Navigating the web these days is increasingly a case of what you see is what you get. Sites like Pinterest and Tumblr, and apps like Instagram, Vine, and Snapchat are replacing text updates with images and video as the primary mode of communication — and marketers and investors are taking notice.
“About two years ago, the visual expression of people’s desires, intent, and musings started to become really prevalent,” says serial entrepreneur and investor John Batelle. “It’s a demonstrable, secular shift to expressing ourselves in images [and] there’s a media shift, which is part of the success of that.”
This migration of consumers to a more visual vocabulary for expressing themselves online presents a problem for marketers who have never really managed social media well, Batelle says. It’s also part of a loss of control over how brands are presented (or re-presented) in the Internet age.
Marketing, Batelle says is more of a conversation between a consumer and the company whose product they consume. “The whole native advertising thing and the rise of social are two big secular trends in the larger [marketing] narrative, which is part of this shift to being in conversation with an audience,” he says.
Traditional advertising in the television era was a many-to-one conversation, dictated by the companies who were shilling their wares to an audience they rarely saw or heard. The Internet has given consumers an ability to interact with brands in unprecedented ways, and now companies are scrambling to figure out who’s using their brands, when, where and how.
Enter venture capital. A slew of new startup companies, including Ditto Labs, Chute (which are both backed by Batelle), Piqora, and Scoopr Media, have raised or are seeking capital from venture investors to sell tools to consumer goods companies to help them understand the ways their brands are being used, abused, and refused by the teeming Internet masses.
Specific investments in brand-related advertising and marketing by venture capital firms hit a peak in 2013, according to CrunchBase data. Investors backed 23 startups focused on brand advertising in the first quarter of the year — the most in a five-year period — and two quarters later poured the most money into the category, with 17 companies raising over $180 million.
“Photos will become another form of social listening,” says David Rose, a serial entrepreneur who founded Ditto Labs and is currently also working as a visiting scientist at the MIT Media Lab. “Before digital you really only had one choice of getting a message out there, which was broad-based analog marketing. The big drum beat in digital advertising has been more and more targeting… the view that photos provide people’s interests and activities, and actual consumption habits, really threaten advertising and make advertising look more like customer relationship management.”
Because it’s such a nascent market, no clear winner has emerged with substantial capital to take the industry by storm, according to our data. However, more entrants are trying to build war chests every month.
Just today, OfferPop, a social networking-focused marketing service, raised $17 million in a new round of funding. “What we’re building is a platform for business to consumer brands,” says Wendell Lansford, the company’s chief executive. “Email as a channel built several multiple-billion-dollar public companies. What’s happening now with mobile and social and the convergence of those two is creating an environment that’s far more dynamic to marketing than email ever was.”
Companies like Offerpop, which raised its cash from Edison Ventures, Hearst Ventures and Salesforce.com, show the link between advertising and customer relationship management (I mean… Salesforce.com is investing).
“[Marketers] are all about capturing the conversations and communications that voices are having around brands in visual media,” says Lansford. “That’s a product we’ve been working on. It’s around building an understanding of individuals as they relate to your brand and having a central system of records around those brands.”
Photo courtesy of Flickr user Rupert Ganzer.