Intervista a Martin Lorentzon - fondatore di TradeDoubler

Martin Lorentzon is one of the founders of TradeDoubler, maybe the most important and the oldest affiliate marketing company in Europe. Many people have smiled at the idea of performance based marketing and many still think it is a dangerous idea for advertising in it's traditional form. Let's thus listen to the words of a person who has believed in a model before most of us were aware it even existed and still believes in this model. Some people keep smiling, but the truth is that performance based marketing is growing non-stop.


1. The best way to start off this interview would be to say something about yourself. Our readers will be familiar with TradeDoubler, but it would definitely be interesting for them to understand something of your background: what you studied, where you worked and what experience led you to setting up radeDoubler?
I have studied both economics and technology in Gothenburg (on the west coast in Sweden). I have a long internet related background in companies such as AltaVista (search engine), Telia (Sweden’s main telecom operator) and Cell Venture (a venture capital company within the Internet). In the last position I tested many e-commerce sites and understood how hard it was to generate sales for an e-commerce site. Thus I started to think about performance based marketing.


2. Ok, for the few people out there that do not know what TradeDoubler is can you give summarize it in a few sentences?
TradeDoubler is an automated system which connects thousands of advertisers with thousands of traffic driving publishers. When someone clicks on the link on the publisher site, TradeDoubler starts the tracking technology, following the consumer to the advertiser site. If the consumer buys something on the advertiser site, then the advertiser pays a commission to the publisher and to TradeDoubler. Therefore we call it performance based marketing.


3. What is your role in TradeDoubler today and what are your strong points within the company?
I have recently quit my position at TradeDoubler, but remains as one of the largest private shareholders. I am very positive to TradeDoubler’s future.


4. Let's now go back a couple of years to a time before TradeDoubler existed. Can you tell us something about it's early history when you were drawing up a plan for an affiliate network? What opportunities did you see? What difficulties did you face? What did you fear most at the time?
Since it was so hard to generate sales for an e-commerce site, of course I saw a very big potential in what TradeDoubler is doing. Still I see a big potential since e-commerce is still growing, Internet takes advertising money from newspapers and television, internet penetration gets higher, new markets like Russia, India and China start to take off, etc.

In the beginning it was hard to explain our business model and very few people really understood what we were doing. We didn’t have any publishers or advertisers, so it was like a moment 22. The thing I feared most was if the company would go into bankruptcy and if I had to give up my vision.


5. One last question regarding TradeDoubler. The affiliate marketing arena is already quite crowded, yet new players seem to join the market every year and old players are expanding abroad. adcatch (Deutsche Telekom group) has just launched in Germany and LinkShare is opening offices in Europe. What challenges does TradeDoubler face? What competitive advantages does it have and how is TradeDoubler going to react to these challenges?
I personally think TradeDoubler should continue with the plan they have had the last years; to work on a European basis with a very strong support focus on the advertisers and publishers. There are always popping up competitors and to be honest, no one cares! Linkshare, Commission Junction, BeFree, etc have tried to conquer Europe the last 5 years and they still try to conquer. The biggest challenge for TradeDoubler is to keep all good employees.


6. Advertising on the Internet has had it's ups and downs. There was none at the beginning, then simple banner advertising was commandeering exorbitantly high prices, the media lost faith in online advertising next, but is now somehow regaining trust thanks in part to Google AdWords. What do you think is the future of online advertising?
The future of online advertising looks very bright! People spend more and more time on the Internet and advertisers have now understood this. Therefore they move the money from offline to online. And the Internet media is now the only media where you directly online could measure the results and optimize them in real time.


7. Marketing on the Internet is still a very young field and business models are changing very fast. Is affiliate marketing as we know it today in it's most mature form or will it evolve further? If so, how?
I think the tracking technology will get even better and more precise, and all campaigns will be updated in real time based on certain criteria. Search, price comparison, search engine optimisation, etc will also develop quite fast. Maybe also the big media agencies such as WPP, Aegis, OMD, etc will move more into this arena.


8. For our final questions I would like to extend the scope of our interview and have your opinion on a more general topic: the Internet. In the last 10 years the web has undergone incredible changes yet is still based on the old TCP/IP: what do you think has been the greatest innovation and why?
I think the protocol TCP/IP in itself is the greatest innovation for the Internet. Still, it is the absolute best way and best protocol to do the communication on the Internet. Other good innovations are payment methods, search, information libraries, email features, instant messaging and general ways to sell different stuff on the Net.


9. The Internet has survived dotcom booms and dotcom bubbles and is now on the verge of a second boom while at the same time been threatened by a net neutrality bill in the USA. Where do you think the Internet is headed?
I think there will not be a second bubble. The major difference compared with the year 2000 is that the business models now are very solid, companies earn real money, the revenue/cost structure is under control and the people in the world want to spend a lot of time on the Internet.


10. Let's finish this interview with a hypothetical question. Imagine you could go back 10 years with your current know how: with the exception of TradeDoubler what company would you like to have set up? Why?
I like communication in all different forms, so I will say ICQ, Hotmail and Skype!