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Interview with Timotej Gala, deputy CEO, Httpool

Every marketer in the CEE region (and beyond) has probably heard of Httpool, the company you need to call when your Facebook ad account has been blocked or if you need help with Twitter or LinkedIn advertising. Part of Aleph Holding company, Httpool represents leading digital media platforms in over 30 markets in Europe and Asia. Timotej Gala, the deputy CEO of Httpool, has played an integral part in the company's explosive growth ever-since the early 2000s. This interview appeared first on our monthly podcast.


What's the story behind Httpool? How it all began?


In the first years up until 2008, we were an ad network, doing media buying-planning. At the time, I remember being attending an ad tech event in San Francisco. That’s when the first exchanges came on board. We understood that agencies, with the growth of digital marketing, will of course invest in people and take care of planning and buying. We needed to focus on the supply side, on the product, on the services. Back then, we recognised that programmatic is hot and started to develop our products based on that insight. In 2009, we got our first representation deal for Windows Messenger in the Balkans. 2013 marked our first contract in Austria for Spotify. 2014 came Twitter and that is when we actually realised that representation can be big and we started to bet on this kind of business. It took us several years to migrate from hybrid positioning to a reseller positioning.

We understood that Slovenia is a small market. From the beginning, Aljosa’s ambition was to conquer CEE first. We started developing the Yugoslavian part, because it was close to us and we knew the markets quite well. We got our first funding in 2008, from really small angel investors. They helped us with entering to Bulgaria, Romania, Austria, India and Hong Kong. We saw the opportunity to multiply or to copy the model and adjust it to local realities. From there onwards, we kept investing all earned profits.


How did you come to the business idea?


I remember thinking with Aljosa, what could be the game-changer, what’s different in our region. What we understood is all these big companies hate complexity, want to have it easy and expand with more or less copy-paste. Having a possibility to be on the market with sales force will, in the end, empower us to gain partnerships, because big tech will never enter these markets, which are too small, too fragmented, too complex. It doesn’t contribute anything to their bottom-line.


You are not an agency, but if we compare your model with typical network agency models, then often the head office is offering superb quality work and an agency in a smaller country with the same brand name is not even close to that level. It’s not McDonalds. How does Httpool manage to provide high quality services across all market?


We put a lot of effort into getting this part right. And we have succeeded. In the beginning, we were a group of individual companies, with local interest and a local managing director. In the last five years we have added a central management layer, who’d lead each of the functions, along with a regional management and connected all the products across all offices. For example with Twitter we have a Twitter director who handles the relationship with Twitter as well as sales and operations. He/she and the regional manager are responsible for all the sales across the region.

We have dedicated teams for Facebook, Twitter, Snapchat etc. All the countries have the same trainings provided by the platforms. The teams have weekly discussions, as well as full support from the central management. If ten years ago we were purely sales, right now we serve as consultants or business partners to our clients. We have to demonstrate a very good knowledge of their specifics and KPIs.


How do you find the right people to represent you?


There are 520 of us at Httpool. As long as I’ve been at the company, every year has been a bit of a start-up year for us. We are either opening new offices or offering new products. We do hardcore homework. We fly over, scan the market, talk to people as much as possible and try to find the most fitting person using headhunters or recommendations. Of course, we’ve had a few failures, three that I can remember from the back of my head. However, majority of our partnerships have already lasted for 10-15 years.


How do you know if the person is right or wrong?


It takes a quarter more or less.


I think one threat for your business model is that these big US companies like Facebook could open their own offices in CEE markets and start offering services directly.


You never know. However, based on our knowledge its highly unlikely. Why? Because their management is looking at our markets with the same KPIs as back home in the US. But they can’t be compared. The complexity of having a company here isn’t worth it. The revenue they share with us is peanuts compared to the hassle they’d need to go through. Relationships are key in advertising. Httpool and other players have been used to servicing clients in a different way. The service would lack due to scale of the company. I think this is one of the reasons for our success. We managed to adjust our model to work hand-in-hand with the big companies as well as serve and adjust our ideas for local partners.


You have been growing really fast. Where do you see opportunities for growth?


We are now at the starting point of becoming part of the premium league in the world. We see several sources of growth. Firstly, expanding our current portfolios to markets we already have, expanding to new markets and adding new partnerships.

Our business model works on emerging markets, markets that are too complicated for big tech. Primary markets are off the table with our existing portfolio.


I assume it must have been very hard to reach an agreement with Facebook. Facebook management receives thousands of requests. How did you manage to sign a deal with Facebook?


It was very difficult in the early days. But it came along with maturing and recognising the potential in our region, which lead to them contacting us instead. But of course we had been bugging them for several years at that point. The most important thing is to try to find somebody who knows somebody. Peer recommendations work the best. Create some buzz to gain further awareness and finally, be persistent. You will always find a smart person, who is willing to dive deeper and eventually open the doors to you. We were always travelling and attending major ad tech conferences. Trade shows are the key for our industry. DMEXCO is the main event to attend here in Europe if you want to do international business.


What would be your advice for companies who have not started with digital marketing yet or are in the early stages. Where should they begin?


Training is the basis for everything. Understanding what is the role of digital in your marketing process and connecting relevant platforms to that model. And most importantly – find the right people!

When we talk small companies, it would be good to have a managing director who understands marketing and who’s able to discuss this matter with a digital agency. Outsourcing makes absolute sense in the beginning. When it comes to B2B, we’re able to connect our clients with suitable content marketing providers and strategists. Branding and content is essential in this sector.


It seems start-ups and agencies exist on different planets. Why is it so? How could they do business together?


It comes down to business models. Their business depends on digital platforms, which means that if they sell an item for 10$ on Facebook, with a margin of 50% they have 5$ to cover advertising and operations. If you are able to maintain this kind of ROAS – you have endless growth. When it comes to traditional clients like Coca-Cola, who has a huge distribution network of companies, and only 2% goes to marketing. There’s almost no growth. The expertise to handle this type of clients is totally different, the sales cycle is different. You have a set budget for the year in advance. With start-ups, you can increase the budget once you hit your KPIs.

Moreover, it’s a cultural issue. The ability and willingness to adapt to new realities. Big traditional brands are lacking in both of these.