It takes determination to sustain a high-technology start-up in Greece, where the government has been slow to update labour and tax regulations and offers few incentives for entrepreneurs. Yet Alex Moukas, a software scientist with a master’s degree from MIT, decided there was enough talent at home to justify the risk. ‘There are a lot of smart people here plus other advantages 3 a reasonable cost of living and the availability of European Union funding’, Mr Moukas says. However, about 90 per cent of Velti’s business comes from abroad. ‘Many of our clients are multinationals so we’ve developed a global footprint’, Mr Moukas says. Velti opened offices last year in New Delhi, Shanghai, San Francisco and Moscow to support local clients. Velti handles mobile advertising campaigns in more than 30 countries. It works with leading operators, among them Vodafone, Wind, Orange and MTS, which controls Russia’s biggest network. In a fragmented marketplace, it has become a leading force thanks to a proprietary marketing platform that handles the planning, execution and monitoring of multiple-level campaigns across different mobile formats and channels. The latest version of the platform offers 70 ‘templates’ that businesses seeking to cut costs can use for mobile marketing campaigns. Customers also make savings under a software-as-a-service arrangement, or a revenue-sharing deal for a campaign run by Velti, rather than licensing and hosting the platform themselves. ‘This is a new market that moves fast and there aren’t so many businesses with resources to buy a software platform’, Mr Moukas says. Despite its potential, mobile advertising has been slow to take off, partly because usage is still low compared with the fixed internet. But increasing numbers of advertisers are including mobile in their media mix. Simple campaigns using SMS messaging to run competitions or offer product discounts to subscribers have proved effective, Mr Moukas says. According to industry forecasts, the global market is set to grow from around $4bn last year to almost $20bn by 2012. By then mobile subscriptions are expected to reach almost 4bn, covering just over half the world’s population. Velti claims a bigger reach than its competitors thanks to a joint venture with Interpublic, a leading holding group of international advertising agencies. Recent projects included building a mobile community for Johnson & Johnson, the healthcare manufacturer; promoting content sponsored by Vodafone Live! for Disney, the entertainment group; running an SMS contest for cash prizes for MTS; and a campaign for Argos, the UK retailer, allowing consumers to check prices and reserve items using SMS texts. ‘Innovation is key’, Mr Moukas says. As well as spending heavily on research and development, Velti has started to consolidate its position by acquiring smaller competitors using cutting-edge technologies.
1. What are major challenges of managing technology in a globally disperse organisation such as Velti?
2. What is the logic of Velti’s approach?
3. How could Velti ensure that it stays at the forefront of global innovations in this market?