AdYapper, an ad technology startup that promises to help marketers keep better track of where their ads are running online–and ultimately save them money–has raised $4.5 million in new funding.
The Chicago-based firm,launched in 2013 via the startup accelerator program Techstars, pulled in the Series A funding from KGC Capital and a handful of other investors. The firm had previously raised $1 million from angel investors.
While the digital ad business is not lacking in companies claiming they can help protect advertisers from buying bogus ads, or to make sure their ads are viewable on all digital screens, the team behind AdYapper says its set of software, Web crawling tools and digital interface can do both, and better than anybody else.
The founders are looking to portray themselves as outsiders ready to point out the many flaws in the digital ad industry, where they say brands waste millions of dollars on ads that can’t be seen, are targeted to bots instead of real people, or are simply ineffective.
“We came at this with an outsider perspective on the ad industry, and looked at it through a completely different lens–a logical one,” said AdYapper Chief Executive Elliot Hirsch, a veteran Web designer. That’s simply something this industry isn’t used to. Our technology is designed to identify and remove non-working media from brands’ budgets.”
Don’t digital advertisers always try to do that, by looking at how their online ad campaigns are performing, and making changes along the way? Mr. Hirsch says that most advertisers and their agencies comfort themselves by using a mix of data, reporting, and partnerships with third party vendors promising to protect them against waste. Yet they still run lots of wasteful ads, he says.
That’s because, in his view, the prevailing culture among ad agencies and their clients is to buy as many ads as possible at the lowest prices possible. As a result, he says many advertisers end up purchasing cheap, low-value ad space wasting as much as 60% to 70% of their digital ad budgets.
“The whole ecosystem rewards volume not value, and that leads to ad placements that have absolutely no business value,” he said.
Such brash talk may not win Mr. Elliot many friends on Madison Avenue. But he thinks chief marketing officers at major brands are ready to hear what he has to say, given all the talk in the industry over ad fraud, alleged kickbacks, viewability and fears over a lack of ad buying transparency at top agencies.
AdYapper has a fan in Chad Kartchner, who recently implemented the startup’s tech while working at Nissan’s Marketing Innovation Lab. Mr. Kartchner recalls AdYapper discovering that Nissan’s ads were ending up on websites with questionable content, despite some protections that had been put in place.
“From a technology standpoint, their product is really amazing, ” he said. “But navigating the politics [between agencies, marketers and media companies] will be challenging. It could be very disruptive.”