isocket, a direct sales platform for premium online advertising, announced this morning that it has closed an $8 million Series A financing round, led by Foundry Group. New investor (and newly-launched firm) Costanoa joined existing investors Joel Yarmon of Draper Fisher Jurvetson, Jeff Clavier of SoftTech VC, Accelerator Ventures, Quest Venture Partners, Blumberg Capital and a number of angel investors in contributing to the Series A raise. The round brings isocket’s total investment to $11 million.
As part of the round, Foundry Group Managing Director Seth Levine and former VP of Display Advertising at Yahoo James Beriker will be joining the startup’s board of directors. (Disclosure: TechCrunch uses isocket to power its direct advertising.)
So what is it about isocket that had these well-known investors and firms eager to open their wallets? According to Seth Levine, to date, a ton of time, energy and investment has been poured into taking the friction out of remnant inventory, which has resulted in a dearth of attention being paid to applying tech solutions to the premium side of the display advertising ecosystem. Furthermore, direct ad sales remains complicated and inefficient and aren’t allowing publishers and advertisers to effectively turn a profit, he said.
isocket launched in 2009 to solve this very problem, setting out with the simple goal of making it easier for advertisers and publishers to find each other and do business. In 2010, the startup went to market with its first solution, which targeted small self-serve advertisers, following that up the next year by launching BuyAds.com, an open marketplace for self-serve buyers that made isocket the first company to integrate with Google’s new DoubleClick ad server, says isocket founder and CEO John Ramey.
The motivation behind the approach, the CEO continued, was that, traditionally, premium advertising has been bought and sold by hand or through email attachments — this in spite of the fact that premium ads represent more than 75 percent of all online ad dollars. The problem has been that the vast majority of adtech built over the last decade has been to streamline the process around managing and selling remnant ad inventory, which gave rise to ad networks and exchanges, realtime bidding, etc.
Seeing a huge, unaddressed market, isocket launched what Ramey claims was an industry first — a programmatic platform for buying guaranteed display ad inventory, a process that was made easier by the fact that it had already developed this inventory through BuyAds.
isocket already had an advantage as an early mover in the space, and once it was able to scale its platform and offer programmatic direct sales via an API, customers started to take notice. Fast forward to the present, and over 1,500 publishers (which include AOL, Reuters and Gawker) and advertisers (like Salesforce, BMW and AppSumo) are currently using the startup’s platform.
Today, in conjunction with its new funding, isocket is launching its newest product, BuyAds Pro, an application dedicated to the needs of large-scale professional media buyers. For the many situations where demand-side platforms and realtime bidding are not the best way to buy online advertising,especially “guaranteed” buying, Ramey said, BuyAds Pros offers professional advertisers an extensive catalog of publishers, allowing them to buy real estate with one click.
In addition, the startup is also announcing that it has hired Mark Liao as its new CFO. Liao joins isocket from Yahoo, where he was most recently the VP of Business Operations and Operations Finance. He joined Yahoo in 2004 having been acquired as part of the management team at Overture. Liao joins a number of recent isocket hires, including Casey Saran from Admeld and Google and Lisa Backman from the Rubicon Project.
When asked why he decided to jump ship at Yahoo and join isocket, the company’s new CFO said, “The next big opportunity in online advertising is making the process of selling premium ad inventory easier for both buyers and sellers by replacing the spreadsheet with APIs and web apps. When direct ad buying and selling get easier, the tide will rise for everyone — advertisers get digital access to higher quality, guaranteed inventory, while publishers are able to properly monetize their best inventory.” As one of the early movers in the space, he said, isocket is in a great position to do just that.
The end goal? Ramey thinks that isocket can eventually become the Admeld for premium advertising. It’s a long way from a $400 million acquisition, but things seem to be moving in the right direction.
More on isocket at home here.