Venture Capital News: Knotch Secures $10M
2016-09-27
The web measurement startup Knotch has raised $10 million in Series A funding as the company aims to help more marketers better gauge the effectiveness of digital advertising.
According to Wall Street Journal, the funding comes at an opportune time, as companies increasingly wrestle with rising doubts about how well their marketing money is being spent online.
Launched in 2013, Knotch helps advertisers track the impact of digital ad campaigns. It places interactive graphical boxes at the end of articles that ask people single questions that can be answered with the click of a mouse.
For example, after a branded article about India's natural gas industry on Quartz, a reader might encounter a banner-like image featuring a city backdrop, and a headline asking a question such as 'Do you agree GE technologies will make our future better?' That reader can quickly mouse over several potential answers, such as 'strongly agree.'
The brands can then view data from multiple surveys and campaigns via a custom Knotch web interface.
The lead investors in this round were the entrepreneurs Michael & Xochi Birch, who are perhaps best known for founding the social network Bebo and selling it to AOL for $850 million before eventually buying it back. Other investors include Beth Comstock, vice chair at GE, and veteran digital media executive Jon Miller.
The company's co-founder and Chief Executive, Anda Gansca, says that Knotch's product was initially designed to be a more engaging alternative to various digital survey products employed by web publishers and advertisers to track whether ad campaigns improve brands' perceptions or move people to buy products. Often these surveys employ pop-up windows where people are asked a series of questions about current ad campaigns.
'Right now, we have a broken survey model,' she said. 'For most surveys only 1% of people answer, they are focused only on consumer sentiment and they are not telling you anything relevant.'
Ms. Gansca says that Knotch's measurement efforts for brands sometimes results in response rates as high as 25%. Why? Knotch's products don't ask much of web surfers. People can easily hover over a short question or poll. In some cases, when they click on an answer, the product produces an instant chart featuring real-time data, letting people see whether other respondents share their opinion.
The ease of use and visual experience goes a long way, said Ms. Comstock. 'Knotch has put a lot of development into the user experience required to keep users engaged,' she said. 'Until Knotch, that hasn't been the case, and I think people underestimate how important it is and how hard it is to get right.'
Initially, Knotch's tools were focused on branded content, a growing area of marketing investment--even though many advertisers still aren't always sure how well it works. Ms. Gansca says Knotch plans to expand to other types of digital advertising and build technology that will make it easier for marketers to link data collected by Knotch to other analytics systems and database they use. Ideally, this will help marketers adjust the allocation of their ad campaign budgets in real time using this cross section of data, Ms. Gansca said.
'The plan is that our tools will help us say to brands, 'here's how you should better spend media budget',' she added.
That should be welcome in the current climate, particularly as marketers wrestle with a nagging set of doubts about how well their money is being spent in digital media. The fact that Knotch works directly with marketers and isn't being pushed by media sellers (which is often the case with typical online ad surveys) should give the company a leg up, argued Mr. Miller, one of the company's investors.
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