MarTech Interview with Nick Pinks, CEO at Covatic

Nick, please let us know how you navigate challenges in the rapidly evolving AdTech industry as the CEO of Covatic.
When it comes to the AdTech industry, technological updates and regulatory changes are almost a weekly occurrence so, being adaptable in the face of challenges has been imperative in Covatic’s journey as a company. After investing in years of R&D and testing, we now have a product that uses on-device technology to learn about audiences and assign them to cohorts based on the activity on that device. This means that their personal data is kept totally secure by never leaving their device and that advertisers can use what they know about a group to address the right ads to the right people, without knowing who is in that group, or what other groups they belong to.

By not having to create large, expensive, and complex identity tracking systems – the current industry standard – we are solving the age-old advertising aspiration of reaching the right person at the right time, all while protecting the privacy of the user.

How has Covatic’s vision evolved from its founding until now, particularly in the context of shifting away from private data ownership?
Covatic was founded on a privacy-first model so I would say we were more prepared than most for today’s shift away from identifiers that rely on access to personal data. We’ve always championed the fact that consumer privacy is a fundamental right and should be the foundation on which an advertising solution is built, rather than an afterthought. In a world where, until now, data has been ruthlessly used for profit, we have chosen the more responsible and sustainable path. We’ve also extended our platform to avenues including CTV and smart speakers, building on our commitment to provide advertisers with access to highly addressable audiences across devices, while always allowing consumers to retain control over their identifiable personal information.

How do you leverage streaming and smart speakers to provide advertisers access to hard to reach audiences?
Covatic’s early investment in a scalable architecture has enabled us to extend our innovation to audio via smart speakers and offer the only on-device, addressable solution to learn about the behaviors and interests of the users of those devices. For example, our partnership with Octave Audio has supported brands like Samsung and ASDA in maximizing addressable reach among target audiences across multiple platforms and generating new revenue. Our technology is now integrated into all of the Bauer Media and News Broadcasting radio apps served by Octave Audio – such as Talksport, Greatest Hits Radio, Virgin Radio, Absolute, and Kiss – and uncovers insights and patterns to be leveraged by advertisers to reach high-value audience segments.

Can you explain how Covatic’s privacy-first technology works without relying on cookies, ID, or tracking?
Compared to ID-based solutions that typically entail substantial data exchange and identification, Covatic’s on-device solutions prioritize privacy by eliminating the exposure of personal data. In our approach, all of the processes occur locally on the user’s device, so there’s no need for cookies, IDs, or tracking. Instead of sending data to a remote server, all inputs and processing remain within that device. The major benefit of this approach is that it only requires the exposure of cohorts to which an individual belongs, giving advertisers access to far more data and the ability to reach new audiences in clever ways.

For example, if the app determines that I’m into sport, the ad request would simply include me as an anonymous fan without giving away my identity or what else I am interested in. This approach protects the user’s privacy while fulfilling the necessary ad targeting requirements to determine what campaigns they may be receptive to.

How do you prioritize diversity within your business model and overcome barriers to entry in the AdTech industry?
Diversity within the AdTech industry is still a massive issue and something I’m very passionate about so we try to address it right at the source with our inclusive approach to recruitment. Thanks to this, today 46% of our team are from diverse and international backgrounds and 44% of our workforce and 33% of our board are also female. We support team members completing part-time degrees and regularly take in trainee-level college students to make careers in AdTech more accessible. We have also recruited from Code Your Future, who help refugees find their first jobs in the UK.

What benefits does Covatic’s approach bring to both advertisers and users?
Making ad decisions locally means we don’t have to track users across the internet, use third-party cookies, or collect and process personal data on our servers. By processing data only on a user’s device, we offer a more addressable, effective, and private fix. An on-device solution makes it easier for publishers to understand the incoming data, how audiences and segments are determined, and the resulting insights, enabling them to effectively communicate the value of their offerings to agencies and advertisers. Ultimately, the benefits for consumers are twofold; their personal data is kept totally secure and they get more personalized and engaging content, which in turn produces better outcomes and ROI for the advertiser.

How does Covatic view its role in the Birmingham tech ecosystem, and are there local initiatives it’s involved in?
Covatic is a home-grown operation, headquartered in Birmingham and we are active members of the West Midlands business community, nurturing tech and innovation outside of London. As a Board Member of Create Central’s Governance Group, we work together to bring the media industry to the region. Our work here has put Birmingham on the map, proving that start-ups don’t have to be headquartered in London or San Francisco to succeed. The Mayor of the West Midlands has hailed Covatic as a forward-thinking tech company for this reason.

As a B Corp company, our commitment to the environment and the region has led to a strategic partnership with Birmingham City University, involving joint Research and Development programmes, externally funded PhDs, and graduate placements. Covatic has also teamed up with the BBC and taken in three tech apprentices as part of the BBC Apprentice Hub programme, to plug the skills gap in the creative, cultural, gaming, and digital sectors across the West Midlands, focusing on under-represented groups.

What were the key challenges Covatic faced in implementing privacy-first technology, and how were they addressed?
Covatic actually started with a product built for media companies to deliver appropriately timed content to match context e.g. commuter journey time. However, once the COVID-19 pandemic hit and most of the world stopped commuting to work, large contracts stalled, and a funding round we had been working towards ground to a halt.

At that juncture, the advertising industry was starting to face complicated privacy issues and we recognized our technology’s potential to resolve them. So, we pivoted our business strategy in the midst of the pandemic to focus on R&D for our unique technology. That’s how we built a world-class software development and data team in the West Midlands, specializing in advertising and on-device processing. Now, our capability rivals US tech giants, and our solutions are influencing some of the world’s largest media companies.

How does Covatic collaborate with industry stakeholders to ensure data security in an era of growing concerns?
We are active members of the IAB and IAB Tech Labs, engaging with industry-leading companies to help them focus their efforts on Privacy Enhancing Technologies (PETs) while maintaining their revenue objectives. While putting privacy first, we have delivered exceptional results for clients like Octave Audio, with the partnership generating new revenue hitting the six-figure mark and a 70% growth in monthly ad spend from tier-one advertisers.

Looking ahead, what are the key goals and strategies Covatic has for the future in the evolving landscape of technology and advertising?
Covatic is challenging the status quo, and we’re determined to shape a better advertising ecosystem, even if it means going up against some of the biggest players in the industry. We’re more about actions than words when it comes to prioritizing ethical practices and social responsibility alongside effectiveness and ROI, which is why it is so ingrained in our engineering DNA. Our goal is to create a digital world where advertising adds value without compromising privacy or security and to future-proof investment for advertisers looking for effective and sustainable AdTech to ride out regulatory changes. Looking ahead, we don’t intend to be restricted by ongoing caution in the market. We are refining our product suite and enhancing our capabilities for connected TV. This will allow us to work on major projects with our existing clients in 2024 and further cement our footprint in the US market.