Engagement Labs Inc. (TSX.V:EL) CEO Bryan Segal discusses his company’s eValue social media effectiveness measurement platform that seeks to transform social media programs into actively managed interactions with followers and potential stakeholders for major global brands.
[four_fifth_last padding=”0 0 0 20px”]Listen to the interview with Bryan Segal:
James West: Bryan, thanks for joining us.
Bryan Segal: Thanks. I’m really happy to be here.
James West: Bryan, tell me: what is the value proposition for investors in Engagement Labs?
Bryan Segal: That’s a great question. I think in terms of the value equation for investors, it’s at the end of the day, we have four main key propositions: as far as the value in for investors, is that Engagement Labs has an amazing, addressable market for solution and services. It’s massive, and it’s extremely timely. We have a proprietary new powerful technology that uses value-added data and analytics. We’ve assembled a world class team of executives. We have a great Board, and we have a founding steering committee that’s being put in place with the who’s who of marketers around the world to help us execute. And simply put, we feel we are in the right place, at the right time.
At Engagement Labs, we see tremendous opportunities to play a critical role in the evolution of the massive macro-social-global trend, and at the end of the day, we represent an opportunity for investors to participate in the growth of our company as we endeavour to conquer the task of becoming a staple solution for Fortune 500 brands, and thousands more brand around the globe.
James West: Okay. So you essentially provide social marketing and metrics to branded companies?
Bryan Segal: Well, Engagement Labs has a patent-pending evalu-score which has far exceeded the global standard for social media scoring. At the end of the day, eValue analytics measures the performance of over 75,000 brands and growing daily on multiple social media channels, including Facebook, Twitter, YouTube and soon to be Pinterest, Instagram and LinkedIn. The values scores are derived from the company’s robust and complex algorithm, which evaluates over 300 different metrics that are delivered to us through the social media networks directly, and through trusted APIs and third party networks that deliver key performance indicators hourly.
The algorithm produces an eValue score between 1 and 100, and sub-scores for each brand’s level of an engagement responsiveness and impact.
James West: I see.
Bryan Segal: I was just going to explain to you what those three are, if you’re cool with that.
James West: Yep.
Bryan Segal: So engagement really refers to the degree of participation in the community, and it really reflects of a social media’s channel on how the audience engages with the brand’s content. Impact, which is the second score, is the audience’s response to a piece of content and represents the size of the total audience exposed to the content posted by a brand. And the third, which is my favourite of the three sub-scores, the full power engagement and impact and responsiveness. Responsiveness measures the level of conversation the brand is really ready to commit to. It illustrates how much, how fast, and how well the brand responds to user traction, and how it engages actual conversation through measuring the impact of their response in terms of timing and the quality of response.
James West: Okay. So if I was Nike, then, I would hire Engagement Labs to provide a sense of value as to what impact and what return on investment I was getting from my social media campaign?
Bryan Segal: Yes. So if you were Nike, you’d use us for several reasons. Two major case studies would be the first of what we’ll talk about. So if I’m the CMO of Nike and I have Nike brands in every centre around the world, I’d want synergistic measures and analytics to tell me with an apples-to-apples comparison on what Nike Canada is doing versus Nike US, Nike Brazil. So if we’re doing something right in each one of the countries, how do we use the singular analytics system to help us drive synergies across the globe to optimize our social media channels?
The second use case is, if I’m Nike, I’m going to want to understand what Adidas is doing and what Reebok is doing to help me deliver a best-of-breed solution, and if I’m the CMO I’m going to want to say Reebok is doing this, and then we’re going to need to increase our strategies, increase our paid media, our earned media, our own media, to really deliver a solution that will make us top of mind when consumers are looking for our brand in the social media channels.
James West: Okay. So tell me: at this point, what is Engagement Labs’ level of evolution? Do you have clients, do you have revenue, do you have profit?
Bryan Segal: Yeah. So our evolution is actually pretty early in the game. Right now we have about 40 clients at Engagement Labs, and I think it all kind of resonates in terms of a little bit of a timeline that I’m going to bring you. So Engagement Labs has been around for five years, and it was an idea that was a little bit ahead of its time, however, years of R&D have really helped to position the company tremendously for what now represents a massive opportunity.
In 2014, we released a minimum viable product, “eValue” in the market, and now in 2015, the product and the company are poised to capitalize on this.
A year ago, in January 2014, there was really a changing of the guard at the company, and we saw that Canadian technology and media venture capitalist Scott Paterson, who was a Board member at Lions Gate Entertainment Corp. (USA)(NYSE:LGF), chairman of Symbility Solutions Inc(CVE:SY) and vice-chair of NeuLion Inc (TSE:NLN), became chairman of the Board, and also recruited several other Board members including Sheldon Pollack, vice-chairman; Rob Dickson, who is the number two guy behind Miles Nadal at NBC Partners in the US; and also Mark Saltzman, who’s a regular commentator on CNN and columnist for USA Today and New York Times.
