Saturday, February 12, 2011
Social Selling
Wednesday, July 14, 2010
Marketing faces more data, more demand for analytics
Marketing faces more data, more demand for analytics
By Jim Schakenbach, Special to Mass High Tech
This is both a scary and exhilarating time to be in marketing and advertising, depending on your perspective. The meteoric rise of social media and the growing consumer power associated with it have been compounded by the proliferation of niche media channels and the diminishing impact of traditional broadcast and general interest media. As a result, marketers and advertising agencies are under increasing pressure to produce meaningful, measurable marketing campaigns to reach fractured target audiences.
As marketing professionals struggle to make sense of the expanding stream of data flowing from a wide variety of sources and platforms, it appears that the sector is entering what perhaps can be called the Analytics Era. Growing numbers of IT companies, software developers and advertising agencies are racing to aggregate, integrate, analyze and understand an astonishing amount of data from marketing programs, advertising campaigns and product purchasing reports.
They are attempting to turn all that data into usable information that can provide clues for creating even more effective messages and channels to influence consumer spending.
“As more devices and channels become available, it presents new challenges to marketers and advertisers,” said Kiki Mills, president of the Massachusetts Innovation & Technology Exchange (MITX) in Cambridge, an Internet business and marketing association. “Everyone’s collecting data, but how can they get meaningful data? That’s the bigger question.”
In response, new applications and technologies are emerging to manage and manipulate data throughout the entire promotion and purchasing process. It is perhaps no coincidence that several of this year’s MITX Technology Awards went to companies involved in some aspect of data management and analytics, including DataXu of Boston, an online advertising optimization platform developer and Modiv Media of Quincy, which is developing in-store systems for delivering targeted, real-time promotional and purchasing information to consumers.
MITX online advertising category winner DataXu is a company that is “taking a lot of data from the Internet — a lot of consumer data and media data and applying machine learning to basically recognize consumer patterns and media patterns that correlate to sales,” according to CEO Mike Baker. DataXu’s patent-pending technology was developed at MIT by its founders, creating a platform that uses real-time consumer preference data to value, bid-manage and buy ads on an impression-by-impression basis, across online ad exchanges operated by Google, Yahoo and others.
A little over a year old, DataXu is backed by Boston’s Flybridge Capital Partners and Atlas Venture, as well as West Coast venture firm, Menlo Ventures. The company launched in September 2009 at the TechCrunch50 conference in San Francisco, where it was recognized as having one of the top 50 hottest new products.
In a similar vein, Visual IQ Inc. of Needham, helps ad agencies, marketing firms and advertisers mine the growing glut of data across expanding media channels to better understand customers and determine how to reach them. As a former advertising executive, Visual IQ CEO Manu Mathew said he understands the pressure to find the most efficient channels.
“Today, to effectively reach the consumer, (you) have to hit them at different times with different messages in different channels,” he said. Visual IQ has developed a platform to help marketers “gain control of that data stack” and optimize their ad spend. A couple of years old and bootstrapped by its partners, Visual IQ is seeking venture funding to expand its sales force after landing such top shelf clients as AT&T and American Express.
Once customers have been lured into stores by advertisers using technology such as DataXu’s and Visual IQ’s, customized offers and discounts can be delivered to individual buyers based on buying profiles using technology developed by Modiv Media of Boston. Modiv built a business model around a trend called “shopper marketing,” which director of product management Matt Volpi said has advertisers “putting their campaigns in the mindset of the shopper instead of looking at the vehicle as the focus.”
Instead of using a particular channel to broadcast a generic offer to all customers, Modiv’s technology enables the retailer to mine customer purchasing history data to push a specific offer to individual customers based on their preferences.
So where is all of this going? In short, to a place where marketers can reach individual consumers with increasingly targeted messages across all channels, from websites to email to smartphones. But, cautions marketing analytics expert Cesar Brea, partner in marketing analytics firm Force Five Partners, there comes a point of diminishing returns.
“Maybe instead of integrating so many different data sources, you integrate, say, just three and execute really well in them, getting maybe 80 percent of the benefit without struggling with those many other sources and perhaps not executing as well.”
Jim Schakenbach is a freelance writer in Jefferson.
Gloomy data for VCs, but web startups thrive
Gloomy data for VCs, but web startups thrive
By Galen Moore
Two venture capital industry trackers released dour news this morning. Analyst firm CB Insights reported $5.9 billion invested over 612 deals in the second quarter of 2010, indicating the industry’s recovery appears to have hit a plateau. Meanwhile, a survey of venture capitalists published by the National Venture Capital Association (NVCA) said most U.S. VCs expect their asset class to continue shrinking.
