tellapart
Mark Ayzenshtat
josh mcfarland
greylock
Bain Capital

Former Googlers Raise $13 Million From Bain And Greylock For Personalized Ad Solution

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TellApart, a startup that enables eCommerce companies to use customer data to offer more personalized display advertising to both their loyal and potential customers alike, today announced that it has closed a $13 million series B round of funding. The round was led by Bain Capital Ventures, with contributions from Greylock and others.

As a part of the new round, Bain Capital Managing Director Ajay Agarwal will be joining TellApart’s board of directors. The new capital infusion adds to the $4.75 million the startup raised in April of last year, bringing total investment to $17.75 million.

For every 100 customers that visit a company’s website, only a few will buy something. The key for digital advertisers in today’s Web-osphere is to figure out which of those 98-odd people might buy something in the future if they’re served the right kind of targeted ad. The idea is to hit those potential customers with personalized ads as they navigate their favorite websites — a process fondly known as “retargeting”. TellApart, which was founded by former Google ad execs Josh McFarland and Mark Ayzenshtat, specializes in this very process.

Retail brands and eCommerce share deep user data with TellApart, which then curates this data and uses it to power more personalized marketing, including retargeting potential customers as they’re out clicking their way through cat videos and Etsy offerings. On average, the company says, it has been able to offer an average of three to five percent lift to its clients overall revenue.

This lift primarily comes from using TellApart’s dynamic display ad remarketing solution called “Transactional Retargeting”, the primary app that sits on top of the TellApart Customer Data Platform. The Customer Data Platform is used to compute a proprietary Customer Quality Score (otherwise known as “CQScore”) for each individual shopper, based on the data collected from previous customer behavior. This is then used to decide which customers have the most potential value to the business, and to serve them product-specific display ads.

TellApart also uses realtime, auction-based bidding for each ad impression, allowing the startup to differentiate between the values of each unique impression on every unique user. This enables TellApart to be more calculated in its ad buying and targeting.

The startup prides itself on being able to “tell apart” the best prospective customers from the rest of the bunch, hence its name, and presumably why it claims to be offering an average 7.5 percent user click-through rate, which is significantly higher than the industry standard.

Co-founder of TellApart, Josh McFarland, spent five years at Google (pre and post Google IPO) as a business product manager, working on many of Google’s advertising platforms, like AdWords and Audio Ads, etc. McFarland was also a part of integrating Doubleclick, the digital marketing services and technology company that Google bought in 2008. Doubleclick, it also happens, was funded by Bain Capital and Greylock. As Bain Capital Managing Director joins Greylock Partner James Slavet on TellApart’s board, this is a team that is very familiar with each other and has been around and part of successful ad businesses (and exits).

“We fundamentally believe that customer data is the single most effective sales and marketing driver for retailers”, McFarland said. “While at Google, we recognized the enormous opportunity this data has for e-commerce growth, but it’s one that most companies are unable to handle on their own and the data is too precious an asset to hand over to Google. TellApart exists to address this need by helping online commerce companies leverage customer data to dramatically increase sales.”

As to TellApart’s monetization model, the startup is attempting to offer retailers and eCommerce companies a low-risk, high-return solution by opting for a pay-for-performance model. A share of revenue is paid to TellApart only if and when a prospect coverts a customer by clicking on an ad and making a purchase. The startup counts Hay Needle, Ebags, Diapers.com, cafepress, and drugstore.com among its early clients.

For more on TellApart, check out TechCrunch’s own Mike Arrington interviewing the startup’s cofounders here.