Then the Board recruited the steering team, which I talked about which are the who’s who of marketers around the globe, headed by the CMO of Aimia Inc(TSE:AIM)Aeroplan, who was the previous CMO of Rogers, named John Boynton. He then recruited Martin Riley, who’s the president of the World Advertising Foundation. There’s also Daryl Simm, who’s the CEO of Omnicom Media Group [Omnicom Group Inc. (NYSE: OMC)];Pete Marino, who’s the chief communications officer at Miller Coors; and Chris O’Neill, who’s the head of global business operations at Google (NYSE:GOOG).
Then in terms of the timeline, I got hired next, as CEO, on December 1st, coming from 14 years of experience at heading up the sales at COMSCORE, Inc.(NASDAQ:SCOR)(Canada). I was brought on board to really bring this company to the next level in terms of the ability to monetize and bring our company to the next level in terms of capitalizing on our great technology.
And then from there, now that we have all these human resource acquisitions in place, we’ve started to tell our story to investors and to the market and to clients, and it’s been resonating very well.
James West: Good. So, how much money do you have in the bank, and how soon until you achieve a cash-flow-positive state?
Bryan Segal: We have not yet provided our guidance to the market, and so not really at the space where I can share that information with you.
James West: Okay. But you have sufficient capital to execute on your business plan, or are you in a position where you’re going to need to go to the market and raise capital soon?
Bryan Segal: In the short term, we have enough capital to go through our business plan, but in the near future, we’re going to have to raise some capital.
James West: Okay. So let me ask you: in the competitive landscape, who is the 900-lb gorilla that you’re going to compete with in Canada?
Bryan Segal: Well, I think ‘in Canada’ is probably the smallest of our opportunities, given the global nature of social media, and so I think it’s one of the greatest fallacies and and opportunities for Engagement Labs. I’m going to walk you through sort of the competitive landscape.
So up to date, Engagement Labs has 40 clients; a lot of it has been focused on a lot of local Canadian, Montreal players, and as we all know, the biggest advertising market in the world is in the USA, and so where our core focus is going to move to the USA, Europe and Latin America, which is one of the hottest social media markets in the world.
In terms of competitive landscape, it’s sort of like a three-tiered process. So, about five-six years ago, actually there was two major players in the market; Sysomos and Rad ian6, and they were very much listening and monitoring tools. At the end of the day, people want their tools to understand how many times people mention Coke in social media and was that a positive, negative or neutral comment.
And then the industry sophisticated, had players like HootSuite, Social Bakers, Lithium , and a couple of other players came into play, and they got into the condition to what Sysomos and Radian6 had; they became a little bit more about monitoring and reporting, and they have been around and quite successful.
Then later on a company like us, Engagement Labs, who’s really into all of the things that those guys do, but in addition, we have a differentiator, which is our social media scoring based on four and a half years of R&D. At the end of the day, what we’re trying to do is deliver and build a currency that can help marketers understand and optimize on their social media investments.
So the great thing about this sort of field, it’s not a zero-sum game. So if you bought Sysomos or Radian6 for listening, you would want to buy Engagement Labs on top of that, through our eValue tool, to help understand the scoring. And they go after different audiences, so where a lot of those tools go to social media enthusiasts, art schools really banked on trying to get to the CMO or senior level marketer, who uses tools like Nielsen for TV ratings, who uses ComScore for digital ratings, would use our tools for social media ratings.
James West: As an investor in Engagement Labs, what catalysts am I looking for in 2015 that are going to add value to my investment?
Bryan Segal: It’s a great question. I think for us, social media is super disruptive in terms of an opportunity in the marketplace. You know, one of the things about social media is, if you do social media wrong, it amplifies as a brand. So you will get put over the fire if you’re doing things wrong and not responding to clients; if you do it right, their success in ROI is amplified even more. And given our spot, we think we have a tremendous opportunity to play a critical role in measuring this.
So I think for us, the great opportunity is that we now have a product that’s ready to go-to market, and that we’ve been putting out a lot of press releases and getting a lot of steam, and I would think for us, the greatest opportunity is that we’re now going to market, and this is a great opportunity in terms of being able to get involved in what we do, because we’re aspiring.
One company or several companies won’t be this as the social media currency. There’s a lot of money in play in terms of behaving and delivering that sort of metric to marketers because they’re all looking for it.
In addition, obviously we’re spending a lot of money on marketing and sales, and that will just deliver greater opportunities as we move beyond some local, Canadian opportunities and move to global opportunities, especially in the US, Europe and Latin America.
We’re just starting, and we have a really big head start in terms of our opportunity given all the R&D we’ve put into our technology. We have a great opportunity given the validation we’ve gotten from our steering team. We have a great Board. And now we’ve changed the senior management of the company, and now we’re coolly focused on setting and being the global standard in terms of social media and scoring.
James West: Okay. Well, that’s a great first interview. Thank you very much, Bryan. We’re going to catch up with you in a few months. Thanks for joining us today.
Bryan Segal: Cheers. Thanks, and have a great day.
James West: You too. Bye bye.
Bryan Segal: Bye.
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