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The company is backed by Norwest Venture Partners
Digital advertising company SocialVibe announced Tuesday a $20 million round of equity financing led by Norwest Venture Partners, with help from previous investors Redpoint Ventures, Jafco Ventures and Pinnacle Ventures.
Digital ad companies are always looking for new ways to snag unwitting Internet users, whether it's through display ads, video ads, or those annoying in-text rollover ads. The more I read about the online advertising industry, the more it seems like a guerilla-style battle between advertisers and consumers, where the advertisers are like the Vietcong leaving elaborate ad traps of pits lined with spikes for unaware consumers to trip into and get skewered. The result: Consumers hate ads and most online advertising campaigns see an average click-through-rate of about 0.1%.
SocialVibe is leaving behind the guerilla warfare and taking a different, more direct approach to digital advertising by giving consumers the opportunity to opt-in. For example, earlier this year, SocialVibe teamed up with Kia Motors to raise awareness for Kia's new Optima mid-sized sedan. To this end, SocialVibe created an ad campaign in which it presented over 100 million gamers across Zynga's social game network with the opportunity to earn free Zynga virtual currency in exchange for interacting with Kia's ad. The campaign was a resounding success, with consumers spending an average of three minutes interacting with the ad, and 14% sharing the ad with others.
SocialVibe claims that similar results can be seen across its portfolio of ad campaigns. Consumers who engage with SocialVibe ads spend an average of 63 seconds engaging with the ad, with an 80% completion rate, with 41% visiting the brand's fan page or website, and another 15% sharing the ad with friends.
“With consumers now in control of the conversation, brands are hungry for technologies that enable them to target an audience at scale, create an emotional connection and drive purchase intent,” said Jeff Crowe, general partner of Norwest Venture Partners, in a statement. “SocialVibe is changing the nature of the brand advertising model, and the company’s early success with hundreds of leading brands simply reinforces that the time is right for a shift of brand dollars to social media.”
In addition to Kia Motors, SocialVibe has created ad campaigns for other major brands, including GE, Best Buy, Disney, Nestle, McDonalds, Coke, American Express, AT&T and Toyota. Interestingly, though, the company didn't start out as a B2B service. Originally, it operated as a service where users could raise money for their favorite charities by engaging with branded content and sharing it with friends. The company noted that the successful model of rewarding consumers for engaging with branded content could be applied on a broader level to help brands generate interest in their products online. The company's current consumer-facing website will be renamed SocialVibe Gives while its B2B ad solution will be called SocialVibe Engagement Ads.
Image source: SocialVibe.com
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