Arkansas move let ad-tech firm get back on feet
Inuvo may not have begun in Arkansas, but the digital publishing and advertising technology company purposefully selected it as its home.
And that location, its leadership said, has been a crucial factor to its success. This company was once on the verge of bankruptcy with $13 million in debt, has remade itself several times, and now has over 90 employees in two locations and plans to make about $100 million in revenue in 2017.
Rich Howe, Inuvo’s CEO, first came to Little Rock to work as chief marketing officer for Charles Morgan at Acxiom in 2004. After Morgan retired a few years later, Howe left as well and ended up in 2008 at a struggling publicly traded company about to go bankrupt called Kowabunga! in Clearwater, Fla.
“I looked at it and said, ‘Hang on, I see that this thing is a mess, but there are some pieces here that look really cool that we could build a business around,'” he said.
Though it had been mismanaged, he saw a path to success by focusing on the solid assets and getting rid of the rest. Those original components he identified back in 2008 remain the cornerstone of Inuvo’s advertising technology business today.
He also recruited some former Acxiom colleagues, including current Chief Operating Officer Trey Barrett; and Charles Morgan, who remains Inuvo’s lead independent director.
When Howe asked Morgan to come on board, “I said you’re a public company, and I’m not going to be part of any more public companies,” Morgan recalled. “But he kept after me and against my better judgment I went ahead and got on his board and invested in the company. I figured, Rich is a smart guy. Eventually he’d figure out how to make the business successful.”
It was like starting a business from scratch but harder, Howe explained, “because I had the baggage of a legacy business, like $13 million in debt.”
But they put their heads down, changed the name to Inuvo, (a play on the words innovate and nouveau–French for new) and ultimately paid back the debt.
Then they set about shifting their entire strategy by acquiring a company called Vertro in 2012 and relocating to Vertro’s headquarters in Manhattan.
Until this point, Inuvo had been an advertising technology company focused on the complex behind-the-scenes work of getting ads to the right people’s desktops and devices.
“It dawned on me that if I owned my own publishing business then I could test my advertising technology,” Howe said. One of the biggest problems in advertising technology, he said, is finding publishing partners willing to test products, which costs time and money, he said.
The Vertro merger facilitated the strategy by acquiring the digital publishing brand ALOT, which Inuvo still uses, as well as an all-important relationship with Google and its advertisers.
With an in-house digital publishing arm, “I don’t have to ask anybody. If I get enough consumers then I have a laboratory. And if I’m making money on it, then others will too.”
Alongside its data scientists and engineers, Inuvo employs writers, photographers and videographers — a competitive advantage in a crowded advertising technology sphere, Howe said.
Today, the company has about an even revenue split between the two segments: digital publishing and advertising technology. Inuvo recently made another change by purchasing NetSeer, a Silicon Valley advertising technology company with patented algorithms and experienced data and engineering employees.
“We like both our children, just so we’re clear,” Howe said. “But I think we would mislead people if we didn’t also say that we built this business with the ad tech side mostly in mind.”
Back in New York in 2013, another big change was in store for Inuvo. As Morgan put it, “Doing business in New York is a hard row to hoe.”
Howe explained that after the move north, “Instead of heading up, [Inuvo] started heading down. The concern wasn’t related to the strategy. The strategy was sound. It was execution on the strategy.”
“I almost got to the point of exiting and washing my hands of the thing because it was not successful,” said Morgan. “A lot of it was because of the lack of good, hardworking people and the cost structure of New York.”
The question they asked themselves, said Howe, was “are we able to compete in our market when everyone else is better funded than us? And the answer was no.”
In order to try to save the company they decided to mitigate their costs and head back to a familiar place — Conway.
Thanks to an economic development package from the state, Inuvo was able to relocate to Arkansas in 2013, though none of its New York employees opted to relocate with it. Again, the company was practically starting from scratch.
“Our reason for coming to Arkansas was, in large part, predicated on us knowing we had good resources here. We had good people who were loyal and hardworking,” said Howe.
Citing the community he had gotten to know through Acxiom, he said, “We knew that if we put a sign up here and said we’re going to hire, we would get some good people.” It also helped that Morgan’s current company, First Orion Corp., had some extra office space in Conway.
Howe added they were aware of the rounds of Acxiom layoffs in Arkansas.
“If they were going to let them go, maybe we’re going to pick them up.”
Inuvo now employs 11 people with past experience at Acxiom.
“It was exciting to be taking principles I’d learned in direct marketing [at Acxiom] in the 1980s and 1990s and watch them emerge in the digital space,” Barrett said. “It was just like deja vu to me.”
“It still amazes me the things I see now that I saw happening 20 years ago,” he said. “Companies still want to make sure they get the right message in front of the right audience.”
The change in time frame has been especially dramatic, he said, pointing to previous direct mail campaigns that took months to plan, analyze and adjust.
“Now we’re making adjustments daily, hourly, on the fly and seeing the results instantaneously. In the direct mail world we saw those changes across what was now glacial time, now,” Barrett said.
After a few years in Conway, in 2015, First Orion and Invuo both moved to downtown Little Rock.
“Conway was great to us. We love Conway,” said Howe. “It was really just a practical move.”
They decided that in order to set themselves up to attract the most talented employees, in state and out, a central, urban location would be crucial. Since then, Howe said, Inuvo has found its stride.
“We’re going to be almost $100 million in revenue this year,” he said. “It’s astounding. How many groups of people can claim they were part of building a $100 million business from zero?”
Riccardo Boscolo, a founding member of NetSeer’s engineering team who is now Inuvo’s vice president of engineering and data science, said some people in Silicon Valley had some “preconceived ideas” about Arkansas.
“We initially had some concerns, but in the end all those concerns were gone,” Boscolo said.
“To put it simply, these guys know what they’re doing,” Boscolo said.
Howe added that “something went right, and I would attribute the majority of that ‘going right’ to Arkansas.”
“Our decision to move here was the best decision we made, by far,” he said.