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Moat Grabs $50M

NEW YORK, NY, Moat, a web media analytics company, announced a $50 million Series C round led by Insight Venture Partners.
According to Wall Street Journal, Moat has raised $50 million in new funding as it looks to take on an ambitious goal. It plans to challenge Google, Nielsen, comScore and other digital media companies by developing a standard metric that would serve as the currency for buying and selling digital ads.

Founded in 2010, Moat is perhaps best known for being one of the leading companies that track viewability -- determining whether online ads can be seen by real people. But the 125-person company, which had previously raised over $17 million, aspires to do much more. According to co-founder and Chief Executive Jonah Goodhart, Moat is working on a new measurement designed to help Web advertisers and publishers gauge whether people pay attention to digital ads and are impacted by them.

The investment round was led by Insight Venture Partners.

The ultimate goal for Moat will be to have advertisers negotiate ad deals using this new metric, rather than relying on the long-standing practice of billing advertisers based on how many ads are delivered to a Web page by 'ad serving' software.

Typically, ad serving data comes from Google -- the leading ad serving provider in the industry. That data is often used by media companies to track how many ads they deliver and to bill advertisers. In addition, advertisers often use tools from comScore and Nielsen to enhance ad serving data, such as tracking the demographic makeup of the audience that is exposed to an ad campaign.

But as more digital advertising moves away from standard banners on Web pages toward video and native ads on platforms like YouTube, Snapchat and Facebook, Moat sees an opportunity to displace Google and other metrics providers.

Mr. Goodhart said Moat is already well positioned to do this, since it has its own viewability tracking mechanisms plugged into Facebook, YouTube and Twitter. Plus, a major advertiser, Unilever, is already transacting ad deals using Moat data.

'Our ambition is to build the currency for digital advertising,' he said, while emphasizing that Moat sees companies like Nielsen and Google as potential partners in this effort.

Moat has successfully pivoted before. The company first launched with the idea of building a crowdsourcing tool for online ad creative, which never took off. Over time, the Moat team built a search engine for online ads, then started selling access to advanced analytics to marketers.

In the past few years, as the online ad industry rushed to start only buying ads that are viewable, Moat was in the right place at the right time and moved aggressively to build out viewability tracking tools for both desktops and mobile Web pages.

While he declined to discuss specific figures, Mr. Goodhart said that Moat has been profitable for the past two years and that revenue tripled from 2014 to 2015.

'The first thing I wrote down when we started this company five years ago was, we need to make brand advertising more effective online,' said Mr. Goodhart. He and his Moat partners Noah Goodhart and Michael Walrath had previously partnered to create Right Media, an early digital ad exchange that was heavily used by direct-response advertisers. It was sold to Yahoo in 2007.

With Moat, the plan was to cater more to the kinds of marketers who spent heavily on TV, like car, beer and toothpaste brands. 'Most stuff is bought offline,' he said. 'We're trying to connect those dots. If you look at TV, it has a currency [with Nielsen data]. It may be flawed, but the point is, everyone is on the same page.'

Surely, most every digital media company would like to see more TV ad budgets come their way. But getting everyone on the same page for a brand new currency won't be easy. Just getting viewability standards set across the industry has been challenging.

Peter Naylor, head of sales for Hulu, said he started working with Moat a few years ago when brands started pushing the viewability concept. That move led to more ad budgets coming Hulu's way, he said.

So he's impressed with Moat's technology and approach. 'They are really in touch with the needs of both sides of the business,' he said. 'There is an opening there. But [ad] server counting is pretty foundationally sound in the industry.'

Megan Pagliuca, global chief executive at Accuen, an agency that specializes in data-driven ad buying, said she's generally on board with Moat's philosophy. 'I do think the industry needs to evolve beyond the metrics we have today,' she said. 'Ad serving data is clearly not enough.'

But Ms. Pagliuca said it may be hard for any one company to solve all of the digital ad world's needs. For example, besides tracking whether ads are viewable or command attention, advertisers are looking for help in tracking people across different devices and different media vehicles, she said.

For now, Moat is focused on building out its technology aimed at developing this potential new ad currency, as well as hiring. The plan is to double staff this year, Mr. Goodhart said. 'We think we are at an interesting crossroads in the industry,' he said. 'Where Marketers are saying, 'if I can't measure it, I can't buy it.''
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