In the U.S., VCs invested just 11.3 percent more dollars in Q2 than they did in the year-ago period. Activity was flat – with one less deal closed than in Q2 2009. VC’s “tepid” recovery may indicate a “new normal” for funding levels, around $20 billion to $25 billion. In 2007 and 2008, VCs invested closer to $30 billion a year.
Meanwhile, 90 percent of U.S. VCs expect the number of domestically active firms will shrink between now and 2015, according to the NVCA’s survey of 500 venture capital investors. VCs in China, India and Brazil are more optimistic, predicting venture will add firms in their countries during the same time frame. European and Canadian VCs also predicted contraction – although not as drastic as their U.S. counterparts.
However, VCs appear to have recovered their enthusiasm for seed investing in Internet companies. Last year, cautious VCs seeded just eight Internet startups during the second quarter, with $7.4 million in total, according to CB Insights. In this year’s second quarter, 25 Internet startups got $23.1 million.
Dow Jones VentureSource is expected to release its venture financing data on Saturday. The NVCA’s financing report is likely to emerge next week.
Wednesday, June 30, 2010
What Venalytica Has In Store For You
Tapping Apps for Personalized Retailing
Such an application has been developed by Venalytica. The mobile application enables the purchase of many different product types and from many different participating retailers. Each has a live feed of the available inventory. The patent pending Venalytica algorithm solicits importance-to-purchase characteristics from the consumer in order to point them to the best product for them.
Thursday, June 24, 2010
From MassHighTech
Wednesday, June 23, 2010
How I See It
It's time for innovation in financing innovative startups
By Andrew Updegrove, partner at Gesmer Updegrove LLP
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Acupuncture school pins down Gulf War Illness with DOD funds [June 23, 2010]
All across New England, a new wave of innovation is evident: proponents of “lean” bootstrapping are meeting to compare notes; incubators of all types are springing up while the granddaddy of them all, the Cambridge Innovation Center, expands dramatically in size.
Meanwhile, entrepreneurs are developing and rushing products onto new mobile platforms and into the cloud. It seems like innovation is everywhere.
It’s everywhere except, of course, in startup financing. Compare a venture capitalist’s term sheet from 1980 to one drafted today and you will be hard pressed to find a meaningful difference. To the extent that the VC investing model has evolved, it has done so by becoming more narrowly selective. Back in 1980 (or even 1990), many funds would look at almost anything innovative with high growth potential. But now? VCs complain about too much money chasing too few deals, but the real issue isn’t any scarcity of quality business plans. The problem is how small the eye of the needle has become that those plans must squeeze through.
Angel investors have become more selective in their interests and more rigid in their deal terms as well. Most now invest only through groups that use VC-style term sheets and criteria.
The sad reality is that while dramatically more money now flows into emerging companies, the percentage of companies eligible to access these funds has greatly decreased. All that money is clumped into much larger funds and angel groups, all seeking the home run opportunities that, coincidentally, carry the highest risk. Meanwhile, the far greater number of companies able to hit doubles and triples with much less chance of a washout goes largely unfunded.
Now, that is strange, because normally when an unserved niche appears in the marketplace, savvy observers move in to exploit it. Not so with finance, though. Investors are willing to fund the innovation of others, but the founders of the funds they entrust their money to don’t seem to be very creative at all.
This lack of vision is bad for investors and entrepreneurs alike. Over the last 25 years, the failure rate of minimally capitalized companies we have represented has been very low. But the frequency with which these same clients have achieved exits in the $10 million to $100 million range five to ten years after formation has been very high. Had financing been available, most of these companies would have taken it, and their investors would have profited quite handsomely.
Today, the opportunities for non-VC profile investing are greater than ever because costs and time of development are way down for so many types of products and services.
It’s not particularly difficult to design new investment models that fit well with market realities like these. Years ago, I designed a variety of term sheets which attracted funding in exchange for royalty rights in already developed, high-margin software products. Investors could assess factors such as competition, sales strategy and customer reaction at the time of investment rather than guessing what the marketplace might be like years in the future when the product was finally ready for launch. They also began to receive a return on their investment, and a reduction in their risk, within six months.
The moral is that there’s more than one way to structure a deal that will work for both sides of the money equation. Investors and their financing models should adapt to address current opportunities, rather than letting some of the best, and lowest risk, deals pass them by.
Andrew Updegrove is a regular contributor to Mass High Tech. He can be reached at andrew.updegrove@gesmer.com.