Interview with Jeff Pullen, QFour Digital

Jeff Pullen is founder and CEO of Santa Barbara-based QFour Digital, which recently landed private equity backing from GTCR to buy online advertising and marketing companies. Pullen has a deep background in the online advertising space, having most recently been COO at ValueClick, and was also at Commission Junction. Ben Kuo spoke with Pullen to learn more about his plans for the firm and his view of the online marketing and advertising industry.

What's the idea behind QFour Digital?

Jeff Pullen: I have been working in online marketing technology and services for about five years now, going back to September of 2001, when I joined Commission Junction here in Santa Barbara. As you know, the online marketing solutions space has continued to grow and evolve, and a lot of money is being devoted to using the Internet to build brands, acquire customers, and sell products. A lot of the growth is in overall online ad spend, which has been growing at a faster pace than advertising in general. As a result, there has been the launch of many, many companies in the online marketing space. There are probably dozens, if not hundreds, of companies. There are various segments where people have built terrific businesses, and maybe in their niche great technology and customers--but I believe that the long term survivors in the online marketing services and technology space will be companies with aggregated, multiple solutions who can provide more value to their advertiser clients. There are companies like ValueClick who have been on a strategy to do that, and have done very well in aggregating some businesses. ValueClick is one of the larger publicly traded companies in the space today, but I believe there is a significant opportunity for another player or two. I formed QFour to partner with GTCR to assemble the best in breed companies, that can work together to create value for shareholders, advertisers, and publishers.

How did you decide to partner with GTCR specifically?

Jeff Pullen: The reason for that firm is that I really like their philosophy. If you look at their web site, front and center their tagline is partners with management. Philosophically, they believe the success of their business is finding high quality management and partnering with those managers to build businesses in whatever segment they want to be in. It's management first, deals second. In my particular case, I left ValueClick with no company to sell or buy, but I liked them, they liked me, and we think very similarly on how to build a successful company in the space. So we partnered together and structured a relationship before we had our first company to buy.

Can you talk about how many companies you might be looking to roll up, and what you are looking for?

Jeff Pullen: There are lots of opportunities, but they're not all great opportunities. There are many, many opportunities to evaluate, and we will put together the right strategy with as many companies as make sense. I purposely try to avoid the term rollup, I personally don't think the term adequately describes what we want to do. When I think of rollup, I think of similarly positioned companies all in one space, which is not the objective here. I think the objective is to put together firms strategically in different segments of the online marketing space, but which can benefit from each other--where they can share client relationships, technology, integration, and overlaps, with shared management, shared administrative costs, those sorts of things. The real objective is to strategically create solutions that work together to bring more value to customers.

ValueClick has been doing well, what was your thinking when you left to start your own company?

Jeff Pullen: Really, the thinking was that going through the process of selling Commission Junction to ValueClick, going through the process of other acquisitions--Webclients, FastClick, etc.--that I had created a lot of value there. But, there was still value to be created personally.

Having done lots of acquisitions, what are you looking for in those companies?

Jeff Pullen: I think am on same page as GTCR. We're looking for the right management. There are some big business out there, and we could make some acquisitions and make them successful. The key criteria is the quality of the management team that comes with the acquisition. We want businesses with a strong technology foundation, good reputation, focused on customers, and what is in the best interest of customers. In terms of management philosophy, we want management committed to running a high quality business-that's the most critical thing. We want companies in our acquisition strategy with management teams that are philosophically aligned.

I see you're located in Santa Barbara--it seems like Santa Barbara really is the hotbed of the online advertising industry nowadays?

Jeff Pullen: I have to think that per capita, there are more online advertising professionals in Santa Barbara than anywhere else in the country!

Thanks for the interview!


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