Eric Schmidt and Jim Pallotta Invest in Display Ad Startup Spongcell

eric schmidt Eric Schmidt and Jim Pallotta Invest in Display Ad Startup SpongcellGoogle recently usurped the display advertising crown, taking the title from the long time leader, Yahoo.

Now the most widely recognized face at Google, Eric Schmidt, has invested in New York startup Spongecell, which transforms display advertising into rich media.

The funding round is reportedly just under $1 million dollars, with investment from Schmidt and Jim Pallotta, hedge fund manager and co-owner of the Boston Celtics.

Raptor is expanding their footprint in New York, which is currently centered in a spectacular office above the Apple store on 14th street. Watch for their name to appear increasingly alongside Silicon Alley deals.

Spongcell is the brainchild of several CS grads from Carnegie Melon. The rebound in display advertising in the wake of the financial crisis has been a relief to a lot of online publishers. But engagement is increasingly becoming the metric that advertisers look to in place of raw page views or clicks.

In the mobile space, especially on tablets, advertisers are trending towards rich media. Local firms like Medialets have had great success building rich media for publishers like the New York Times, News Corp. and Hearst. By putting interactive ads that include video, social media and maps into the same space typically occupied by display ads, Spongecell claims to produce four times the average engagement rate.

Spongecell promises to deliver a rich media experience without the need for a custom ad unit and in as a little as 48 hours. These ads can be served across the major networks like Doubleclick. Upgrading traditionally static display units has appeal to big brands. Spongecell’s clients include Armani, Audi, Burger King and Dell.

How could Spongecell go wrong with this guy as their creative director?

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