All you search-engine marketing consultants watch out. Sequoia Capital just invested in Kenshoo, an Israeli startup that automates the whole process of creating and managing search-engine marketing campaigns. It is a labor-intensive activity that has given rise to an entire cottage industry. Kenshoo competes with bid-management software from all the giants in online advertising (DoubleClick, aQuantive’s Atlas Solutions, and Omniture), but it goes a step beyond that to look at the quality of the campagns. It finds relevant keywords across search engines, and changes the campaigns to maximize their returns. The company’s press release quotes Sequoia partner Michael Moritz (who invested in Google):
Mastery of search engine marketing is the biggest single challenge facing any marketer or advertiser. Sequoia Capital invested in Kenshoo because of its fresh approach to this task and because the company’s battle-hardened software has already paid off in thousands of different search campaigns.
Although Moritz sat on the evaluating committee, he is not the investing partner. Yuval Baharav, a partner in Sequoia’s Israeli office, is the one who invested and will take a board seat. This is Kenshoo’s first venture round. Terms were not disclosed, although one report in an Israeli paper puts it at a few million dollars. Previously, the startup raised about one million dollars from angel investors, and has been funding itself from operations. The new money will be used to make a marketing push into the UK and parts of Europe in the first quarter of 2008, and the U.S. in the second quarter.