Spotlight on: Purch

Maxime Cordier in Advertising

in Advertising

Purch is a US based digital company which has been increasingly gaining attention lately due to an injection of cash from investors. ADTEKR focuses on Purch for the latest Spotlight article to discover why the company is so valuable.

purch

In the advertising industry, original business models are the rule rather the exception, as the $135 million recently raised by Purch demonstrates. As a business at the cross-roads of traditional advertising, e-commerce, and digital advertising, Purch’s growth shows no signs of slowing.

What does Purch do?

Purch combines digital advertising and e-commerce through the portfolio of websites it owns and operates. These sites, most of which are product review sites, connect buyers to sellers using a data-led platform which makes product information more digestible for consumers, whilst allowing sellers to advertise their products to a large audience.

Purch sites are primarily targeted at engaged or inquiring customers, who are likely to research a product thoroughly with a view to purchase, rather than browse leisurely. At the end of a product review, Purch’s websites enable readers to buy the product on its affiliates’ platforms. This allows Purch to make the difference on its market position, avoiding the slippery slope of competing with its natural competitors, the price comparators.

A brief history

Created out of the merger of Techmedia Network and Bestofmedia Group, Purch has grown up as a highly scaled and profitable company, with 350 employees based in the US, the UK, France, Germany, and Italy. Driving over $1 billion of commerce transactions annually, Purch can claim the largest IT Decision Makers (“ITDM”) audience among major tech publishers.

Purch’s website portfolio, made up of tech and science major players (Tom’s guide, TopTenREVIEWS), reaches over 78 million people a month. Therefore, it comes as no surprise that Purch, whose revenue came in at just under the $100 million mark last year, is on track to meet its $100 million target for 2015. The company is seeing the success of its content and commerce hybrid approach, as reflected in its revenue composition which is almost 50/50 between e-commerce and traditional advertising.

What makes Purch unique?

Purch’s business model relies on the assumption that native advertising will attract just the right audience of buyers to sellers’ platforms. To this end, Purch distils a sensible dose of editorial reviews in its native ads.

The “Purch Performance Package”, which combines advertising and editorial content, seems to produce material effects. According to Purch’s Chief Revenue Officer (CRO), Mike Kisseberth, ads on sponsored pages have a Click-Through rate (“CTR”) of 10-20%, far above the industry average of 0.5%.

A bright future for a company that has already tripled in size over the past two years

As is the case for many thriving tech firms, Purch has a highly targeted acquisition strategy – in the last 12 months alone it has acquired online magazine AnandTech and mobile shopping app Consumr. This strategy has been validated by the market, as evidenced by the results of the third round of investment – which brought Purch’s total funding to $175.5 million.

Purch gives itself the intellectual resources needed to match its ambition. The board recently welcomed two new members, Martin Nisenholtz (former digital head for The New York Times Company) and John Stellato (current board member of Yellow Media, Postmedia Network and RealMatch).

Purch’s growth expectations for 2015 are encouraging, flying up by 15% in the UK according to Purch’s VP Sales Europe. This is generally good news for native advertising, which is an increasingly popular tool in the marketer’s arsenal, despite calls for improvement of transparency. If all goes as planned for Purch, the growing popularity of its brands will undoubtedly demonstrate the flourishing potential of native advertising.

Spotlight on: Purch was last modified: August 27th, 2015 by Maxime Cordier