June 2009 – Taking Online Shopping to New Heights

President and CEO Bob Westrope discusses why CentrSource SA is
regarded as the one to watch in the online marketing space.

By Robert Logie

“CentrSource could be to advertising, what Google is to search,” says Rob Woodrooffe, CEO of Interwood Direct in Toronto, Canada.

That’s a bold statement when you consider the level at which Google is regarded. Yet, in its lead market of Slovenia, CentrSource SA has demonstrated that its novel approach is a force to be reckoned with and is now readying for its move into Hungary this summer, and expansion into other European and American markets later this year. There is a growing consensus that CentrSource SA may be one of the new stars of the Internet to keep your eye on.

CentrSource is a new online shopping search platform—a meeting place for advertisers, consumers and media—that launched earlier this year as a venture between founder and CEO Bob Westrope and Sandi Cesko, founder and chairman of Studio Moderna.

The origins of CentrSource come from a very simple predicament: A shopper’s frustration with the results returned by major search engines. Type in “shoes, London, special offer” and you will receive literally thousands of results, all of different types, some out of date and some probably not even in the same country.

How would you know which shop has the best deals on shoes on a given day? You’d never be able to find it. That’s where CentrSource comes into play.

Electronic Retailer spoke one on one with Westrope to discuss why he believes CentrSource will be the next big thing to happen on the Internet.

Electronic Retailer: What is the concept behind CentrSource SA?

Bob Westrope: Where traditional search engines assume that the challenge is to efficiently parse relevant results from billions of existing web pages, our key assumption is that virtually no tactical, local “offers” ever make it on to the Internet because of timing, logistics and cost limitations. Accordingly, the content that drives most consumer shopping behavior can’t be found by the search engines because it doesn’t exist. Just as electronic markets have been created for equities traders, we recognized the same opportunity exists to provide consumers an electronic market for shopping.

However, we believed that what was absent was content. The “deal” content of a lunch special, or a dealer discount at the end of the day on a Friday, never makes it onto the Internet. I walked past a local whisky shop recently that had a one-week-only special offer on single malt Scotch whiskies, and I just wondered, “how many people will know about that great offer? Probably only those fortunate enough to walk past the store.”

But that’s not the whisky shop’s fault. What was missing was an infrastructure, a mechanism or resource to facilitate this kind of local, time-sensitive advertising—and that’s a large part of where CentrSource came from. CentrSource is, in fact, what I call a “hyper-local shopping search portal.”

ER: Described by a commentator as a “YouTube for advertisers,” CentrSource is considered a meeting point for advertisers, consumers and media. What makes your company so unique?

BW: Something that gives CentrSource its unique position is the fact that we wanted to create an equal meeting point for advertisers, consumers and media. I’ve already mentioned the consumer angle, but what CentrSource does for the advertiser is offer a platform for advertiser-generated content. We enable them to post video, images and graphics and create local, time-sensitive, or globally targeted offers—and we enable them to do it for free.

The only time the advertiser has to pay for using CentrSource is when a consumer chooses to act upon his or her offer.

And it’s not just as simple as “buy or don’t buy.” We recognize that the consumer is in control and isn’t always in a buying frame of mind, but may be interested, so CentrSource offers a large variety of different offer responses and actions, ranging from “I’m ready to buy, take me to your checkout” to “please send me a brochure,” “please call me at 2 p.m.,” “I’d like to arrange a test drive at 11 a.m.,” or “sign me up to your e-mail database.” The list is huge.

We give the advertiser the most full-featured listing (really, a microsite) on the ’Net. Offer placement is free; the advertiser only pays when a consumer chooses to act. It’s fully pay-for-performance.

ER: How do you drive traffic to CentrSource?

BW: This is perhaps our biggest competitive differentiator. Absolutely core to generating traffic on CentrSource are what we call community partners. These are typically media organizations that want to monetize their audience: magazines, newspapers, web portals, TV stations, NGOs and even shopping channels.

