You know those “CAPTCHAs” you run into from time to time during your Web surfing sessions and Internet escapades? Well, a startup named Solve Media has developed a way to upgrade and monetize those pesky CAPTCHAs and, as my colleague Anthony Ha recently detailed, is beginning to see real results.
In fact, TechCrunch has learned today that Solve Media this week closed a $6 million round of series B financing, led by New Atlantic Ventures, with contributions from First Round Capital, AOL Ventures, BullPen Capital and others. The new round, which co-founder and CEO Ari Jacoby says the company will use to expand its sales and engineering teams so that it can continue developing new technology to improve anti-bot security solutions for publishers, brings the startup’s total investment to $15 million.
Yes, it raised $6 million for a CAPTCHA advertising platform. But what’s a CAPTCHA, you ask? For those unfamiliar, CAPTCHAs are those security mechanisms one finds when taking actions across the Web (signing up for accounts, making purchases, etc.) that require us to input a random set of letters and numbers so that, say, Ticket Master knows that a human being is buying tickets to the Giants’ next home game and not some bot or evil supercomputer.
Founded in 2009, Solve Media has since been on a mission to bring more value to this necessary-but-annoying real estate by allowing advertisers who run “Type-In” CAPTCHAs to use display ads, video ads or prompt users to type in a brand name or message instead of serving users with those fuzzy alphanumeric puzzles.
Naturally, the idea behind Solve Media’s CAPTCHA ad platform, then, is to give publishers an additional revenue stream from the impressions and clicks brought in by these ads and messages. And, in turn, to offer advertisers an alternative way to get their messages in front of consumers, while, running the same ads across CAPTCHA real estate and during the pre-roll before their video ads. If nothing else, the startup’s ad model is unusual. Of course, it’s also one that Jacoby claims delivers 10x higher brand recall than standard display ads.
As Anthony described last month, Solve saw over 1 billion engagements with its Type-In ads last year and expects to exceed that number in the second quarter of this year alone, potentially topping 4 billion for all of 2013. As a result, the company’s revenue projection is forecasted to move up-and-to-the-right as well, as Jacoby estimated that the company will see $13 to $16 million in total revenue this year.
The CEO also tells us that the startup is now working with over 100 major brands, like Unilever and InterContinental Hotels Group, and is currently adding “hundreds of publishers each month.” In part, he attributes Solve’s recent customer growth to the fact that its average click-through rate is now over 1 percent, while the average is a fraction of a percent.
The startup’s raise today follows the launch of its mobile platform this week, which sees it beginning to work with partners like Unilever and Songza to offer alternative ways for publishers to monetize using ads (including video) on their mobile pages.
“When it comes to mobile, we use our devices in a very purposeful manner,” Jacoby tells us. “Most mobile advertising stinks because it competes with the content you want to view and is easily — and accidentally — clicked on, which detracts from the value both for consumers and advertisers alike.”
The Solve Media CEO believes that, if consumers are going to have to grit their teeth and bear mobile advertising and security mechanisms like CAPTCHA, they should be given a system that allows them to unlock the mobile content they want to view in exchange for ad engagement. Admittedly, as a user, it seems like this model could have the potential to add friction to and further gum up the mobile viewing experience. But, at least it’s a more direct way of advertising than the sneaky, surreptitious display shenanigans that still pervade the mobile Web today.