appropriately within each conversation.

Yapper can leverage scalable inbound and outbound Facebook Messenger automation to capture, qualify and connect across social channels and can deliver targeted new users into a bespoke Messenger flow, using automated conversational marketing chatbots.

Digitonic can add plugins to a customer’s website or marketing communications to let users know they can contact the customer via Messenger directly. Every user must opt-in to the chatbot marketing communications and can unsubscribe at any time.

Entr is Digitonic’s WiFi analytics platform, which delivers real-time in-venue personalisation via triggered marketing and webhooks, all derived from device connectivity events.

Powered by a customers’ existing WiFi connectivity, Entr also provides data insights by helping venue owners to understand unique customer visit frequencies and durations, enabling venue owners and operators to understand who their customers are, how often they visit and how long they stay.

Entr measures responses from campaigns by logging customers when they re-enter target venues and marketers can measure their associated ROI via a single dashboard.

Finally, Digitonic’s AdNews provides a scalable prospecting technique by leveraging newsworthy content to achieve targeted brand exposure. The AdNews process creates a conversion funnel by creating impressions to encourage action.

Breaking news stories provide the medium for delivering ads, creating an opportunity to promote a brand to millions of profiled views. To achieve this, Digitonic builds social communities to promote content directly to customers using focussed targeting tools.

Digitonic in business

In December 2018, KFC South Africa launched its campaign to “Turn Tuesday into the Best Day of the Week”, offering a 12-piece bucket for R99.90. Digitonic, which had previously delivered successful campaigns for several well-known brands in South Africa, worked with KFC to implement an mDoc marketing campaign to entice customers into their nearest KFC restaurant. KFC sought an innovative way to boost awareness of its national “Chicken Tuesday” campaign across South Africa.

The goals were to raise awareness of the “Chicken Tuesday” campaign and highlight KFC locations nearby to each customer. The goals were also to increase midweek footfall within KFC restaurants throughout South Africa and to encourage repeat, and more frequent, custom with a “Tuesday only” offer.

Digitonic developed a personalised mDoc campaign with a fun and entertaining short video outlining the offer. The message was delivered directly into the SMS inbox of potential customers, and also included copy about the offer and a short link to the website to find the recipient’s closest KFC restaurant. The mDoc platform ensured that each customer received optimised content for their device.

The campaign, which was fully-tracked to measure effectiveness and ROI, achieved a CTR (click through rate) of 4.56% and, at the end of the trading day, not only was the advertised deal a success, but several KFC lines had sold out after the campaign had been sent. The mDoc campaign significantly outperformed traditional marketing activity for the same offer.

Read the full IP100 Magazine here

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