Betabeat is pretty sick of “big data” as a buzzword, but the amount of personal information that consumers are throwing up on the web is staggering. Facebook has had some success advertising against this information, Twitter less so.
LocalResponse was born out of the ashes of Buzzd, a city guide that mashed up Foursquare and Twitter to help users find local hotspots. Founder Nihal Mehta learned a valuable lesson in defeat, and this week raised a $5 million round from new investors Cava Capital, Vodafone Ventures, Advancit Capital and Progress Ventures, along with its existing investors
Buzzd was a consumer facing platform, but failed to attract enough users. LocalResponse, by contrast, take the massive amount of public data being shared on Facebook, Twitter and Foursquare, and turns that into ad inventory.
“Our Verizon campaign has been one of the top performers,” said Mr. Mehta, who chatted with Betabeat by phone earlier this week. “When we see people tweeting out ‘AT&T suck’ or ‘Singular is killing me’ we can respond to that with a tweet from Verizon’s account offering them a $100 discount to switch carriers. That’s relevant, contextual advertising and the conversion rates have been off the charts.”
For now the only insight we have into performance comes from Mr. Mehta himself. But LocalResponse has secured 40 clients and some very big names: Verizon, Coca Cola, McDonalds, Walgreens and more. Several of these companies have run repeated campaigns on the service, a sign that they are seeing a positive return on their investment.
“The click through rates on promoted tweets are still quite low. By comparison our campaign for Walgreens saw a 60% click through rate.”
Back in August LocalResponse acquired social TV startup Philo, which added a number of engineers to their team, including their current CTO, Jessica Lowe. The new funding will be used to build our sales and marketing and to deepen the R&D the company is doing on semantic analysis.
The key to keeping their service from being spammy is only sending consumers messages that are highly relevant in terms of time, place and sentiment. LocalResponse is responding to a user’s status update, tweet or check in, which gives them a great context to target their add. And because most people have these services set up with push notifications, they don’t have to be in the specific app to get the message, they only need to own a smartphone, which often provides a great picture of their location. “SMS is a powerful and ubiquitous service,” Mr. Mehta said.
To prove their point, LocalResponse pointed to a campaign Manhattan restaurant Baohaus, which was sending out tweets to promote its business, but seeing little response. When they started running a LocalResponse campaign, they got 40,000 retweets, and 340 people saw their discount offering for every person that sent a tweet.