CentrSource is actually a network of co-branded, interconnected shopping search portals, each powered by a trusted media partner and representing a community of interest. And each media partner is highly motivated to drive their traffic to their CentrSource portal. For example, a radio station is faced with the challenge of monetizing its audience, but with dwindling advertising revenues, it’s hard for them. We give them their own co-branded CentrSource site, they drive their audience to it, and advertisers choose them as a relevant media partner and associate their offers with it, and consumers go to that CentrSource site because it’s a trusted media brand that fits their interests. So there is a far, far higher relevance of offer for them. And we have proven the concept in our launch market of Slovenia, where we now have over 30 community partners, across many different user groups and communities. For example, we have both Playboy and Cosmopolitan as community partners, which obviously both have very different readerships and communities of readers, with different tastes and buying habits. If you’re a gadget store, car company or whisky store advertising, it’s going to make most sense to associate your offers with Playboy; if you’re a cosmetics business, a ladies’ shoe shop or jewelry boutique, then your readership is most obviously going to be closer to Cosmopolitan than Playboy. It’s important to remember the consumer still has access through any of the community partner sites to all other offers across the entire CentrSource network. It’s vast and it’s an incredibly powerful local and global shopping tool. To become a community partner is completely free. Their online application simply needs to be approved by us, and their shopping portal can be live in just a few hours. The partner then earns a share of lifetime revenue generated every time an advertiser pays for a consumer response on his or her CentrSource site. It’s as simple as that. It really is a level playing field for the advertiser, consumer and media. And that’s what we’ve proven over the last several months in Slovenia. CentrSource now has a consumer reach through its network of community partners that is greater than the population of Slovenia.

ER: Why might an advertiser be compelled to use CentrSource? BW: CentrSource’s self-service, YouTube-like capability means that both global companies and home-based businesses can tap into a marketing platform where most of the friction of participation has been eliminated. There is no reason why the advertiser could not take any promotion and extend its life and reach by putting it on CentrSource.

CentrSource creates a customized ‘skin’ for each community partner and features video and social networking. Robert Logie is editor of ERA Europe’s eNewsletter, NewsShop.

Advertisers can create massive amounts of free content that can then be accessed by consumers; consumers can finally find “live” and locally relevant content that saves them money. And this want/opportunity is all the greater in the current recessionary environment. For the direct response marketer, this enables even greater targeting opportunities, and even greater use of your video material. Your media is no longer just your allotted time on TV—CentrSource enables you to post your video after it’s been on air and target it to a suitable media for your audience (or test a new audience). You will find motivated, relevant shoppers who will be able to watch it over again, rate it, forward it or buy from you directly. And remember, the act of posting your video costs nothing—you only pay when the consumer acts, which as we all know is manna from heaven for the direct response marketer—it’s all measurable! And it’s a fantastic bridging point between direct response and brand advertising.

ER: What makes the CentrSource model different from other online retailing business models? BW: Our critical differentiator is that we see existing media as still dominant, and we see it as the party that we want to empower with our affiliate technology platform. We believe that the optimal solution is to empower the existing stakeholders with a new and inherently efficient engagement mechanism that is by definition self-adapting and fully customizable. This sets us apart from virtually all other competitive models that are based on closed market, proprietary offerings with top-down adaptation—that in the end threaten the viability of existing media. Instead, we are convinced the best solution is to power an open market and inclusive ecosystem that promotes innovation and adaptation from the user base up. For viral marketing to work, everybody’s wheels need to be greased, and this is what we’ve worked very hard to achieve with CentrSource. Our first job has been to create a world-class toolkit, and I believe our experience in Slovenia has demonstrated that we now have that. I consider myself first and foremost a direct marketer, and CentrSource was purpose-built for people in that marketing discipline. The reality of it is that no one knows how to sell to the consumer like direct response marketers, and that’s what makes this the perfect tool for them—it’s targeted, it attracts motivated consumers, it enables re-use of existing content, it’s measurable and it’s totally pay-for-performance! Robert Logie is editor of ERA Europe’s eNewsletter, NewsShop.